Friday, 17 April 2015

Surely this can not be right

In an article "Helping journalism can harm it" in The New Zealand Initiative's Insights Newsletter (Insights 13: 17 April 2015) Jason Krupp writes,
Regardless, they may have a point. Journalism has public good aspects to it – the threat that an investigative journalist uncovers a rort or corruption helps to discipline politicians, which provides benefits even to those who do not help to pay for it by watching or reading. Many people might free-ride rather than contribute.
This can not be right. What Krupp is describing isn't a public good but a good with neighbourhood effects. That is, there are positive (in this case) externalities to journalism but this is not enough to make journalism a public good.

If journalism really is a public good then how is it that newspapers, for example, can generate income by selling their papers or putting material behind paywalls. Paywalls and selling papers mean that journalism is excludable. These things wouldn't generate income otherwise. The important point here is that the journalism and the newspaper/website are bundled, you need both to get a useful product and you can exclude by using the newspaper/website.

1 comment:

Eric Crampton said...

I'm likely to credit or blame for that particular part. I'll walk it through more slowly.

1. Goods that are nonrivalrous in consumption may still be underconsumed relative to an unattainable blackboard optimum even if they are excludable.
2. The good in question here, the improved performance of the polity when there's better vigilance against rorts, corruption and the like, is non-rivalrous and is also non-excludable.
3. Journalism is one way of producing that vigilance.
4. Viewers of Campbell Live believe that his show is one of the more important sources of that watchdog role; others note that there are still many alternatives, and that the merits of this particular show are more debatable.
5. Where the high demanders for the programme each only count as one viewer under the current funding model that ties advertising to the provision of the non-rivalrous but potentially excludable tv programming, and where the high demanders aren't sufficiently valuable to advertisers relative to the viewership that might watch alternatives, the programme will fail absent alternative funding.
6. High demanders can and should use mechanisms like PledgeMe to fund the programme directly.