Local newspapers make for better locales?

In a brilliant piece of arm-chair reportage, Clay Shirky dissects (literally and literarily) his local paper and discovers that out of an editorial staff of 59, only 6 folks actually report on local news.

Shirky concludes:

There are dozen or so reporters and editors in Columbia, Missouri, whose daily and public work is critical to the orderly functioning of that town, and those people are trapped inside a burning business model.

Shirky’s entire analysis, like just about everything else he does, is brilliant.

But logically flawed? We’d like to believe that local papers make a difference. But has anyone proven that they do? Do towns with newspapers function better? As Shirky himself notes, “Ann Arbor, another midwestern college town and just a bit larger than Columbia, doesn’t have a newspaper at all.” Is corruption or mayhem rampant in Ann Arbor?