Media Flashcards
1
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5.1 Introduction to the study of media (12)
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- The media play an essential role in democracy
- “The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those papers and be capable of reading them” - Thomas Jefferson,1787
- As countries make the transition from autocracies to democracies, they affirm press freedoms in equally strong terms
- Amartya Sen was the first to discuss role of media in overcoming public choice problems in the context of famine prevention
- But is formal media freedom enough to guarantee the free press that Jefferson envisaged?
- The role of media has been studied in terms of its impact on government transparency, accountability, solving the principal (citizens)-agent (government) problem, corporate governance and the state of the media industry in specific countries
- Media autonomy is influenced by consumers and the general economic environment such as information technology and delivery outlets
- Financing for the start-up and maintenance of media networks
- Political pressure on the media e.g. Media licensing is one way of restricting entry and controlling the type of content that is communicated
- For example, after the licensing laws impacting the media in Korea were eased, the number of daily newspapers in Seoul increased from six to seventeen covering a range of topics
- Djankov et al. (2002) have found that state ownership of the media is higher in countries that are relatively poorer, have more autocratic regimes and have higher levels of state ownership in other areas in the economy
- A regime of well-defined, secure and enforceable property rights must develop to allow for private ownership, foreign investment and freedom from political pressure and influence
2
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2.2 Policy guidelines for a free media (Coyne and Leeson, 2003) - 3 guidelines
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- Coyne and Leeson (2003)
- Privatize all aspects of the media industry: Media companies, whether print or broadcast must be completely privatized in order to be effective. Any government involvement will compromise the credibility of the media and provide potential for political influence of coverage
- Open borders to foreign investment and media: In addition to investment, developing media firms will benefit from outside advice from successful media firms in other countries. Moreover, granting access to foreign media firms provides yet another source of information to the populace and serves as a check on developing domestic media sources
- Consumer demand is critical: Even if the media is relatively free in a country, a lack of consumer demand will render it largely ineffective as a mechanism for coordinating around norms and policies that lead to economic development
3
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2.2 Policy guidelines for a free media (Coyne and Leeson, 2003) - Why do they give these guidelines? (7)
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- Core thesis: The media is a key institutional mechanism for achieving a successful policy mix that promotes economic development.
- This paper adds to the work of Schelling who pointed out the difference between games of conflict and games of coordination
o Games of conflict: Prisoner’s dilemma
o Games of coordination: which side of the road to drive on, language etc. - Economic development is achieved when potential games of conflict are turned into games of coordination and a free media is one such means for achieving this – the strategies chosen in a coordination scenario depend critically on agents’ beliefs, so we consider how institutions affect these beliefs.
- Between media and development causality runs both ways
- The ability of media sources to act without interference from government is critical in their role as an effective mechanism for transforming games of conflict into situations of coordination
- Once an autonomous media is in place it serves to further strengthen these underlying institutions by providing transparency regarding violations
- The very existence of foreign media sources creates an instant environment for competition as well as a model for the local media
4
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2.2 Policy guidelines for a free media (Coyne and Leeson, 2003) - Successful example POLAND (7)
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- In 1989 Poland became the first Eastern European country to overthrow its Communist regime – but it is still developing and suffers from high unemployment, low incomes and government corruption
- Changes in the media industry in Poland can be traced back to 1989 when the licensing process of newspapers and magazines was replaced with a far simpler process – soon after the number, quality and readership of publications drastically increased
- Media industry has continued to develop (5500 newspaper and periodicals on the Polish market) – diversity of topics covered has developed
- Their constitution bans censorship and provides guarantees of freedom of the press
- In short, the media in Poland increased transparency of reform and political activities lowering the cost of monitoring and understanding the activities of the government.
- As the communist party began to lose power the independent media grew substantially
- The success of the media required the prior development of certain institutional structures that allowed the media to operate successfully but once the media took hold it strengthened these structures
5
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Besley and Burgess (2002) - Media increasing political accountability in India (11)
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India important case study - home to a large vulnerable population regularly buffeted by natural shocks (droughts, floods, earthquakes, and cyclones)
* Relatively free and independent press
* Over time, measures including public food distribution and calamity relief programs have been developed to deal with the vulnerability of the poor population
* Following Independence in 1947, the introduction of representative democracy and the rise of mass media has helped to strengthen accountability and ensure effective implementation of public food distribution and calamity relief programs
* Press in India has been ascribed a major role in monitoring the actions of politicians and ensuring their responsiveness to droughts and floods that occur frequently
* Readership of regional newspapers tends to comprise local vulnerable populations who rely on action by state governments for protection * Positive correlation between newspaper circulation and govt response (measured by public food distribution and calamity relief expenditure) ○ Large and significant effect - 1% increase in newspaper circulation associated with 2.4% increase in public food distribution and 5.5% increase in calamity relief expenditures * States with higher media development were more active in protecting vulnerable citizens * 10% drop in food production associated with a 1% increase in public food distribution in states that are at the median in terms of newspaper circulation per capita * However, for states that are in the 75 percent percentile in terms of newspaper circulation per capita, we find that a 10% drop in food production is associated with a 2.28% increase in public food distribution * Given shock will be responded to more by an incumbent when media is more highly developed * Consistent with theoretical idea that this is due to improvements in political accountability
6
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2.2 Policy guidelines for a free media (Coyne and Leeson, 2003) - Unsuccessful example UKRAINE (5)
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- Ukraine is a case where development efforts have failed – media has failed to overcome the conflicts of interest
- There is a general lack of transparency regarding the Ukrainian government illustrated by the lack of a free media – the constitution guarantees freedom of press but this is rarely enforced
- Print and broadcast media are for the most part privately owned but influenced greatly by the government (directly and indirectly)
- Most direct interference is the threat of physical abuse that journalists face in Ukraine
7
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5.3 The media and economic development (4)
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- Think about causality: Is it from media to development or from development to media?
- The role of media promotes economic development, but equally effective institutions promote an effective media. For example, while an autonomous media encourages political agents to make socially improving institutional changes, where such institutional arrangements exist, it is easier for media sources to be autonomous
- Media freedom is not exogenous randomly distributed across countries. Instead, media freedom reflects underlying social, legal, political, economic, and even cultural factors, and in turn also helps to shape those factors
- Thus, causality runs in both directions (Coyne and Leeson (2003))
8
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5.4 Role of media in government accountability and the Besley-Prat model (11)
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- Even in the absence of censorship, the government may influence news content by maintaining a close relationship with the media
- Besley and Prat (2006) model of democratic politics which offers insights into how and when government captures the media and what effect this has on political outcomes
- Each media outlet faces 2 sources of profit – commercial profit and profit from collusion with government
- First is audience-driven: Audiences increase if the media outlet reports interesting information
- Second, profits from government collusion are bribes or legislative interventions
- Extent of media capture affects voters’ information and voting decisions, providing a link between media capture and government accountability
- Media pluralism provides effective protection against capture: the existence of a large number of independent media organizations makes it less likely that the government controls news provision in equilibrium
- Independent ownership reduces capture: The higher the transaction cost between the government and the media industry, the less likely that in equilibrium the industry is captured
- Media capture affects political outcomes and there are two negative effects on the utility of voters:
- Moral hazard: Elected politicians are more likely to engage in rent extraction in the knowledge that they are less likely to get caught
- Adverse selection: Intrinsically bad politicians are less likely to be identified and thus replaced. Media capture thus reduces political turnover
9
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5.5 Media freedom and political participation (8)
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- Leeson (2008) examines the relationship between media freedom from government control and citizens’ political knowledge, political participation, and voter turnout
- Examine media freedom and citizens’ political knowledge in 13 central and eastern European countries
- Consider media freedom and citizens’ political participation in 60 countries
- Results show that where government owns a larger share of media outlets and infrastructure, regulates the media industry more, and does more to control the content of news, citizens are more politically ignorant and apathetic
- Where the media is less regulated and there is greater private ownership in the media industry, citizens are more politically knowledgeable and active
- Why? Because where government interferes with the media, individuals know less about basic political issues and are less politically involved so are less able to monitor or punish effectively the activities of self-interested politicians
- When politicians are free from accountability to voters, they are more likely to pursue privately beneficial policies, which in turn lead to lower development
- Low media freedom is strongly associated with poor political knowledge, low political participation, and low voter turnout
10
Q
5.6 Who owns the media? Djankov et al. (2003) (2)
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Djankov et al. (2003)
* Examine ownership patterns of newspapers and television (and to a lesser extent radio) in 97 countries around the world
* Try to determine who owns the media and whether state ownership has its benefits, as the public interest theory of media ownership suggests.
11
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5.6 Who owns the media? Djankov et al. (2003) - PUBLIC INTEREST THEORY (1+3)
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- PUBLIC INTEREST (Pigouvian) theory is the theory that the government maximizes the welfare of consumers.
- Government ownership of the media, perhaps even as a monopoly, is then desirable for 3 reasons:
1. information is a public good; once it is supplied to some consumers, it is costly to keep it away from others, even if they have not paid for it
2. the provision as well as dissemination of information is subject to strong increasing returns (there are significant fixed costs of organizing information gathering and distribution facilities, but once these costs are incurred, the marginal costs of making the information available are low
3. if consumers are ignorant, and if private media outlets serve the governing classes, then state media ownership can expose the public to less biased, more complete and more accurate information than it could obtain with private ownership. These arguments were all put forward when the BBC was started.
12
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5.6 Who owns the media? Djankov et al. (2003) - PUBLIC CHOICE THEORY (1+3)
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- PUBLIC CHOICE theory, in contrast, holds that a government-owned media outlet would distort and manipulate information to entrench the incumbent politicians, preclude voters and consumers from making informed decisions, and ultimately undermine both democracy and markets.
o Private and independent media supply alternative views to the public, allowing individuals to choose among political candidates, goods, and securities, with less fear of abuse by unscrupulous politicians, producers and promoters.
o Competition among media firms also assures that voters, consumers, and investors obtain, on average, unbiased and accurate information.
o The role of such private and competitive media is held to be so important for the checks-and-balances system of modern democracy that they have come to be called “the fourth estate”, along with the executive, the legislature, and the courts.
13
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5.6 Who owns the media? Djankov et al. (2003) - findings (12)
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- The evidence in Djankov et al. (2003) strongly supports public choice theory, NOT public interest theory.
- They find that media firms nearly universally have ownership structures with large controlling shareholders and that these shareholders are either families or governments.
- In the sample of 97 countries they use, only 4% of media enterprises are widely held. On average, family-controlled newspapers account for 57% of the total and family owned television stations for 34% of the total. The state controls on average 29% of newspapers and 60% of television stations. The state owns a huge share on average (72%) of the top radio stations.
- Result of near total absence of firms with dispersed ownership in the media industry is extreme and is consistent with the insight that the large amenity potential of ownership of media outlets creates competitive pressures towards ownership concentration. The benefit is the same for governments and controlling private shareholders from controlling media outlets; the ability to influence public opinion and the political press.
- In the Americas and Western Europe, state ownership of newspapers is very low (in Western Europe, none of the top 5 daily newspapers are owned by the state, and in the US, the majority of newspapers have been owned and managed by single families for many decades.
- They examine 4 determinants of media ownership: the level of development, government ownership in other sectors, primary school enrolment and autocracy.
- Regression figures: (SOE= index of the involvement of state owned enterprises in the economy)
- They find that all these 3 variables: GNP per capita, autocracy and the SOE index, have a significant effect in the regression (determining State Ownership of the Media)
- They show that countries that are poorer, more autocratic, with lower levels of primary school enrolment, and with higher levels of state intervention in the economy also have greater state ownership of the media.
- They also find that countries with greater state ownership of the media have less free press, fewer political rights for citizens, inferior governance, less developed capital markets, and inferior health outcomes (they find this last result to be particularly important in light of the argument that state ownership of the media serves the needs of the poor). The negative association between government ownership and political and economic freedom is stronger for newspapers than for television.
- Although none of this evidence can be unambiguously interpreted as causal, it strongly suggests that there is no empirical evidence of any benefits of state ownership hence data are inconsistent with these Pigouvian argument
14
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5.7 Radio, television and social capital - INDONESIA (Olken, 2009) (12)
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- Olken (2009) investigates the impact of television and radio on social capital in Indonesia
- Social capital is the social interactions, networks, and groups that link people in society together. Measured as participation in social organisations and trust
- Detailed data collected from over 600 villages in East and Central Java in 2003-2004
- To measure the effect of the media, two sources of variation in signal reception:
–One based on Indonesia’s mountainous terrain
–Differential introduction of private television throughout Indonesia from 1990s to 2000s - Increased signal reception leads to more time watching television and listening to the radio
- Each additional television channel for which the signal is strong enough to be received over-the-air is associated with villagers watching, on average, about seven minutes of additional television per day, as well as an additional seven minutes of radio each day, likely reflecting the high correlation between radio and television signals
- Villages with better access to television and radio signals, where villagers spend more time watching television and listening to the radio, have lower levels of participation in a wide range of village activities
- Effects are particularly strong among community self-improvement activities, neighbourhood associations, school committees and informal savings groups
- Effects are felt more strongly among wealthier households
- Declines in social participation represent a net decline in social activity, rather than a shift from formal social groups to informal gatherings
–Associated with less participation in social organizations and with lower self-reported trust - Improved reception does not affect village governance, at least as measured by discussions in village meetings and by corruption in village road projects
- Olken then examines the relationship between television and radio exposure and governance of a village road-building program. Despite finding a negative impact of better television on attendance at village meetings about the road project, he finds no impact on what happens at the meetings. He finds also find no relationship at all between television reception and “missing expenditures” in the road project. Together, these results suggest that, to the extent that television reception leads to plausibly exogenous variation in social capital, this does not translate into worse governance outcomes, at least as measured here.
15
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5.7 Radio, television and social capital - formal media and free press - RUSSIA
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- Russia case study: Formal media freedom not enough to guarantee free press. All national broadcasters are now owned by state-controlled companies. Most national newspapers are in the hands of a small number of wealthy individuals who are vulnerable to political pressure.
- Not just Russia: Freedom House reports a not-dissimilar combination of formal press freedom and substantial political influence in several other democracies around the world, from Thailand to Italy, from India to Mexico.
- Italy provides an example where media owners are indirectly affected by government policy. For instance, until 2003 two of the top three Italian national newspapers were controlled by the FIAT group, which could benefit from a restriction on car imports from Asia, a subsidy for new car purchases, or large investments in road construction (relative to comparable countries). (opinion: correlation =/= causation, careful when using this example)
- Besley and Prat- Model: Extent of media capture -> Affect voters’ information -> Affect voting decisions. Findings listed below
