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Economic Information Empowering Change
World Bank InstituteWorld Bank InstituteD. Kaufmann & M. Nelson D. Kaufmann & M. Nelson
with R. MacDonell, R. Stapenhurst, and T. Carringtonwith R. MacDonell, R. Stapenhurst, and T. Carrington
Presentation of the WDR ’01
Consultative Meeting on Role of Media:
Access to Business and Economic Information April 12, 2001April 12, 2001
http://www.worldbank.org/wbi/governance
Media and the Economy ““There has never been a famine in any country There has never been a famine in any country
that has been a democracy with a relatively free that has been a democracy with a relatively free press. . . I know of no exception.”press. . . I know of no exception.”
Amartya Sen
““It is now generally recognized that better, more It is now generally recognized that better, more timely, information results in better, more timely, information results in better, more efficient resource allocations.”efficient resource allocations.”
Joseph
Stiglitz ““If you cannot measure and disseminate If you cannot measure and disseminate itit, you , you
cannot change cannot change itit.”.”
Anonymous
0
10
20
30
40
50
60
70
80
90
Majority of population of developing countries do not enjoy free press
High income
Upper-middle
Lower-middle
Low income
Sources: Freedom House, M. Nelson’s Calculations
Problems of Media in Emerging Economies
Lack of legal protections for free speechLack of legal protections for free speech Repressive misuse of libel & insult lawsRepressive misuse of libel & insult laws Weak institutional capacity to respond to media Weak institutional capacity to respond to media
disclosuresdisclosures Weak management and corporate governance within Weak management and corporate governance within
media sectormedia sector Lack of independent finance: Dependence on Lack of independent finance: Dependence on
subsidies, state payments, “oligarchs”, rather than subsidies, state payments, “oligarchs”, rather than relying on readers and advertisingrelying on readers and advertising
Insufficient expertise on key subjects (economics, Insufficient expertise on key subjects (economics, business, environmental issues, governance)business, environmental issues, governance)
Broad Economic and Institutional Reform: hand-in-hand with Strengthening the Media
Economic growth spurs demand for informationEconomic growth spurs demand for information Providers of that information compete for new Providers of that information compete for new
audiences and advertisersaudiences and advertisers Media becomes more independent and begins to Media becomes more independent and begins to
play crucial role of monitoring public and private play crucial role of monitoring public and private sector behavior sector behavior
Advocate for institutional changeAdvocate for institutional change Demand for rigorous information/data, which Demand for rigorous information/data, which
empowersempowers
Case Study in Poland: Rzeczpospolita
Government sold stake in Party daily (1991)Government sold stake in Party daily (1991) Managers did management trainingManagers did management training Journalists studied economicsJournalists studied economics Beefed up economics/ business coverageBeefed up economics/ business coverage Advertising revenues soared, spurred by Advertising revenues soared, spurred by
strong demand for business pagestrong demand for business page Today newspaper is independent, profitableToday newspaper is independent, profitable
Towards Framework for Understanding the Media Environment: Data on Interference in the Media
1. Legal Structures: Laws and regulations that 1. Legal Structures: Laws and regulations that censor media contentcensor media content
2. Political Pressures: Controls on content 2. Political Pressures: Controls on content imposed by authorities, political parties, licensing imposed by authorities, political parties, licensing proceduresprocedures
3. Economic Measures: Bogus tax inspections, 3. Economic Measures: Bogus tax inspections, monopolies on newsprint and subsides to monopolies on newsprint and subsides to “obedient” media“obedient” media
Source the data: Freedom HouseSource the data: Freedom House WDR ‘01 also doing new work in this areaWDR ‘01 also doing new work in this area
1. Laws and Regulations that Influence Media Content (source: Freedom House)
Low interference Moderate High interference
Czech RepublicCzech Republic
EstoniaEstonia
HungaryHungary
LatviaLatvia
PolandPoland
RomaniaRomania
RussiaRussia
SloveniaSlovenia
AlbaniaAlbania
ArmeniaArmenia
BosniaBosnia
BulgariaBulgaria
GeorgiaGeorgia
MacedoniaMacedonia
SlovakiaSlovakia
UkraineUkraine
AzerbaijanAzerbaijan
BelarusBelarus
CroatiaCroatia
KazakhstanKazakhstan
TajikistanTajikistan
TurkeyTurkey
TurkmenistanTurkmenistan
UzbekistanUzbekistan
2. Economic Pressures on Media to Influence Content (source: Freedom House)
Low interference Moderate High interference
Czech RepublicCzech Republic
EstoniaEstonia
LatviaLatvia
LithuaniaLithuania
MacedoniaMacedonia
PolandPoland
SlovakiaSlovakia
AlbaniaAlbania
AzerbaijanAzerbaijan
BulgariaBulgaria
BosniaBosnia
GeorgiaGeorgia
HungaryHungary
Russia Russia
MacedoniaMacedonia
MoldovaMoldova
TajikistanTajikistan
TurkeyTurkey
Turkmenistan Turkmenistan
YugoslaviaYugoslavia
3. Political Pressures and Controls on Media Content (source: Freedom House)
Low interference Moderate High interference
BulgariaBulgaria
Czech RepublicCzech Republic
EstoniaEstonia
LatviaLatvia
LithuaniaLithuania
SlovakiaSlovakia
SloveniaSlovenia
BosniaBosnia
GeorgiaGeorgia
HungaryHungary
MacedoniaMacedonia
PolandPoland
RomaniaRomania
UkraineUkraine
AlbaniaAlbania
AzerbaijanAzerbaijan
BelarusBelarus
Kazakhstan Kazakhstan Russia Russia
TurkeyTurkey
TajikistanTajikistan
Afg
han
ista
n
To
go
Ken
yaE
gyp
t, A
rab
Rep
.
Ru
ssia
n F
eder
atio
n
Mo
rocc
o
Zam
bia
Arm
enia
Sin
gap
ore
Mal
i Ch
ileB
enin
Isra
el
Po
rtu
gal
Un
ited
Sta
tes
Net
her
lan
ds
-3
-2
-1
0
1
2
3
173 Countries
No
rmal
ized
In
dex
Voice and Accountability
Source: "Governance Matters" by Daniel Kaufmann, Aart Kraay and Pablo Zoido-Lobaton, May 1999. http://w w w .imf.org/external/pubs/ft/fandd/2000/06/kauf.htm.
Note: Blue dots represent mean estimates for the governance indicator. The thin vertical lines represent standard errors around these estimates. To add or delete countries from the chart, click on the "Country Select" tab below .
HIGH
LOW
Illustration of Data Empowering: Worldwide Indicators
Finland0
20
40
60
80
100
120
140
160
180
200
-2 -1 0 1 2'Voice' (including freedom of the press), Civil
Liberties and Accountability
Infa
nt
Mo
rta
lity
Voice and Transparent Information Matters for Developmental Outcomes (source: KKZ data from 170 countries)
Source: KKZ 1999
AGOALB
AREARG
ARM
AUSAUT
AZE
!
BEN
BFABGDBGR
BHR
BHS
BIH
BLRBOL
BRABRN
BWA
CANCHE
CHL
CHNCIV
CMR
COGCOL
CRI
CUB
CYP
CZE
DEU
DNK
DOMDZA ECU
EGY
ESP
EST
ETH
FIN
FJI
FRA
GAB
GBR
GEO
GHA
GIN
GMBGNB
GRC
GTM
GUY
HKG
HND
HRVHTI
HUN
IDN
IND
IRL
IRN
IRG
ISL
ISR
ITA
JAMJOR
JPN
KAZKENKGZ
KOR
KWT
LBN
LBRLBY
LKA
LSOLTU
LUX
LVA
MAR
MDA MDGMEX
MKD MLI
MLT
MMR
MNG
MOZ
MUS
MWI
MYSNAM
NER
NGANIC
NLD
NOR
NZL
OMN
PAK
PANPER PHL
PNG
POL
PRK
PRT
PRY
QAT
ROMRUSSAU
SDN
SEN
SGP
SLE
SLV
SOM
SURSVK
SVN
SWE
SWZ
SYRTCD
TGO THA
TJK TKM
TTO
TUN
TUR
TWN
TZA
UGA
UKR
URY
USA
UZBVEN
VNM
YEMYUG
ZAF
ZAR
ZMB
ZWE
r = 0.68
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
0 0.2 0.4 0.6 0.8 1
Control of Corruption and Freedom of the PressHigh
Low
Low High
Freedom of the Press (Freedom House)
Con
trol
of
Cor
rup
tion
[kk
z]
The ‘Dividend’ of Good Governance
Infant Mortality and Corruption
0
10
20
30
40
50
60
70
80
90
Weak Average Good
Control of Corruption x Development Dividend
0
2,000
4,000
6,000
8,000
10,000
12,000
Weak Average Good
Regulatory Burdenx Development Dividend
Per Capita Income and Regulatory Burden
Literacy and Rule of Law
0
25
50
75
100
Weak Average Good
Rule of Law x Development Dividend
Per Capita Income and Voice and Accountability
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Weak Average Strong
Voice and Accountabilityx DevelopmentDividend
Note: The bars depict the simple correlation between good governance and development outcomes. The line depicts thepredicted value when taking into account the causality effects (“Development Dividend”) from improved governance to betterdevelopment outcomes. For data and methodological details visit http://www.worldbank.org/wbi/governance.
0
5
10
15
20
25
30
35
40
45
50
Hungary Estonia Russia Azerbaijan
Parliamentary legislation
Decrees Central Bank Influence
Firms Reporting Negative Impact of High Level Corruption‘State Capture’ Source: WBES Survey 1999, 20 transition countries
%of
all
Fir
ms
repo
rt n
egat
ive
impa
ct o
f gr
and
corr
upti
on
%
%
%
%
%
%
%
%
%
%
Adverse Impact of ‘Purchases’ of:
State Capture exists where incomplete Civil Liberties and slow Economic Reforms
0%
10%
20%
30%
40%
Ext
ent
of S
tate
C
aptu
re
High Civil Liberties Partial CivilLiberties
High Economic Reform
Partial Econ. Reform
Low Ec. Reform
Degree of Civil Liberties in Transition Economies
Degree of EconomicReforms
http://www.worldbank.org/wbi/governance
Very High State Capture
The Media within Institutional Reform Controlled media is at the heart of political power Controlled media is at the heart of political power
in many weak, unstable regimes in many weak, unstable regimes Media was also central to establishment of Media was also central to establishment of
oligarchy in post-Soviet statesoligarchy in post-Soviet states When free and competent, has huge cross-sectoral When free and competent, has huge cross-sectoral
and cross-institutional reachand cross-institutional reach Deregulation of media early in reform process has Deregulation of media early in reform process has
big impact (Poland)big impact (Poland) Must be coupled with other institutional reforms Must be coupled with other institutional reforms
(Russia) (Russia)
What Some Countries Do
Public sector reforms that stress public Public sector reforms that stress public access to records, documents, decisions access to records, documents, decisions
Eliminate “insult laws” aimed to protect Eliminate “insult laws” aimed to protect leaders; liberalize libel laws; strengthen free leaders; liberalize libel laws; strengthen free speech protectionsspeech protections
Privatize state media and detach Privatize state media and detach broadcasting regulators from political broadcasting regulators from political influenceinfluence
Role of IFI’s and Donors
Set an example by providing access to documents, Set an example by providing access to documents, decisions, people, data – internet power…decisions, people, data – internet power…
Emphasize Emphasize access access in public sector reformsin public sector reforms Encourage governments (central, regional, local) Encourage governments (central, regional, local)
to end subsidies to mediato end subsidies to media Involve media early in governance diagnostics, in Involve media early in governance diagnostics, in
good governance programs, CDF, PRSP and other good governance programs, CDF, PRSP and other consultative processesconsultative processes
Train media in management, specialized Train media in management, specialized journalistic fieldsjournalistic fields
A Learning Program Illustration: Regional Media Capacity Building in Russia/CIS
Based on needs assessment done 1999-2000Based on needs assessment done 1999-2000 Management training network in five Russian Management training network in five Russian
cities (expand to Ukraine later)cities (expand to Ukraine later) Will train 1200 managers of local and regional Will train 1200 managers of local and regional
newspapers over three yearsnewspapers over three years Focus: Financial independence, budgetingFocus: Financial independence, budgeting Follow-up training of journalists in economics and Follow-up training of journalists in economics and
business and investigative journalismbusiness and investigative journalism
General: Also, major learning programs in business/economic journalism and in media development in Latin America, Asia, Africa.
WBI Investigative Journalism Program – Current Developments
Core Course Offered by DL – approx 500 journalists in Core Course Offered by DL – approx 500 journalists in FY01 in Africa, LAC (English, French, Spanish + FY01 in Africa, LAC (English, French, Spanish + Portuguese)Portuguese)
Internet Course – advanced stage of development – Internet Course – advanced stage of development – will be offered on a pilot basis Spring 2001.will be offered on a pilot basis Spring 2001.
Access to information a key component of these coursesAccess to information a key component of these courses Media self regulation + codes of conduct under Media self regulation + codes of conduct under
development, in collaboration with Commonwealth development, in collaboration with Commonwealth Press UnionPress Union
Major program of learning/training with partners for Major program of learning/training with partners for thousands of journalists in latin americathousands of journalists in latin america
Setting Priorities
Because nature of media-power relationship, many non-Because nature of media-power relationship, many non-free states fear freedom of mediafree states fear freedom of media
But many also realize early need for strong business and But many also realize early need for strong business and economics coverage (“Asian Tigers,” now China)economics coverage (“Asian Tigers,” now China)
An hypothesis: competent economics journalism leads An hypothesis: competent economics journalism leads to stronger independent financial position and political to stronger independent financial position and political opening for all media (SE Asia, Central Europe, Baltics)opening for all media (SE Asia, Central Europe, Baltics)
Issues within the Media
Television and radio are last to leave state control Television and radio are last to leave state control (Western Europe, BBC)(Western Europe, BBC)
Distinction between printed media (no subsidies Distinction between printed media (no subsidies should be given?) and other media?should be given?) and other media?
Cultural and language issues also play a role Cultural and language issues also play a role (France, Belgium)(France, Belgium)
Newspapers and power of internet can have big Newspapers and power of internet can have big impact on accountability and raising overall quality impact on accountability and raising overall quality of all media of all media
Myths?
State ownership is main problem for media in State ownership is main problem for media in developing countries (instead: developing countries (instead: political, economic political, economic and legal obstructiveness is much more rampant and legal obstructiveness is much more rampant and difficult to address)and difficult to address)
The media is a “tool” for development, education, The media is a “tool” for development, education, environmental awareness environmental awareness ((insteadinstead: a free media : a free media will increase the flow of information among will increase the flow of information among players in developmental processes but players in developmental processes but independence demands that it be no one’s tool)independence demands that it be no one’s tool)