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The Health Minister (and Newshub) Miss the Point on the Problem at the Heart of Media Influence

Newshub report, "The Health Minister [Ayesha Verrall] is in another political neutrality mess after Te Whatu Ora paid for a puff profile of her in a southern newsletter". [That is, an article about how great she is]. Verrall called the piece an "inappropriate use of public funding" & "ordered the advert of her taken down after questioning from National".


She misses the point, as does Newshub when it states, "The cost of the profile didn't incur an extra cost".


So what is the point? In an important article, my old economics co-author Rafael Di Tella at Harvard Business School discovered how government advertising in the media causes those same outlets to refrain from exposing bad things about politicians.


As we reported in a previous blog, his paper, "Government Advertising and Media Coverage of Corruption Scandals", quotes from a non-government organization which wrote a report on the issue, saying: "We found an entrenched culture of pervasive abuse by provincial government officials who manipulate distribution of advertising for political and personal purposes … The effects of such abuses are especially insidious when public sector advertising is critical to the financial survival of media outlets".


What has been exposed in the present case is that the monthly costs of just Te Whatu Ora's publications in a few outlets we now know about (Otago Daily Times, Star Dunedin, Clutha Leader, Southland Express, Oamaru Mail, Wanaka Sun) is $14,000. Those outlets know that if they criticize that agency, the advertisements may be pulled. The issue of "puff profiles" is a red herring. The economics evidence supports the idea of a dark threat underlying such ads: don't attack me, or else you will go hungry. Hence the link to media bias.


I tried finding out the extent of such public advertising, with help from the Taxpayers Union, but gave up. Why? Since it is so vast, spans so many government departments, agencies & God knows what else, and the information is so hidden, it would require thousands of Official Information Requests. We will never know how much bias it has created.


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