Even as the media struggle financially and their credibility continues to falter—especially during this last election—investigative reporting, surprisingly, is booming. Legacy outlets like The New York Times still publish in-depth series on major topics like brutality in the Rikers Island jail, labor conditions in the city’s nail salons, and fraud at Trump University. Around the world, niche start-ups like Daily Maverick and El Faro and InsideClimate News cover subjects that are frequently ignored or underreported by the larger media outlets.
The problem, however, is that despite all the investigative journalism being done these days, there isn’t a clear source of revenue to support it. Investigative journalism requires dedicated and experienced reporters and editors who have time and plenty of resources. Above all, it costs a lot of money—and yet it’s hard to fund. Advertisers often don’t want to be associated with it, and declining subscription numbers no longer help to cover costs. In some instances, private foundations and wealthy individuals have stepped into the breach, and organizations like the International Consortium of Investigative Journalists have been formed. These donor-backed groups have helped journalists do the slow, steady work of reporting, leading to several blockbuster series on tax avoidance, including the so-called Panama Papers, Swiss Leaks, and Luxembourg Leaks. Other examples include nonprofit organizations like the Marshall Project and ProPublica, which shared a Pulitzer Prize in 2016 for their investigative feature “An Unbelievable Story of Rape,” and which are also funded by individual donations and foundation support.
But while donor funding helps pay for investigative journalism now, it’s far less certain that this model can sustain it in the future. There will no doubt be funding for the kind of reporting that went into exposing the Panama Papers or that the Times and The Washington Post do, but what about local investigative reporting? Who will cover a story of municipal corruption, or mismanagement by a small-town school district, or lead in the water supply? Without more funding, the current decline in local investigative reporting is unlikely to slow.
Democracy’s Detectives, a compelling new book by Stanford University communications professor and economist James T. Hamilton, helps to clarify the social uses of—and the acute economic threat to— investigative journalism in the United States today. Indeed, Democracy’s Detectives joins the ranks of two other iconic books on the subject: The Evolution of American Investigative Journalism, a history by James L. Aucoin, and The Journalism of Outrage, written by a group of journalists (David Protess, Fay Lomax Cook, Jack C. Doppelt, James S. Ettema, Margaret T. Gordon, Donna R. Leff, and Peter Miller) who used case studies to examine how investigative reporting around the country helped set various policy agendas. Democracy’s Detectives revisits many of the questions raised by these earlier books, both historical and contemporary. But Hamilton also turns to data analysis to explore the economics behind investigative journalism.
* * *
Democracy’s Detectives gives us the long view: Hamilton introduces the book with the celebrated tale of how journalists in 1858 uncovered the distribution of “swill milk”—a disgusting concoction of milk from cows fed with by-products from distilleries, and that also included starch, molasses, and plaster of Paris—to children in New York City, which caused many of them to get sick and die. Enterprising reporters working for Frank Leslie’s Illustrated Newspaper tracked the horses delivering the swill milk; their reporting generated public outrage and inspired the passage of a state law intended to fix the problem. From this low-tech beginning, Hamilton launches into his analysis of investigative journalism over the last 150 years, concluding his book with a chapter on how computing and data analysis will be of enormous help to the field in the future.
Between these bookends, Hamilton also discusses how investigative journalism addresses a standard puzzle in modern information economics known as the principal-agent problem: the idea that information is costly, and most people don’t have enough of it to make informed decisions. For example, we’d all like to know which of our public servants have a pattern of engaging in self-serving actions, including corruption, and which do not. Investigative journalism, Hamilton argues, helps provide an answer to this problem, creating a more balanced distribution of information.
Hamilton recognizes that editorial decisions about coverage are affected by resource constraints. There just isn’t enough money to pay for all of the investigative journalism needed, so editors must make decisions about what to cover. These decisions can be determined by the urgent needs of a particular community or by the exigencies of the moment. Hamilton provides some frightening numbers that show how tight the resources are in many newsrooms these days. Between 2007 and 2014, the number of full-time journalists working at daily newspapers dropped by 40 percent. Nor have national papers avoided such straits: The New York Times has suffered multiple rounds of editorial layoffs and buyouts in recent years, and The Wall Street Journal went through its own round of buyouts in 2016. All of these changes portend serious trouble for the future of investigative reporting in the United States.
The fact that journalists play a crucial role in helping to draw attention to social problems is well-known. What makes Democracy’s Detectives unique is Hamilton’s use of data analysis to back up some of his main points. Cutting through the speculation and fear that accompany conversations emanating from what investigative journalist Dean Starkman calls “the future-of-news” crowd, Hamilton reminds us early on of a key point made in The Journalism of Outrage, which is that the impact of news reporting can unfold over time and in three stages: First, it can influence individuals; second, it can broaden our discussions and create more public deliberation on a particular subject; and third, it can lead to substantive policy change. While Hamilton recognizes that the first two are important, his book is primarily concerned with the final stage: He wants to understand how reporting leads to policies that address, and sometimes resolve, social problems.
* * *
Hamilton makes his argument using data mined from more than 12,000 journalism prizes awarded by the group Investigative Reporters and Editors (IRE) from 1979 to 2010. These data allow him to map the current state of investigative journalism and present a clear taxonomy of who is doing what—and, just as important for Hamilton, where they’re doing it. For example, local newspapers tend to cover local subjects like public education, community development, and housing; larger newspapers focus on bigger issues like national-defense spending, banking and finance, and international affairs. It’s no surprise, then, that the location, size, and reputation of a reporter’s institution can have a profound influence on the efficacy of a particular piece of investigative journalism. But the fact that high-circulation national newspapers often have the greatest influence on public policy means that equally important areas of policy-making on a more local scale often get neglected. “Variations in economic fortunes across outlet types and size mean that where reporting jobs disappear can affect which stories become more likely to go untold,” Hamilton notes. “The geography of undone investigations matters because this affects which types of institutions are held accountable and what types of issues generate public scrutiny.”
Hamilton also uses the IRE data to examine why some stories produce social or policy changes and others don’t, and offers a cost-benefit analysis to show how some of the investigative reporting he surveys has resulted in important cost savings to the public. In most cases, however, he finds that the after-effects of an investigative report were “deliberative” rather than “substantive”: that is, it more likely changed the public discourse or provoked some institutional turnover rather than producing policy change. Nearly 15 percent of the stories that won an IRE prize triggered an investigation. Individual effects included resignations (6 percent), indictments (4 percent), and firings (3 percent). In his “substantive effects” category, slightly more than 1 percent of the stories led to the passage of new laws.
Hamilton notes that one indication of journalism’s influence is the testimony of reporters at congressional hearings, and he points to a troubling decline there. According to his research, between 1946 and 2010, 613 hearings featured a “journalist, reporter, or correspondent” as a witness. Of these hearings, 17.8 percent took place in the 1950s and 28.8 percent in the 1970s, the high point for media witnesses. Today, however, congressional hearings rarely feature testimony by reporters: Only 4 percent of the hearings between 2000 and 2009 featured journalists as witnesses. “The media,” Hamilton concludes, “are a declining source of newly created information about public affairs, in part because of declining finances.”
* * *
The implications for the future are dire. If we frame Hamilton’s ideas in the economic terms he likes to use, our worst fears are confirmed: Much of the investigative reporting being done in the United States depends on prior investment in a capital stock that is being run down and not replaced. This capital stock is the cumulative knowledge of a generation of older journalists who were trained—typically on the job through detailed beat reporting and subject to critical editorial oversight—during the heyday of print journalism and are responsible for much of the investigative reporting being done now. It’s not clear who will take up the mantle as this generation is forced out of journalism or retires.
Parallel to the graying of investigative reporting is the shrinking number of local newspapers practicing it. The New York Times, the Associated Press, the Center for Public Integrity, and others continue to investigate stories using the Freedom of Information Act. But the number of FOIA requests by local newspapers has dropped, as Hamilton reports, by nearly 50 percent between 2005 and 2010. For him, this is yet another worrisome sign of the field’s decline.
Hamilton believes that the loss of investigative journalism is a terrible prospect for society, since these reporters perform an essential role by identifying and documenting societal problems and helping to galvanize the forces to address them. He concludes his book with a cost-benefit analysis that shows how investigative journalism not only serves the public interest but saves taxpayers money. Such exposés can cost a newspaper hundreds of thousands of dollars to report and write—but when the system is changed and the perpetrators punished, the amount saved by taxpayers can number in the millions.
Hamilton isn’t the only person making these kinds of arguments in support of investigative journalism. Paul Radu, a Romanian journalist and executive director of the cross-border Organized Crime and Corruption Reporting Project, frequently points to the billions of dollars recovered by governments after investigative journalists reported on criminal activity and fraud. Radu’s OCCRP colleague Drew Sullivan and David E. Kaplan, executive director of the Global Investigative Journalism Network, have also argued that a share of this recovered money should be put in a trust to fund more of such reporting.
But while creative arrangements like this are certainly needed to help save investigative journalism, assessing its financial benefits to society isn’t the only way to measure its social and political importance. Good investigative journalism raises awareness; it generates outrage and forces regulators and officials to take action; and it ultimately changes social norms. In other words, investigative reporting, like many other forms of journalism, helps transform parts of society—cultural, political, legal—that are outside the scope of a cost-benefit analysis.
In the end, Hamilton’s book presents a thoughtful and detailed case for the indispensability of investigative journalism—and just at the time when we needed it. Now more than ever, reporters can play an essential role as society’s watchdogs, working to expose the corruption, greed, and injustice of the years to come. For this reason, Democracy’s Detectives should be taken as both a call to arms and a bracing reminder, for readers and journalists alike, of the importance of the profession.