Economic Information Empowering Change World Bank Institute

Economic Information Empowering Change

• World Bank Institute

• D. Kaufmann & M. Nelson

• with R. MacDonell, R. Stapenhurst, and T. Carrington

Media and the Economy

• “There has never been a famine in any country that has been a democracy with a relatively free press. . . I know of no exception.”

• Amartya Sen

• “It is now generally recognized that better, more timely, information results in better, more efficient resource allocations.” Joseph Stiglitz

• “If you cannot measure and disseminate it, you cannot change it.”

• Anonymous

Problems of Media in Emerging Economies

• Lack of legal protections for free speech

• Repressive misuse of libel & insult laws

• Weak institutional capacity to respond to media disclosures

• Weak management and corporate governance within media sector

• Lack of independent finance: Dependence on subsidies, state payments, “oligarchs”, rather than relying on readers and advertising

• Insufficient expertise on key subjects (economics, business, environmental issues, governance)

Broad Economic and Institutional Reform: hand-in-hand with Strengthening the Media

• Economic growth spurs demand for information

• Providers of that information compete for new audiences and advertisers

• Media becomes more independent and begins to play crucial role of monitoring public and private sector behavior

• Advocate for institutional change

• Demand for rigorous information/data, which empowers

Case Study in Poland: Rzeczpospolita

• Government sold stake in Party daily (1991)

• Managers did management training

• Journalists studied economics

• Beefed up economics/ business coverage

• Advertising revenues soared, spurred by strong demand for business page

• Today newspaper is independent, profitable

Towards Framework for Understanding the Media Environment: Data on Interference in the Media

• 1. Legal Structures: Laws and regulations that censor media content

• 2. Political Pressures: Controls on content imposed by authorities, political parties, licensing procedures

• 3. Economic Measures: Bogus tax inspections, monopolies on newsprint and subsides to “obedient” media

• Source the data: Freedom House

• WDR ‘01 also doing new work in this area

1. Laws and Regulations that Influence Media Content (source: Freedom House)

2. Economic Pressures on Media to Influence Content (source: Freedom House)

3. Political Pressures and Controls on Media Content (source: Freedom House)

The ‘Dividend’ of Good Governance

Firms Reporting Negative Impact of High Level Corruption ‘State Capture’ Source: WBES Survey 1999, 20 transition countries

State Capture exists where incomplete Civil Liberties and slow Economic Reforms

The Media within Institutional Reform

• Controlled media is at the heart of political power in many weak, unstable regimes

• Media was also central to establishment of oligarchy in post-Soviet states

• When free and competent, has huge cross-sectoral and cross-institutional reach

• Deregulation of media early in reform process has big impact (Poland)

• Must be coupled with other institutional reforms (Russia)

What Some Countries Do

• Public sector reforms that stress public access to records, documents, decisions

• Eliminate “insult laws” aimed to protect leaders; liberalize libel laws; strengthen free speech protections

• Privatize state media and detach broadcasting regulators from political influence

Role of IFI’s and Donors

• Set an example by providing access to documents, decisions, people, data – internet power…

• Emphasize access in public sector reforms

• Encourage governments (central, regional, local) to end subsidies to media

• Involve media early in governance diagnostics, in good governance programs, CDF, PRSP and other consultative processes

• Train media in management, specialized journalistic fields

A Learning Program Illustration: Regional Media Capacity Building in Russia/CIS

• Based on needs assessment done 1999-2000

• Management training network in five Russian cities (expand to Ukraine later)

• Will train 1200 managers of local and regional newspapers over three years

• Focus: Financial independence, budgeting

• Follow-up training of journalists in economics and business and investigative journalism

WBI Investigative Journalism Program – Current Developments

• Core Course Offered by DL – approx 500 journalists in FY01 in Africa, LAC (English, French, Spanish + Portuguese)

• Internet Course – advanced stage of development – will be offered on a pilot basis Spring 2001.

• Access to information a key component of these courses

• Media self regulation + codes of conduct under development, in collaboration with Commonwealth Press Union

• Major program of learning/training with partners for thousands of journalists in latin america

Setting Priorities

• Because nature of media-power relationship, many non-free states fear freedom of media

• But many also realize early need for strong business and economics coverage (“Asian Tigers,” now China)

• An hypothesis: competent economics journalism leads to stronger independent financial position and political opening for all media (SE Asia, Central Europe, Baltics)

Issues within the Media

• Television and radio are last to leave state control (Western Europe, BBC)

• Distinction between printed media (no subsidies should be given?) and other media?

• Cultural and language issues also play a role (France, Belgium)

• Newspapers and power of internet can have big impact on accountability and raising overall quality of all media

Myths?

• State ownership is main problem for media in developing countries (instead: political, economic and legal obstructiveness is much more rampant and difficult to address)

• The media is a “tool” for development, education, environmental awareness (instead: a free media will increase the flow of information among players in developmental processes but independence demands that it be no one’s tool)