Mendoza School of Business

Here’s another reason to keep local journalism alive — it helps keep local government spending down

Published: May 31, 2018 / Author: Los Angeles Times

A Los Angeles Times editorial writer wrote about a working paper “Financing dies in darkness? The impact of newspaper closures on public finance” coauthored by finance professor Paul Gao, the Viola D. Hank Associate Professor of Finance at Notre Dame’s Mendoza College of Business. 

A new working paper by three Midwestern economists finds a correlation between the closure of local newspapers and increased long-term borrowing costs for local governments.

The authors, Paul Gao at the University of Notre Dame and Chang Lee and Dermot Murphy at the University of Illinois at Chicago, speculate that government spending increases when there are no journalists, or radically fewer of them, peering over local officials’ shoulders.

Read the full opinion piece here.