Investigative reporting in the old days seemed like it was a loss-leader in the information bundle to which we subscribed. As a kid, I read the newspaper for the funnies, movie times, the sports scores, and for the classified ads. I still value this info, but I never get it from the printed page. Even a few years ago, I can remember feeding money into New Haven Register newspaper dispensers to learn the local movie times. But with an Internet-enabled cell phone, I almost never buy the Register anymore.

The bottom line is that we may need to publicly subsidize investigative reporting if we’re going to get enough of it. But the problem with subsidies lies in this question: who is going to decide what kinds of issues get investigated? It’s scary to think of having politicians decide the targets of journalism.

Bruce Ackerman and I have a solution (just published in the Guardian):

We urge democracies throughout the world to consider the creation of national endowments for journalism that are carefully designed to confront the impending collapse of investigative reporting.

The real concern is not the newspaper, but news coverage. It’s not clear that print news is a viable technology. Classified ads are more efficiently delivered by websites. Nobody under 50 waits to read all about stock prices or scores in the morning edition. The government should sit back and let the market decide the right way to distribute the news.

But there are huge costs to losing a vibrant core of investigative reporters covering local, national, and international stories. The Internet is well suited to detect scandals that require lots of bloggers to spend a little bit of time searching for bits of incriminating evidence. But it’s no substitute for serious investigative reporting that requires weeks of intelligent inquiry to get to the heart of the problem. Without Woodwards and Bernsteins, there will be even more Nixons and Madoffs raining mayhem and destruction.

It will take decades to revitalise investigative journalism if we allow the present corps of reporters to disintegrate. This is happening at an alarming rate. …

The problem with a BBC-style solution is clear enough. It is one thing for government to serve as one source of investigation, but quite another for it to dominate the field. A near-monopoly would mean the death of critical inquiry.

There are serious problems with private endowments as well. For starters, there is the matter of scale. Pro Publica, an innovative private foundation for investigative reporting, is currently funding 28 journalists. It is hard to make the case for a massive increase in private funding when university endowments are crashing throughout the world, imperiling basic research. More fundamentally, a system of private endowments creates perverse incentives. Insulated from the profit motive, the endowments will pursue their own agendas without paying much attention to the issues that the public really cares about.

Here is where our system of national endowments enters the argument. In contrast to current proposals, we do not rely on public or private do-gooders to dole out money to their favorite journalists. Each national endowment would subsidize investigations on a strict mathematical formula based on the number of citizens who actually read their reports on news sites.

Some might find this prospect daunting. Readers may flock to sensationalist tabloids that will also qualify for grants for their “investigations”. But common sense, as well as fundamental liberal values, counsels against any governmental effort to regulate the quality of news. So long as the endowment only subsidizes investigative expenditures, in-depth reporting will get a large share of the fund — provided that it generates important stories that generate broad interest.

The government provides the subsidy, but “the people” decide how it will be distributed. You vote with your eyes and ears. Bruce and I, in Voting With Dollars, suggest an analogous system called “Patriot Dollars” that would allow individual voters to decide how campaign-finance subsidies would be distributed. But here the voucher scheme is implemented by a less obtrusive choice architecture. The ordinary act of reading or listening to a piece of journalism tells government that this is the organization that should be subsidized.

The endowment must monitor media hits and circulation counts. This is doable. Advertisers already rely on independent audits. So can the government. Some governmental monitoring of financial matters is also necessary. News organizations would otherwise be tempted to obtain subsidies for marketing and business operations. Without minimizing the problems involved in institutional design, the creation of an effective and disciplined national endowment seems entirely realistic.

Instead of influencing the content of what will be reported on, government can empower readers by subsidizing the news organizations that have succeeded in the past.