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How closures of local newspapers increase local government borrowing costs
Local newspaper closures increase local government borrowing costs, according to a paper to be presented at the 2018 Municipal Finance Conference at Brookings. The paper, “Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance,” also finds that local newspapers are especially important in states with low quality governance, and that online media are not acting as sufficient substitutes for local papers. Pengjie Gao of the University of Notre Dame and Chang Lee and Dermot Murphy of the University of Illinois at Chicago are among the first to examine the effect of reduced local news coverage on local government finance. From 2003 to 2014, the circulation of local newspapers decreased by 27 percent, and statehouse reporters decreased by 35 percent.
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