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  5. How Cable News Reshaped Local Government

How Cable News Reshaped Local Government

Abstract

This paper shows that partisan cable news broadcasts have a causal effect on the size and composition of budgets in U.S. localities. Using exogenous channel positioning as an instrument for viewership, we show that exposure to the conservative Fox News Channel reduces both revenues and expenditures. Multiple mechanisms drive these results: Fox News improves election chances for local Republicans, alters politician campaign agendas, and directly shifts voter policy preferences on fiscal issues. Consistent with the priorities of small-government conservatism, we find evidence that the reduction in public services is compensated by increased private provision, in particular through higher student attendance at private schools. The "Fox News Effect" is not just limited to vote shares; it also moves policy to the right.

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