How Accountability Shapes National Borrowing Rates | The Professor Is In
Summary
Justin Wolfers and Augusta discuss the economic value of a free press, using the "boss-employee" analogy to explain how media accountability prevents political corruption and protects market stability. They explore how natural experiments, such as radio tower placement, provide causal evidence that press freedom leads to better governance and lower borrowing costs. The segment also covers the history of the natural experiments revolution in economics and the financial incentives for businesses to support independent journalism.
Topics discussed
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Intro: White House press badge removal and court order
Economics of free press: Public choice theory and self-interest
The principal-agent problem: Voters as bosses of politicians
Media's role in accountability: Corruption, golf, and narrow interests
Market impacts: Credit ratings, bond yields, and local newspaper closures
Business incentives: Crony capitalism vs. free press as a public good
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Methodology: Randomized control trials and correlation vs. causation
Natural experiments: Radio towers, hills, and governance
Validity: Internal vs. external validity in economic research
History: The natural experiments revolution and Nobel laureates
Fun facts: The golden pig and YouTube subscriber plaque
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Sponsor: NerdWallet Smart Money Podcast
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