Linköping University | Department of Management and Engineering (IEI) Master thesis | Political Science Spring semester 2017 | ISRN: LIU-IEI-FIL-A—17/02640--SE

State subsidizing private media in Republic of – a potential way to correct media market failure and promote Quality of Government?

Statligt stöd till privata medier i Moldavien – ett potentiellt sätt att korrigera mediemarknadens misslyckande och förbättra styrningskvaliteten?

Diana Savina

Supervisor: Per Jansson Examinator: Mikael Rundqvist

Linköping University SE-581 83 Linköping 013-28 10 00, www.liu.se

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Title:

State subsidizing private media in Republic of Moldova – a potential way to correct media market failure and promote Quality of Government?

Abstract:

2017 has been described as a decisive year for the Republic of Moldova. Following years of economic and political turmoil, it is more urgent than ever before that crucial reforms are not only adopted, but fully implemented – primarily within justice, media and banking sectors. Using a theory of impartial institutions and two central theories of state intervention into media markets, this counterfactual deductive thesis sets out to investigate arguments for and against a system of state subsidies to private media as a tool to increase Quality of Government in Moldova. Through analyses of qualitative interviews with six country experts within relevant fields as well as secondary data, the conclusion of this single case study is primarily confirming previous research indicating on the one hand, that a more social responsible role of the state within Eastern European media markets is a realistic future path, on the other hand it can hardly be expected soon. Further, the possibility of media to improve Quality of Government is perceived as low – even with sufficient financial resources – due to lack of other prerequisites such as accessibility, accountability and responsiveness; as well as low scores on crucial indicators such as , law and order and quality of bureaucracy. Just like democratic institutions can be destabilizing under wrong circumstances, state subsidies given to wrong beneficiaries within a media market, could undermine democratic legitimacy and accountability. Both findings of previous research – related to state governance on the one hand and media governance on the other – are perceived as particularly relevant in this study of Moldova. However, there have been promising signs lately on economic structural reforms improving the conditions for civil society and media in Moldova, indicating for reevaluating the potential of state support in the future. Further, I recommend greater emphasis put on the distinction between political and non-political owners when examining the effects of media ownership concentration and its effects on governments and societies at large.

Keywords:

Quality of Government, Political Decay, Corruption, Media Freedom, Media Governance, Media Economy, Market Failure, State Subsidies, Counterfactuals

Words:

24 888

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Table of contents Table of contents ...... 3 1. Introduction ...... 5 1.1 Purpose, Research Areas and Research Questions ...... 8 1.2 Limitations ...... 8 2. Theories ...... 9 2.1 Quality of Government (QoG) theory ...... 9 2.2 Liberal theory of the press ...... 10 2.3 Social responsibility theory the press ...... 10 2.4 Theoretical explanatory model ...... 11 3. Concepts ...... 13 3.1 Market Failure ...... 13 3.2 Media Freedom ...... 13 3.3 Political Parallelism ...... 14 4. Previous Research: Government ...... 15 4.1 Quality of Democracy and Government ...... 15 4.2 Government and the rise of Clientelism ...... 16 4.3 The Italian path of Government and Media ...... 17 5. Previous Research: Media ...... 19 5.1 Media Freedom and Corruption ...... 19 5.2 Media Freedom and Quality of Government ...... 20 5.3 Political Parallelism: Media and its relationship to the politics ...... 22 5.3.1 Northern European, Democratic Corporatist model ...... 24 5.3.2 The North Atlantic, Liberal Model ...... 25 5.3.3 The Mediterranean, Polarized Pluralist Model ...... 25 5.3.4 The Eastern European, post-Communist Model ...... 25 5.4 State subsidies to correct media market failure ...... 25 5.5 Media Capture ...... 28 6. Eastern : the current state ...... 30 6.1 Democracy in East European post-Communist states ...... 30 6.2 Media in East European Post-Communist states ...... 30 7. Methods of collecting and analyzing data ...... 33 7.1 Selection of Moldova as the case to be studied ...... 33

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7.2 Collection of data ...... 34 7.3 Sample and selection of interviewees ...... 34 7.4 Internal and External Validity ...... 35 7.5 Reliability ...... 36 7.6 Interview guide ...... 37 7.7 Experiences from the field ...... 37 7.8 Counterfactual analysis ...... 38 7.9 Thematic analysis of the qualitative data ...... 39 7.10 Operationalization of explanatory theoretical model ...... 40 7.11 Experiences from coding and analyzing ...... 41 Case study of Moldova ...... 42 8. Part 1: Secondary data on Moldova ...... 43 8.2 Quality of Government and corruption in Moldova ...... 44 8.3 Media freedom in the Republic of Moldova ...... 47 9. Part 2: Primary data and analysis ...... 49 9.1 Thematic subchapter: Political Parallelism ...... 49 9.2 Thematic subchapter: The Media Market ...... 59 10. Conclusion and discussion ...... 69 References ...... 74 Appendix 1: Facesheet ...... 77 Appendix 2: Interview guide ...... 78

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1. Introduction

Poverty is a bad thing, but being just poor in a country with ensured supremacy of the law and democracy is one thing. Another thing is having a massively brain drained country, with the intellectuals running away, remaining just less informed but patient citizens. Then you can create dangerous schemes.1

There is a paradoxical reality I aim at grasping with this thesis. On the one hand, there are close ties between the interlinked Moldovan politics and media. On the other hand, there is a hostile relationship between the two. The same goes – of varying degrees – for most East European, former Communist states. Noting the varieties of state subsidies to private media in many more mature Western democracies – established to promote media pluralism, independence and sustainability – made me curious why there is an absence of the same system in the former Communist states. The purpose of this deductive thesis is to investigate arguments for and against state subsidies to private media as a tool to correct media market failure and increase Quality of Government in the Republic of Moldova. However, it could be argued that the very purpose of this thesis includes an epistemological problem, since it intends to study something that does not exist. Therefore, one could define it as what is to be studied is the absence of state subsidies to the media, and the situation that emerged because of the dependence on the remaining alternatives. It will be done through a counterfactual and theoretical analysis; related to previous research, I will analyze primary data from six qualitative interviews with country experts and secondary data existing on Moldova. The point of departure is Quality of Government (QoG) as a theory of impartial institutions. Dysfunctional government institutions are one of the main causes of the world’s most pressing economic and social problems.2 We have a broad understanding of the role of free media for the access to public authority, but less knowledge of the free media’s role to impact the way in which power is exercised. Färdigh argues “considering the discrepancies within the robust relationship between media freedom and QoG, more research is needed – something seems to be missing”.3

1 Carasciuc, Lilia. Interviewed 2017-02-23. 2 Rothstein and Tannenberg. The Quality of Government and Development Policy A Report to the Swedish Government’s Expert Group for Aid Studies, 14 3 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 2

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The issue of state subsidies to private media is understood through two central theories on state intervention. The liberal theory of the press, resting on the principle that the less government is involved in the press the better, while the social responsibility theory of press sees this liberty as insufficient and ineffective. That the media needs the state has gained currency among theorists pointing at the importance of the watchdog function and provision of political information for a functioning democratic system.4 For several reasons, Moldova particularly caught my attention. I am convinced that the reasons will become clearer for the reader throughout the thesis, nevertheless am I going to scratch the surface in this Introduction. Whether Moldova is to be considered a typical or an atypical case can be discussed, but it is undoubtedly an extraordinary case worth studying related to the Quality of Government theory emphasizing how the power is exercised. On its path towards the European Union, Moldova was initially described as a “success story” within the frames of the Eastern Partnership, the union's initiative for governing its relationship with its neighboring post-Communist states. Combating corruption is one of the main priorities of the 2014 EU-Moldova Association Agenda, and has been one of the top priorities of all Moldovan Governments since 2009. However, it is still the main obstacle for economic recovery, as well as the main cause for the deep political and economic crisis in the country since 2013.5 According to Freedom House, the year 2017 will be decisive for Moldova. Many of the promised reforms have failed to be implemented so far, the most crucial concerning the sectors of justice, media and banking.6 The media legislation is largely sufficient7 and can be interpreted as largely sufficient for the media at the input-side of the media system. However, severe problems arise on the output-side. According to Media Sustainability Index report on Moldova, the fact that “politicians control the press by founding, buying, selling and closing media outlets and by establishing dominant positions in the media market” has seriously affected medias mission to serve the public.8 Media outlets serving their owners interests are not affected by the worsening economic conditions, however, a clear political influence over content and editorial policies is noted.9 In Moldova, only public media receive support from the state,

4 Murschetz. State aid for newspapers – Theories, Cases, Actions, 376 5 Gribincea. Moldova: Investigating high-level corruption – progress or illusion? 4 6 Gotişan. Nations In Transit 2017 – Moldova, 3 7 IREX. Media Sustainability Index 2016. The Development of Sustainable Independent Media in Moldova, 6 8 Ibid., 11 9 Ibid., 14

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while according to European standards, private media should be supported through economic policies as well.10 Political parallelism is the “link between the media system and the political power, and the reflection of political power and the political system in the media system”.11 Eastern European post-Communist countries are characterized by late democratization, incomplete modernization, widespread clientelism, combined with strong state control over media – even state paternalism according to some.12 Republic of Moldova remains unconsolidated after 25 years of independence,13 and according to Całus, Moldova risks becoming “a borderland country in a state of permanent social, political and economic malaise”.14 Why is it then interesting to investigate what speaks for and against a system of state subsidies within the Moldovan media economy? Because media system characteristics are important for the variation in Quality of Government and free media is often associated with well-functioning markets.15 The overall economic situation in Moldova does not foster financial thus editorial independence of the media. The dominant position of companies owned by the leader of the ruling party indicates existing anti-concentration mechanisms are not applicable to media.16 All this while the very few independent media outlets are highly dependent on funds coming from international donors. Thus, a market corrective action like subsidies could on the one hand be assumed to increase media freedom and QoG. On the other hand, is this general rule applicable in a country with institutions and media captured by the political leaders themselves? “Things do not receive subsidies, people do. (…) That is the crux of the political economy of subsidization”, according to Dirk J. Wolfson.17 Subsidies could undermine democratic legitimacy and perception of accountability if given to the wrong beneficiaries.18 Dumitru Alaiba wrote in January 2017 that recent financial crimes shook Moldova economically, politically and socially. However, “because of pervasive corruption and , Moldovan institutions alone cannot, and will not, act effectively”.19 Not only should the Quality of Government be a matter of concern for the Moldovan

10 IREX. Media Sustainability Index 2016. The Development of Sustainable Independent Media in Moldova, 13 11 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 23 12 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 20 13 Całus. The unfinished state – 25 years of independent Moldova, 83 14 Ibid., 83 15 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 32 16 IREX. Media Sustainability Index 2016. The Development of Sustainable Independent Media in Moldova, 14 17 Wolfson. Towards a theory of subsidization, 16 18 Terzis. European Media Governance, 447 19 Alaiba. Resetting the Moldovan Banking Sector: What can Europe do and why? 40

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population, but also researchers, policymakers and international donors. The “bank theft of the billion dollars” in 2014 and Moldovan courts role in the so called “” I argue proves why the quality of a small country’s institutions can have consequences reaching far beyond the national borders. In the words of Färdigh; “we need a more nuanced picture of the importance of media freedom in the processes of establishing, improving and maintaining Quality of Government” – filling the gap between theory and the empirical world.20

1.1 Purpose, Research Areas and Research Questions In its widest terms, this thesis concerns Government and Media Freedom. The purpose is to investigate whether state subsidies to private media could be a treatment of the market failure in East European media economies, and whether state subsidies in this way can promote Quality of Government. It will be done by reflecting on the absence of state subsidies in Moldova and the situation that emerged due to the dependence on the remaining alternatives. RQ1: How can the relationship between the Moldovan media and politics be described? RQ2: How does the political parallelism in Moldova differ from the Northern European countries providing state subsidies to private media? RQ3: What speaks for and against a system of state subsidies as a correction of the Moldovan media market failure?

1.2 Limitations Some distinctions are important to emphasize regarding the scope of this thesis. Firstly, the thesis concerns state subsidies to private, commercial media – not the research fields of state ownership and public service media. Secondly, the emphasis is placed on political and economic factors of relevance to the discussion of state subsidies. Less focus is therefore attached to aspects such as the journalistic profession and the quality of journalism, as well as the safety of journalists, with the exception to the extent it is relevant for the political or economic aspects. Thirdly, the sample of interviewees represents the Republic of Moldova on the west side of Dniester River, and do not represent neither the autonomous breakaway region nor the autonomous territorial unit of Gagauzia, since the media situation in these regions differs in terms of state ownership and state interference.

20 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 29

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2. Theories Initially, I will present a theory of impartial institutions, followed by two central theories of state intervention within the media market. In the end of the chapter, I am contributing with a theoretical explanatory model over how I perceive these three theories to be linked.

2.1 Quality of Government (QoG) theory The essential importance of “good governance” is a central theme in the current political economy.21 Quality of Government (QoG) is a theory of impartial institutions exercising government authority. Rothstein and Teorell argues a high level of democracy is not a guarantee of high Quality of Government. Instead, the concept of democracy captures the input side and the access to public authority, but oversees the way in which public authority is exercised. According to Rothstein and Teorell democracy is a “necessary but insufficient criterion” of QoG. They argue the importance of how power is exercised would be left out, if QoG were equal to democracy.22 Rothstein and Teorell argues the QoG approach differs from many traditional development perspectives in its emphasize of the output side of the political system over the input side. Democracy is limited to the “input” side of the political system and its quality can be understood as a combination of how “free and fair” the elections are and how well civil and political rights are protected.23 Quality of Government on the other hand, stressing the output side, consists of rule of law, the quality of the public goods and the effectiveness of government agencies responsible for implementing public policies. Democracy as a form of political equality on the input side, must be complemented with impartiality as equality on the output side.24 Impartiality is defined as the opposite of all types of favoritism, “when implementing laws and policies, government officials shall not take into consideration anything about the citizen/case that is not beforehand stipulated in the policy or the law”. 25 Further, Rothstein and Teorell include other practices that are usually not seen as corruption, such as clientelism, patronage, , , discrimination, and cases where administrative agencies are “captured”.26

21 Rothstein and Tannenberg. The Quality of Government and Development Policy A Report to the Swedish Government’s Expert Group for Aid Studies, 14 22 Rothstein and Teorell. What Is Quality of Government? A Theory of Impartial Government Institutions, 165 23 Rothstein and Tannenberg. The Quality of Government and Development Policy A Report to the Swedish Government’s Expert Group for Aid Studies, 14 24 Ibid., 14 25 Rothstein and Teorell. What Is Quality of Government? A Theory of Impartial Government Institutions, 170

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2.2 Liberal theory of the press Liberal ideas promote leaving the market to itself and put faith in competition to ensure press diversity. It rests on the leading principle that the less government becomes involved the better. The authors of “Four theories of the press” argued that freedom to publish and compete in an unrestricted market will produce a diverse, accountable, and representative press. The main function of the state is to maintain a stable framework “within which the free forces of individualism may interact”.27 According to the liberal theory of the press, press freedom is identified as an individual’s right to property and mean the right to own and publish without restraint or interference from the government. An optimal allocation of press resources is best realized by an unrestricted market providing a general framework offering predictable and stable working conditions for free enterprise. Corrections should only aim at abolishing obstacles to competition and market access.28

2.3 Social responsibility theory the press The theory formulated by Theodore Peterson sees a purely negative liberty as insufficient and ineffective – instead, negative liberty is perceived as an empty liberty; it is like telling a man that he is free to walk without first making sure that he is not crippled. “It is not enough to tell a man that he is free to achieve his goals; one must provide him with the appropriate means of attaining those goals”.29 It was Robert Picard who introduced the concept of positive and negative freedom of the press. While negative press freedom refers to solely the absence of legal or political prohibitions and the absence of censorship, positive press freedom relates to the effective capacity of individuals to distribute their opinions. Efforts to promote positive press freedom could be “calls for social responsibility in the media, economic regulation, the right to reply, 30 access to media, freedom of information, and state intervention in media economics”. Thus, governments take the responsibility to secure a varied choice of press products. The social responsibility theory represents continental Europe and Scandinavia, where it supplements free-market mechanisms to promote diversity.31

26 Ibid., 169 27 Siebert et al. Four Theories of the Press, 53 28 S Ibid., 53 29 Ibid., 93-94 30 Picard. The press and the decline of democracy. The democratic socialist response in public policy, 43 31 Siebert et al. Four Theories of the Press, 93-94

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2.4 Theoretical explanatory model Why then, is the Quality of Government (QoG) theory relevant for the study of subsidies to the media? I argue there are clear links between the theoretical fields – on the one hand the QoG theory with its input and output construct, on the other hand the two paradigms of liberal versus social responsibility theory of the press. To make this abstract notion clearer, I am contributing with a theoretical explanatory model, see figure 1.

Figure 1: Explanatory model for how this thesis understands the links between a theory of impartiality within governing state institutions, emphasizing the “output” side of the political system over the “input” side – and theories of state intervention in the media sector.

Above in the model, we have the two-sided QoG theory based on the idea that Democracy as political equality on the “input” side of the Political System, should be complemented with Impartiality as quality on the “output” side. Below in the model, we have the Media System.

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To it, I have linked the two paradigms on state intervention within the media market. The liberal ideal of the press is limited to the absence of legal and political prohibitions, as well as absence of censorship. It includes the constitutional rights to freedom of property and speech. In line with the reasoning in QoG theory, according to which quality of democracy only concerns the input side of the Political System, leaving out how power is exercised, I translate the liberal theory of the press – stressing the constitutional rights, leaving the rest to a free and fair market – to also limit its scope to the “input” side of the media system, leaving out how and by who the power within the media system is exercised. Similarly, where the QoG theory emphasizes impartiality on the “output” side, so do the social responsibility theory of the press with its notion about negative and positive media freedom. The way in which the social responsibility theory sees journalism as a “public good” and stresses the importance to promote positive media freedom, corresponds to the QoG theory stressing the quality of public goods, the rule of law and the effectiveness of government agencies responsible for implementing public policies. Note, however, that this explanatory model is not intended to be tested within the frames of this study. It should rather be perceived as the glasses we should see through during the analysis, to be able to answer the research questions. I constructed the model to make sure I have the reader with me on how I perceive the links between the research fields, from an early stage of the thesis. Otherwise, there is a risk the theories will become too abstract. Between the Political System and Media System is where the “Political Parallelism” is occurring. This will be further described in the following “Concepts” chapter. The explanatory model will be operationalized in the “Methods” chapter.

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3. Concepts Three central concepts for this thesis will be presented in this chapter; Market Failure, Media Freedom and Political Parallelism.

3.1 Market Failure According to Picard, the theoretical construct of “market failure” is central to understanding the need for subsidies to the media. It is often related to mainstream neoclassical economic thought.32 Market failure refer to a scenario when the market is unable to efficiently allocate resources, especially for public goods. State intervention has been legitimated when private enterprises is not investing in critical social services because it cannot extract the returns that would justify the necessary expenditures. Therefore, the provision of social services is not satisfied by the market solely.33 According to Picard, the sources of market failures within the media sector range from “in-built characteristics of the product and cost of media goods, to forces driving competition toward failure on both the supply and demand side of a market transaction, as well as to constraints embedded in the organizational structures of the markets”, such as dominant firms raising entry barriers or through ownership concentration 34 and vertical integration. Positive externalities appear when services produce benefits for other than the paying consumer, while negative externalities are costs suffered by a third party beyond the producer and consumer. Picard argue taxation is the usual proposed solution for negative externalities, and a subsidy the usual proposed solution for positive externalities. The subsidy shift either supply or demand, depending on whether it is given to the providers or the consumers.35

3.2 Media Freedom There is a lack of conceptual agreement on media freedom, but according to Färdigh a commonly used definition of media freedom say, “media can only inform, educate and report critically on those in power and thus contribute to Quality of Government if media freedom is guaranteed”.36 This means “operating freely vis-à-vis political power” and without political constraints, but also against economic and legal pressures, as well as

32 Picard. In Murschetz. State aid for newspapers – Theories, Cases, Actions, 364 33 Ibid., 364 34 Ibid., 381 35 Ibid., 381 36 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 29

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independence of the judiciary and official media regulatory bodies. While liberal perspectives on media freedom seeks to “protect the individual from the abuses of the state”, more democratic perspectives argue media should “seek to reduce the imbalances in society”.37 For this thesis, Weavers definition of Media Freedom is used. It includes both a relative absence of governmental restraints on the media and a presence of those conditions necessary for spreading diversified opinions to a relatively large audience.38

3.3 Political Parallelism The concept of political parallelism was developed by Hallin and Mancini. They define it as “the degree to which the structure of the media system parallels that of the party system or, more broadly, the extent to which the media system reflects the major political divisions in society”.39 Hallin and Mancini treats the degree of mass media partisanship and the degree of media-political elite integration as related components of political parallelism.40 The meaning of political parallelism is according to Färdigh the “link between the media system and the political power, and the reflection of political power and the political system in the media system”. 41 Political parallelism on the one hand, and the level of state intervention and the “power of the political system to shape the structure and functioning of the media system” on the other, Färdigh argues, are potential explanatory factors of the variations of Quality of Government across countries with free media.42

37 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 29 38 Weaver. The Press and Government Restriction: a Cross-National Study Over Time, 152 39 Hallin and Mancini. Comparing Media Systems – Three models of Media and Politics, 21 40 Ibid., 22 41 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 23 42 Ibid., 23

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4. Previous Research: Government In the following two chapters, the reader will be presented to the relevant previous research, with an emphasis on areas such as the importance of qualitative governance, the relationship between media and politics, media governance and economy, captured states and captured media, as well as media’s role in curbing corruption and promoting quality of government. Among the most important titles that formed the basis of understanding for this thesis, one could mention “Comparing Media Systems - Three models of media and politics”43, “European Media Governance”44, “State Aid for Newspapers”45, “Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy”46 and “What’s the use of free media? The Role of Media in Curbing Corruption and Promoting Quality of Government”47. It’s mainly against this backdrop the data will be analyzed.

4.1 Quality of Democracy and Government More people than ever live in electoral democracies – even in countries where it was earlier unimaginable. As noted by Rothstein and Tannenberg this should be a good thing, “to the extent that democracy works as a remedy for state mismanagement, serves as a cure against various forms of corruption, and paves the path towards development by reducing poverty”.48 However, liberal representative democracy has not delivered on its promises. Holmberg and Rothstein examined the relationship between democracy and more than thirty standard measures of human wellbeing and development. Their cross national comparative empirical analysis showed either “weak”, “no”, or “negative” correlations between the level of democracy and the various measures of development. They even argue for an absence of any clear relationship between democracy and United Nations Human Development Index.49 Plentiful of empirical suggestions show that the opposite to human well-being is caused by the fact that most the world’s population live in societies that are dominated by dysfunctional government institutions.50 Holmberg and Rothstein51 constructed an index called the Good Society Index (GSI). While the correlation with the level of democracy were absent, the opposite was the case of

43 Hallin and Mancini. Comparing Media Systems – Three models of Media and Politics, (2004) 44 Terzis. European Media Governance (2008) 45 Murschetz. State aid for newspapers – Theories, Cases, Actions (2014) 46 Fukuyama. Political Order and Political Decay, (2014) 47 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, (2013) 48 Rothstein and Tannenberg. The Quality of Government and Development Policy A Report to the Swedish Government’s Expert Group for Aid Studies, 16 49 Ibid., 18 50 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 10-11

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the correlation between GSI and Quality of Government (QoG). They argue this is the reason why development research and policy should pay more attention to QoG-issues.52 While there is a lack of theory for under what circumstances institutions with high QoG are more likely, there is a consensus that “efficient, trustworthy, reliable, impartial and competent government institutions reduce corruption and enhance bureaucratic quality” leading to higher quality of government.53

4.2 Government and the rise of Clientelism In his recent book “Political order and political decay - From the Industrial Revolution to the Globalization of Democracy”, Francis Fukuyama aimed at explaining why some developed countries manage to enter the twenty-first century with reasonably effective and uncorrupt governments, while others “continue to be plagued by clientelism, corruption, poor performance and low levels of trust both in the government and in society more broadly”. 54 He sets out to answer whether our current political arrangements are part of the solution, or part of the problem? He analyzes failures and (the “admittedly limited number of”) successes of the transition from a patrimonial to a modern state.55 Fukuyama describes how all modern societies began with what Weber called patrimonial states without universally applied rules, where the access to political power and economic opportunity was limited to individuals favored by the ruler. The government with an impersonal and universal bureaucracy developed over time, but in many cases it “fails to develop at all”.56 Political decay sets in when developed and impersonal institutions degenerate into societies where association and affiliations are being reintroduced as determinants of fortune. Fukuyama calls it repatrimonialisation, but it is generally referred to as neopatrimonialism.57 Previous research has also shown “the transformation from a “classical” to a political bureaucracy is (…) a quickly escalating process”58. Corruption undermine the trust crucial for the proper functioning of the state, leading inescapably to higher levels of corruption. Patronage and corruption create a “spiral of malfunctioning”.59 Once a political

51 2015 52 Rothstein and Tannenberg. The Quality of Government and Development Policy A Report to the Swedish Government’s Expert Group for Aid Studies, 16 53 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 11 54 Fukuyama. Political Order and Political Decay, 198 55 Ibid., 198 56 Ibid., 201 57 Fukuyama. Political Order and Political Decay, 201 58 Manow. Low-trust and high-trust equilibria in politics: Party Patronage and as Coordination Games, 7 59 della Porta and Vannucci. Corrupt Exchanges: Actors, Resoucres and Mechanisms of Political Corruption, 256

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system is infected with mutual mistrust and deviant political behavior, the sickness will spread to the entire political body.60 Fukuyama insists that democratic institutions can be destabilizing under wrong circumstances. He argues that three building blocks must coexist for a well-ordered society: a strong state, the rule of law and democratic accountability. Regarding the discussion about the size of the state, Fukuyama imply a strong state doesn’t needs to be a large one, but establishes the paradox of mature political development, “if you want a less controlling state, you need a strong state to achieve it”. To the question why clientelism is so much more pervasive in some countries than other, Fukuyama argues it depends on “the sequence by which modern institutions are introduced and the stage at which the democratic franchise is first opened”.61 Clientelism appears when democracy arrives before a modern state has had 62 time to consolidate into an autonomous institution with a supporting political coalition. However, the problem is, as a matter of institutional construction, it is not easy to create an autonomous and strong bureaucracy, or put in place a liberal rule of law. Most contemporary developing countries do not have a realistic option to sequence in the right order and “there is no automatic mechanism that produces clean, modern government”.63 However, Fukuyama states, civil society groups and political leaders organizing reformist coalitions could push for public-sector reform and end gross corruption.64

4.3 The Italian path of Government and Media This last subchapter will function as a bridge over from the “Government”-chapter to next chapter with previous research on “Media”. It might be confusing for the reader with a subchapter about Italy, since Moldova will be compared to the Northern European media system where state subsidies are common. However, there are logical reasons for this decision. Italy is a particularly controversial case of involvement of politicians in media. Recent years, some have described processes “Italianization” and “Berlusconization” of the media sector in Moldova. In general, the historical path of primarily southern Italy has similarities to the present of East Europe. To be able to discuss the influential role of certain politicians within the Moldovan media sector – primarily Vladimir Plahotniuc, vice president

60 Manow. Low-trust and high-trust equilibria in politics: Party Patronage and Political Corruption as Coordination Games, 7 61 Fukuyama. Political Order and Political Decay, 201 62 Ibid., 202 63 Ibid., 211 64 Ibid., 212

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of the Democratic Party – we first need to get familiarized with the Italian process under the rule of former Prime Minister and Media magnate Silvio Berlusconi. Fukuyama describes Italy and its “low-trust equilibrium”, referring to Robert Putnam who demonstrated empirically the variance of quality of local government across Italy. The most important source of poor government was the history of clientelism – neither structural economic nor political factors.65 Both southern Italy and Greece have been described as cases of “modernization without development” with weak governments in terms of legitimacy and capacity.66 The entry point for development was social mobilization and early democratization, not state building or economic growth. The weakness of the capitalist economy made the state an early object of capture. Clientelism weakened state capacity, which then constrained prospects for economic growth.67 Wyka have noted, Silvio Berlusconi “enjoyed a degree of power over both commercial and public service television that has no precedent in any developed democracy”.68 For Berlusconi media ownership was of great political value. Publicly, he was a modern, reform-minded and free-market politician who wanted to reduce taxes. “Unfortunately, Berlusconi was himself a product of the old system, with a clientelistic mind- set. If the essence of a modern state is the strict separation of public and private interest, Berlusconi moved in the exactly opposite direction”, Fukuyama writes.69 Not only did he fail to implement reforms of the public sector, he launched attacks on the judiciary and its corruption investigations against him. He used the parliamentary majority to vote himself immunity and did not reform the clientelistic politics in the South.70

65 Fukuyama. Political Order and Political Decay, 109 66 Ibid., 122 67 Ibid., 204 68 Berlusconization of the mass media in East Central Europe - The new danger of Italianization? 69 Fukuyama. Political Order and Political Decay, 121 70 Ibid., 121

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5. Previous Research: Media To discuss the potential of Moldovan private media to improve Quality of Government, I will begin this chapter with presenting the main findings of previous research on the relationship between media freedom on the one hand, corruption or QoG on the other. Afterwards, I will present the concept of political parallelism further, as well as four commonly referred to media system models. To be able to discuss the potential role of state subsidies in Moldova, the chapter ends with previous research on the role of state subsidies to correct media market failure and the effects of media ownership concentration.

5.1 Media Freedom and Corruption Despite the purpose of this thesis concerns private medias role to promote Quality of Government in Moldova, more previous research has been conducted on medias role in combatting corruption, therefore I will begin with presenting this relationship. Corruption is one of several practices perceived as low QoG, alongside with clientelism, patronage, nepotism, cronyism, discrimination, and “captured” administrative agencies.71 Mathias A. Färdigh argues recently, “the interest in media freedom among social scientists and economists has increased” and studies have established a robust relationship between media freedom and the level of corruption across countries – the freer the media, the lower the levels of corruption. 72 Except from lower levels of corruption, previous research has also suggested a robust positive relationship between media freedom and democracy and economic development – primarily in countries that have passed the “threshold” of implementing democratic rule. However, there are significant variations in outcomes among countries with equivalent levels of media freedom, according to Färdigh. Färdigh – who will be presented further below – argues that many researchers have managed to draw misleading conclusions about the significance of free media for the level of corruption and that there are tendencies of naïve perceptions of the nature of relationship.73 It is not clear what mechanisms within media freedom lead to lower levels of corruption74 and high levels of media freedom should not be considered a “quick fix”. Instead of an overall

71 Ibid., 169 72 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 30 73 Brunetti and Weder. A free press is bad news for corruption, 1821 74 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 30

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positive effect from free media, Färdigh suggest there is a need for a “big bang condition”; many things must be in place for the free media to have an impact.75 With sufficient resources, media possesses its strongest preventive function against abuse of power in the watchdog function. Färdigh rhetorically asks “what if free media reveals information about misconduct and nothing happens?” and argues this is where the interplay between “accessibility, responsiveness and accountability” becomes important.76 Media’s role in making information available must according to Lindstedt and Naurin be accompanied by the capacity of citizens to act upon the available information and the public’s access to sanctioning mechanisms.77

5.2 Media Freedom and Quality of Government From here, we will shift focus from media’s role in “only” curbing corruption as a symptom, and broaden our perspective to media’s role in dealing with the cause – which is low QoG. Despite there are relatively few empirical studies on the relationship between media freedom and Quality of Government, one piece highly relevant for me is “What’s the use of free media? The role of media in curbing corruption and promoting quality of government” by Mathias A. Färdigh. He asks how to explain the variation in both perceived corruption and quality of government among countries with free media. His dissertation intends to answer the overall question: If, how and under what circumstances media can promote high QoG. Färdigh argues that media requires democracy to operate freely. Free media are assumed to advocate responsiveness and accountability by acting as watchdog. At the same time, democracy requires a free flow of information and a watchdog function independent of the state. At the same time as the media offers possibilities for the government to adapt their policies to the public opinion, it also enables the public to hold the ones in power accountable for their actions.78 Färdigh argues the theory of QoG is “highly relevant for understanding the role of free media”.79 This is because previous research on media freedom has mainly been performed on the input side. Consequently, there is an extensive knowledge of the role of the media for “the elected side” of government, but less knowledge in terms of the media’s importance on the “non-elected side” and the way in which the power is exercised. However,

75 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 29 76 Ibid., 7 77 Lindstedt and Naurin. Transparency is not Enough: Making Transparency Effective in Reducing Corruption, 301 78 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 27 79 Ibid., 12-13

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Färdigh argues that citizens’ form their preferences about how well those in power fulfill their mandate on the output side. The output side involves both citizens’ personal experiences of public services and their interaction with information from the media.80 Färdigh’s thesis derives from three assumptions. The first is that the risk of getting caught could be assumed to be larger where free media are able to provide citizens with impartial and sufficient information. Second, that certain media systems characteristics are more likely to generate higher QoG and that media freedom theoretically enhances government efficiency and responsiveness, as well as strengthening people's trust in those who govern them. Third, Färdigh notes, free media is often associated with well-functioning markets and improved investment climate.81 Färdigh argues there is a robust relationship between media freedom and corruption, as well as between media freedom and quality of government – nevertheless, is the relationship curvilinear with a variation depending on the level of democracy. He further suggests a distinction between ”business QoG” and “public service QoG”. Business QoG includes the indicators “corruption”, “law and order” and “quality of bureaucracy”, whereas public service QoG includes “corruption”, “impartiality” and “quality” of public services. According to Färdigh, media freedom has varying importance for quality of government, depending on whether it is studied as something good for investors or as services reaching ordinary citizens.82 There is a strong, positive influence of media freedom on the variation in QoG across countries when conceptualized as “good-for-business”. However, the relationship disappears when one uses the “good-for-public-services” definition.83 Färdigh further suggest what could be one of the keys to the question the large variations in QoG across countries with free media. The role of media freedom varies based on whether the country has a “well” or “newly” established electoral democracy, or “none”. The level of media freedom is crucial for fighting corruption in the well-established democracies. On the other hand, media freedom is less important in the newly established democracies, and “among countries with weak electoral democracy, the level of media freedom has a relatively small impact when it comes to combating corruption”.84 Färdigh found that free media is just one condition that must be fulfilled to make any difference when it comes to quality of government and corruption. Three other basic conditions must also be in place and coexist, in order for the media to play a substantial role

80 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 14 81 Ibid., 27 82 Ibid., 4 83 Ibid., 29 84 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 27

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in the fight against corruption and in promoting quality of government; accessibility, responsiveness, and accountability.85 Accessibility (output) is people’s ability to access the information conveyed to them by free media, responsiveness (input) is the possibility for the government and public administration to know what the people want, and accountability (output) is the people’s right to hold those in power accountable.86

Färdigh controlled the levels of media freedom and media accessibility against five economic and historical determinants of quality of government, and according to his findings, the importance of having both media freedom and media accessibility are so strong that two out of three historical factors completely lose their explanatory power in European countries. Therefore, Färdigh emphasizes the importance of media system characteristics and their relevance for the variation in quality of government across countries. “Accessibility and citizens’ ability to actually obtain the information delivered by the free media, are at least 87 equally important as the media freedom itself”. However, due to atypical cases and variations across countries with media freedom Färdigh argues more research is needed, to establish which aspects of free media promote high quality of government.88

5.3 Political Parallelism: Media and its relationship to the politics Nam and Oh conceptualized a society as a political system with many subsystems within it. The press as one of the subsystems, alongside with opposition parties, labor unions and interest groups. They found that in political systems in which the various actors have freedom of activity, the media operates accordingly. On the other hand, Nam and Oh argue in Communist states, other totalitarian states or one-party states, they cannot find autonomous subsystems actively engaged in the political process. Instead, the subsystems are differentiated “structurally, but not functionally”.89 Färdigh argues that the access to media is determined by the media system, which is determined by specific national characteristics, such as the political system, the relationship between economic and political interests, historical and cultural circumstances as well as the development of civil society.90

85 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 7 86 Ibid., 7 87 Ibid., 32 88 Ibid., 4 89 Nam, Sunwoo and Inwhan Oh. Press Freedom: Function of Subsystem Autonomy, Antithesis of Development, 744 90 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 19

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Weaver et al. concluded that increased economic productivity in developing countries may negatively affect media freedom. They argued in developed countries, efficiency has led to media growth and greater media freedom, but not in developing countries. Instead, media tends to be used to preserve the power of the rulers. According to Weaver et al. freedom from laws fails to qualify as robust, while there is a strong relationship between media freedom and corruption under freedom from political and economic pressures.91 Hallin and Mancini developed a comprehensive conceptual framework in “Comparing Media Systems: three models of Media and Politics”. They are comparing media systems in 18 Western democracies, including Northern European, Southern European and Atlantic countries. It provided a systematic approach for comparative analysis of the relation between the media and the political system. The tool can be used to understand variations between systems located in different cultural, social and/or political contexts. Their framework consists of four dimensions regarding the media market, namely (1) the structure of media markets; (2) the degree and form of political parallelism; (3) the professionalization of journalism and (4) the degree and form of state intervention in the media system. The framework also consists of five dimensions regarding characteristics of the political context, namely (1) the role of the state in society; (2) the majoritarian or consensus character of the political system; (3) the pattern of interest group organization; (4) the distinction between moderate and polarized pluralism; (5) and the development of rational-legal authority in contrast to clientelistic forms of social organization.92 Hallin and Mancini identified three major ideal models of media system, describing how political and economic systems influence the media system. The Polarized Pluralist (Mediterranean), Democratic Corporatist (North/Central Europe), and Liberal (North Atlantic) models.93 The three models were complemented with the post-Communist (Eastern European) model by Terzis in 2008. The latter will be presented closer in the next subchapter. According to Hallin and Mancini, the connections between political systems and media structures can usually not be interpreted as a mechanistic, one-to-one correspondence. Nor do these connections appear from one-way causal relationships. Media systems have their own effects on the political systems. They describe a coevolution process of media and political institutions within particular historical contexts.94

91 Weaver, Buddenbaum and Fair. Press Freedom, Media, and Development 1950-1979: A Study of 134 Nations, 104 92 Hallin and Mancini. Comparing Media Systems: Three Models of Media and Politics, 296 93 Ibid., 296 94 Ibid., 297

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According to Terzis, the Liberal countries attributed a limited role to the state, while in the Corporatist countries the state has taken an ever more important role in the post-war period. The state authority has a much stronger rational legal base in Liberal and Corporatist countries, why the public trust in both political institutions and in public broadcasting, is relatively high in these countries. In the Eastern European and Mediterranean models the state remained to play a much more dominant role, to the extent that several researchers speak about ‘state paternalism’.95 In countries with weaker markets and later capitalist development – such as Eastern European and Mediterranean – the deregulation of media markets developed unregulated, due to alliances between politics and the private sector, politicization of regulatory authorities and the lack of liberal institutions in general.96

5.3.1 Northern European, Democratic Corporatist model It is logical to begin with presenting the Democratic Corporatist model, since the Northern European countries provides state subsidies to private media. Therefore, I will primarily compare Moldova to this model. It has further been proposed the Northern European model is a realistic future path of the Eastern European post-Communist model where Moldova is included. We will come back to this discussion in next chapter on . The Democratic Corporatist model includes Northern European countries with a long democratic tradition; Sweden, Norway, Denmark, Finland, Austria, , Belgium, Netherlands and .97 Hallin and Mancini points out three “coexistences” between media and politics, which they regard as distinctive to the Democratic Corporatist countries.98 For this thesis and the discussion on state subsidies, I argue the first and third coexistence are the most relevant to closely observe. (1) The high degree of political parallelism between the development of mass media and party political development. (2) The high degree of journalistic professionalization. (3) The relations between the state and the media, which on one hand has meant early introduction of press freedom from the state, but on the other meant acceptance of state involvement in the media. In Democratic Corporatist countries, there is a general trust in politics and political bodies – the state is not seen as an enemy of the media.99 What is typical is also state subsidies to the press, existing in almost all countries. The subsidies have mainly contributed to maintain pluralism on the market. Hallin and Mancini

95 Terzis. European Media Governance, 449 96 Ibid., 446 97 Hallin and Mancini. Comparing Media Systems: Three Models of Media and Politics, 143 98 Ibid., 144 99 Ibid., 144

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argues the state support is normally given according to neutral rules, based on market economy principles, and does not strongly affect the basic market mechanisms. Further, the state subsidies are not perceived to have any impact on journalism practice.100

5.3.2 The North Atlantic, Liberal Model In Liberal countries, the role of the state is relatively limited, and the role of the market and private sector relatively large. The Liberal, North Atlantic model is characterized by countries with a long tradition of democracy, strong press freedom and individualism; , USA, Canada and Ireland. Liberal ideology developed strongly — specifically in the media sector, with deep-rooted liberal theory of the press. Media are not strongly linked to the government and politics, but are instead governed by commercial interests. The journalistic professionalism is relatively strong.101

5.3.3 The Mediterranean, Polarized Pluralist Model The model is characterized by countries that have democratized relatively late, a strong government intervention in the economy and an elite-oriented press. The public service companies tend to follow national governments and parliamentary systems and journalism is less professional. The links between political actors and journalists are strong, while the legal system is relatively weak.102

5.3.4 The Eastern European, post-Communist Model Post-Communist countries are characterized by late democratization and incomplete or complex modernization, combined with strong control from the state, widespread clientelism and state paternalism. Broadcast media struggles to keep political and economic independence, but still work as a political actor promoting the ruling power.103

5.4 State subsidies to correct media market failure Paul C. Murschetz, editor of “State Aid for Newspapers” argues state support to newspapers is not only legitimized on pure economic ground, but “concentration is so pervasive in the industry that press diversity has become a major issue of concern for regulators across the

100 Terzis. European Media Governance, 9 101 Hallin and Mancini. Comparing Media Systems: Three Models of Media and Politics, 198 102 Hallin and Mancini. Comparing Media Systems: Three Models of Media and Politics, 89 103 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 20

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globe”.104 The book explores theoretical arguments for state aid and increased the knowledge on current issues of subsidy governance in various empirical contexts.105 According to Murschetz, there is a general reluctance among governments emphasizing the free market to accept that liberal market economy as such could give rise to serious problems in the functions of the press in a democratic society. Murschetz notes there is a “policy dilemma to ignore the built-in impetus of the press market toward failure”.106 Subsidies are given to many different industries. Murschetz argues some arguments which are in favor of subsidies to the media are the same as those of industrial subsidies. However, there are significant differences. The most important being political dimension of media and the ability to shape opinion for political gain – which “go beyond usual arguments about asset specificity, economic efficiency or political ideology”.107 Murschetz notes the journalistic quality has come under threat as technologies and changing social trends, sped up by global economic turmoil, have disrupted business models and created news ecosystems.108 Consequently, the sector is undergoing a structural change both in terms of organizational processes and regarding the type of products and services produced, delivered and consumed.109 Murschetz argues “the Fourth Estate should be neither dependent on the whims of the market nor subject to shifting political landscapes. Proposals for press subsidies considered radical several years ago are gradually being mainstreamed”.110 Several scholars have recently argued that the information produced by journalism should be treated as a public good.111 According to Trogen, “it is virtually impossible to allocate resources to a public good through market mechanisms”,112 because they are non- rivalrous and non-excludable. Murschetz notes journalism is a public good in both an “economic sense — especially in its digital form — and in a social desirability sense”. In its ideal form, it creates positive externalities by serving as a watchdog, covering social issues, and providing a forum for public debates.113 The advertising revenue model is becoming unsustainable as audiences and advertisers migrate to the Internet. “Even though digital advertising revenues grow, they do

104 Murschetz. State aid for newspapers – Theories, Cases, Actions, 382 105 Ibid., 375 106 Ibid., 379 107 Ibid., 382 108 Ibid., 382 109 Murschetz. State aid for newspapers – Theories, Cases, Actions, 375 110 Ibid., 368 111 Hamilton 2006, 8–9; Picard et al. 2009, 1–9; McChesney and Nichols 2010, 101–103; Starr 2011, 31 112 Trogen. In Robbins. Handbook of Public Sector Economics, 169 113 Murschetz. State aid for newspapers – Theories, Cases, Actions, 364

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not come close to offsetting losses with their paper-based counterparts”. Thus, ad revenue- dependent models appear to be “irreparably broken”, and Murschetz argue no other commercial models come close to replacing it, including pay-wall subscriptions.114 According to Murschetz, there are theoretical disagreements between the state- interventionist versus self-regulated, free-market paradigm.115 Besides the advantages of market-driven media, we have witnessed its drawbacks. There is always a risk of concentration and monopolization; markets prefer mainstreaming content and audiences, and citizens are treated as consumers, based on their purchasing will. These aspects “detract from any facades of freedom of choice and unhindered competition”.116 State-interventionists argue for a more “deliberate, active and content-oriented media policy” – with strong empirical evidence, according to Murschetz. Competition may lead to the opposite; economic concentration reducing independent titles and decreasing the pluralism necessary to maintain a vital democracy. Monopolist tendencies in the media 117 markets suggest finding models with a government safeguarding and promoting diversity. Robert Picard introduced the concept of positive and negative freedom. While negative press freedom refers to the absence of legal and/or political prohibitions and censorship, positive press freedom relates to the effective capacity of individuals to have their opinions circulated. According to Picard efforts to promote positive press freedom could be “economic regulation, the right to reply, access to media, freedom of information, and state intervention in media economics”.118 However, Murschetz mention critical voices has noted selective subsidies could be allocated to pro-government papers and state control of the media may also take more subtle forms. “Close cooperation between the state and the media in areas of ownership, finance, or employment may be the seeding ground for the authorities’ control over information”.119 Critics also point to failings of subsidy schemes; in rationale and design, state subsidies may drive market inefficient behavior of recipients.120 “Things do not receive subsidies, people do. Behind every subsidy there is someone reaping the benefits. That is the crux of the political economy of subsidization”, Wolfson noted. If given out to the wrong beneficiaries, subsidies to the media may perpetuate the same actors in power, undermining democratic legitimacy and perceptions of accountability. Public

114 Murschetz. State aid for newspapers – Theories, Cases, Actions, 364 115 Ibid., 377 116 Terzis. European Media Governance, 447 117 Murschetz. State aid for newspapers – Theories, Cases, Actions, 377 118 Picard. The press and the decline of democracy. The democratic socialist response in public policy, 43 119 Murschetz. State aid for newspapers – Theories, Cases, Actions, 377 120 Ibid., 380

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subsidies might even “create bottom-line profits for media conglomerates which are profitable in some business activities but loss-making in others”.121 Murschetz argue news media are important in promoting democratic governance, stipulated that they can act as effective watchdogs and agenda setters. However, “the devil is in the details”. While governments in many countries subsidize their newspapers with the intention to guaranteeing high journalistic quality, it depends on which types of subsidies are 122 used in what type of policy culture. Allowing for subsidies should help foster necessary structural conditions. A growing body of academic research demonstrates that government-subsidized private media are no less critical of government than non-subsidized, private media123 and do not create a “slippery slope toward totalitarianism”. It has also been suggested that media remain neutral in their viewpoint despite press subsidies, neither does the system disproportionately benefit 124 specific media outlets. In their study of public media in 14 countries, Benson and Powers found that funding is established for multiyear periods, limiting the governments possibilities to approve or disapprove content before funding. They further mention public agencies and administrative boards are to serve as a buffer between the broadcasters and the government in power.125

5.5 Media Capture “Since non-coercive media capture is a widespread phenomenon, scholars of development and political economy should ask themselves what its determinants and consequences are”,

Tim Besley and Andrea Prat argues.126 They provide a theoretical framework to discuss how and when government captures media and what effect this has on political outcomes. They argue countries making the transition from autocracy to democratic forms of government, tend to uphold media freedom in equally strong terms. However, they rhetorically ask “is formal media freedom enough to guarantee the free press?” They describe the case of Russia, whereas despite the lack of “old-fashioned preemptive censorship, the Russian media are gravely hindered in other ways”.127 All national broadcasters are owned by state-

121 Wolfson. Towards a theory of subsidization, 16 122 Murschetz. State aid for newspapers – Theories, Cases, Actions, 383 123 Benson and Powers. Public Media and Political Independence: Lessons for the Future of Journalism from Around the World, 124 Nielsen and Linnebank. Public Support for the Media: A six-country overview of direct and indirect subsidies, 12 125 Benson and Powers. Public Media and Political Independence: Lessons for the Future of Journalism from Around the World, 5 126 Besley and Prat. Handcuffs for the Grabbing Hand? Media Capture and Government Accountability, 720 127 Freedom House, 2001

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controlled companies and most national newspapers are in the “hands of a small number of wealthy individuals vulnerable to political pressure”.128 According to Besley and Prat, media pluralism provides effective protection against capture, because “every time a government pays an outlet to suppress its information, the commercial revenue of the other outlets goes up because they face less competition on the commercial side”.129 Further, they argue independent ownership reduces capture and that media capture affects political outcomes since media capture reduces political turnover.130 This thesis is limited to state subsidies to private media – not state ownership. However, a few findings regarding state ownership of media are relevant to mention. That is because the findings relate to the situation in Moldova, where on the one hand, the state itself is not owning media, nevertheless, the main actor on the media market is a politician. Even though politicians owning media outlets is not equal to state ownership, one could assume this affect the overall situation in a way it would not do if the owners were “just” businessmen or wealthy families. Djankov et al.131 demonstrate that state ownership of the media is related to various measures of poor government performance. Besley and Prat note high state ownership is associated with higher levels of corruption and 7.21 years increased tenure in office for the chief executive (typically President or Prime Minister). Further, in countries with concentrated media ownership turnover is lower and corruption higher.132

128 Besley and Prat. Handcuffs for the Grabbing Hand? Media Capture and Government Accountability, 720 129 Ibid., 721 130 Ibid., 721 131 Simeon Djankov et al. Who Owns The Media? 373 132 Besley and Prat. Handcuffs for the Grabbing Hand? Media Capture and Government Accountability, 13

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6. Eastern Europe: the current state Before focusing on Moldova in this case study, the current state of democracy, government and media in the broader post-Communist region in Eastern Europe will be presented briefly.

6.1 Democracy in East European post-Communist states Since 1995, Freedom House’s research project on democracy, “Nations in Transit”, has been tracking the progress and regression of democracy in 29 formerly communist countries from Central Europe to Central Asia.133 The region has had more declines than improvements since 2007. Not a single sub region – Central and Eastern Europe, the Balkans, and Eurasia – has improved overall since 2011. These results argue trends have now merged into fundamental threats to the regional order that bode ill for the future.134 The average Democracy Score of the 29 nations has declined every year since 2004 – 12 years in a row, weighted for population.135 However, Freedom House argues there are small reasons for hope in civil society–driven efforts to uproot a corrupt system.136

6.2 Media in East European Post-Communist states The three media system models distinguished by Hallin and Mancini alongside with the fourth model about East European Post-Communist states was presented in the subchapter about political parallelism. Now we will return to the latter. Hallin and Mancini believe that “the (Northern European) model will have particularly strong relevance for the analysis of Eastern and Central Europe”.137 At the same time, they suspect that scholars in Eastern Europe will find much relevant in their analysis of Southern Europe model, including the clientelism, the role of the state, the role of the media as a political instrument, limited media circulation and professional weaknesses.138 139 Karol Jakubowicz interpret it as “had the (Eastern European) countries been able to develop and consolidate their democracies, they would now have a Democratic Corporatist (Northern European) media system, instead of the “Mediterranean” one”. He further asks if “this should be taken as prediction that with successful consolidation of democracy, they will

133 Freedom House. Nations in Transit 2016 134 Ibid. 135 Ibid. 136 Transparency International Moldova. Corruption Perception Index 2017 137 Hallin and Mancini. Comparing Media Systems: Three Models of Media and Politics, 305 138 Wyka. Berlusconization of the Mass Media in East Central Europe - The New Danger of Italianization, 1 139 Jakubowicz. In Terzis. European Media Governance, 311

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move in that direction?” Jakubowicz notes “advancement” into the Democratic Corporatist model is more of a realistic proposition, but can hardly be expected any time soon.140 Why then, can it not be expected soon? It becomes clear by reading the description by Wyka. She argues despite the media broke from political control in the former communist bloc, “the present panorama of the media is quite far from optimistic.” 141 Media have become a target of abuses and collusion between political and economic interests. According to Wyka, the politicization is a result of immature political elites’ tendency inherited from the past to control the media. The parties and individuals entering office tend to seek dominance in the media and according to Wyka the politicization “is an evidence of inadequately developed political culture and political awareness among the societies and media staff”. Instead of keeping an eye on the political establishment – thus becoming democracy building institutions – the media are tools of the elite few to spread the message of those owning the media outlets, weakening the quality of democracy. Unfortunately, Wyka notes, nothing suggests the situation will change soon.142 As noted in the previous subchapter on market failure, in countries with weaker markets and later capitalist development the media markets often developed in an unregulated way, because of alliances between politics and the private sector, politicization of regulatory authorities and lack of liberal institutions.143 This is relevant to the study of media markets in post-Communist countries, since they combine a late development of capitalism and weak markets, as can be noted in the graph below. Note specifically the decline in GDP growth in Moldova, which is among the strongest declines in the region.

140 Jakubowicz. In Terzis. European Media Governance, 311 141 Wyka. Berlusconization of the Mass Media in East Central Europe - The New Danger of Italianization, 1 142 Ibid., 4 143 Terzis. European Media Governance, 446

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Figure 2: Source: Freedom House According to Wyka, a main feature of the Communist system in East Europe was a complete centralization of the media organs, where Communist leaders could approve the content, and send it out to the entirely dominated media. The management positions were appointed by the political leaders.144 The reforms that followed the ouster of Soviet, took after the “dual media model” in Western Europe, based on two kinds of media; public and commercial. The state monopoly disappeared and the state-run broadcasters were turned into public service.145 Wyka argues the first media reform did contribute to a political democratization in Eastern Europe, however, “a discrepancy emerged between the declared objectives of the laws and the actual achievements during the implementation”.146

144 Wyka. Berlusconization of the Mass Media in East Central Europe - The New Danger of Italianization. 1 145 Ibid. 146 Ibid.

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7. Methods of collecting and analyzing data

7.1 Selection of Moldova as the case to be studied Initially, the plan was to make a comparative study of two “country groups” of Eastern European countries (Moldova included) on the one hand, and Northern European countries on the other. However, after having explored more of the previous research on the fields, and taking to account the perceived extensiveness of material that would be needed, as well as time and scope limitations for a master thesis, I decided to conduct a single-case study of Moldova. However, I kept the comparative aspects to some extent, by comparing Moldova with the Northern European model where state subsidies are common. A typical case is often not the richest in information. Whether Moldova is to be considered a typical or an atypical case can be discussed, it depends on the perspective, but it is undoubtedly an extraordinary case worth studying related to the theory of Quality of Government emphasizing how the power is exercised. Several sources suggested by Leo Marx,147 could be applied to the choice of having Republic of Moldova as the case of this study. Marx writes about “structure and functions”, when you point to a structure – in this case state subsidies to the media – and the reasons why there are different types and the implications of the differences. Inspired by Marx, I would also see Moldova as an “empirical example that trigger amazement, like deviant cases and atypical events” full of “intellectual puzzles and contradictions”. As well is it a country with “gaps between the official versions of reality and the facts on the ground”.148 Not only should the Quality of Government in Moldova be a matter of concern for the Moldovan population, but also researchers and international donors. The “bank theft of the billion dollars” in 2014 and the role of Moldovan courts in the so called “Russian Laundromat”, proves why the quality of a small country’s institutions can have consequences reaching far beyond the national borders. While neighboring and and predominantly Central East European countries were subject to previous research on related areas, Moldova largely remained out of the limelight. And while financing is probably one of the most acute problems for Moldovan media, there are very few studies highlighting its distorted media and advertising markets.

147 Marx. Technology: The Emergence of a Hazardous Concept, 113 148 Ibid. 113

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7.2 Collection of data The research questions will be answered using both primary and secondary data; primary data collected through qualitative semi-structured interviews; secondary data through existing reports analyzing Moldova. Qualitative interviewing responds “to the direction in which interviewees take the interview and adjust the emphases in the research as a result of significant issues that emerge in the course of the interviews”, as Bryman puts it. This suit the rather explorative purpose of this thesis. In qualitative research, the researcher wants rich answers and the interviewee may be interviewed on more than one occasion.149 A key feature of the semi-structured interview is in the partial pre-planning of the questions. An interview guide was formulated with questions and topics to be covered during the interviews, but was not intended to be followed strictly. The emphasis was put on what the interviewees perceived as important in explaining and understanding events and patterns.150

7.3 Sample and selection of interviewees For selecting interviewees, I used a combination of “purposive sampling” and “theoretical sampling”. The first is strategic, attempting to establish a good correspondence between research questions and sampling. According to Bryman, the researcher samples based on wanting to interview people who are relevant to the research questions. By using theoretical reflection on the data, the researcher is guided to whether more data are needed.151 I reached out to individuals with extensive knowledge and experience of working with or monitoring media freedom related issues and particularly related to governance in Moldova. Either by contacting them personally, or by contacting for example an organization which then suggested the representative being the most suitable for the interview, for example based on the level of fluency in English. I wanted to interview individuals being relatively independent, with an emphasis on the unspecified word “relatively” since it is important to bear in mind all representatives of organizations and media outlets that were interviewed still represent their agendas. When contacting the potential interviewees, I made an effort to personalize each inquiry being sent out, while remaining submissive towards the fact that many of the individuals occupied higher positions and probably would not have too much time left over

149 Bryman. Social research methods, 437 150 Ibid., 438 151 Ibid., 459

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for a student in another country. I worked by the principle of rather sending out fewer inquiries with well-chosen targets and with a higher probability of acceptance, than a higher number of unpersonalized inquires that risked being disregarded in the receiver’s inboxes. Getting access to organizations can be difficult and therefore it is necessary to allow a considerable amount of time to this aspect. Despite one of the research questions were indirectly related to the dependence on international donors, I decided to exclude representatives of bilateral diplomatic missions to Moldova from the sample, to minimize the amount of arguments influenced by the complicated geopolitical situation, but I decided to still include multilateral actors with a monitoring function such as intergovernmental or international organizations. There are still interviews I did not get access to. As an example, the Organization for Security and Co-operation in Europe (OSCE) can be mentioned. A proposal and a reminder was sent both to the OSCE Representative on Media Freedom in Vienna, as well as to the OSCE Mission to Moldova, unfortunately without success. Another example is the Moldovan independent newspaper Ziarul de Garda that have managed to survive economically, even though their investigations results in hundreds of file suits each year. It should further be noted again that the sample of interviewees for this thesis represents the Republic of Moldova, but neither the autonomous breakaway region Transnistria nor the autonomous territorial unit of Gagauzia, since the situation for the media differs in terms of state ownership and levels of interference. The size of sample that can support convincing conclusions is likely to vary from situation to situation in theoretical sampling terms.152 Totally, six interviews were conducted, each taking between one to one and a half hour.

7.4 Internal and External Validity Some of the individuals interviewed had multi-faceted backgrounds with experience from several of the institutions and organizations I had primarily planned for reaching out to. This, combined with the extensiveness of each interview, I argue, are arguments for that a lower number of conducted interviews could still be accepted, from an internal validity point of view. Further, I do from the one hand, lack the perspectives of representatives of the legislative and the judiciary. I did search for potential interviewees in these fields to achieve a sort of source triangulation and increase the internal validity, without success. On the other

152 Bryman. Social research methods, 462

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hand, as will be clear for the reader of this thesis, what I would obtain from such interviews with representatives of the legislative or the highly-politicized judiciary of Moldova remains uncertain. Thus, I argue, relatively independent individuals with extensive knowledge about not only the situation of the media, but also the judicial and legislative processes, is adequate and to some extent even to prefer with regard to the chosen topic. With an external validity point of view, I cannot generalize the results of this case study of Moldova with certainty due to complicating geopolitical, historical and economic factors. However, it could be generalized theoretically to some extent to other primarily transitional countries in East and South Europe or states plagued by high-level corruption, clientelism and patronage. Also to countries with late democratization, as well as countries with weaker markets and later capitalist development.

7.5 Reliability From a reliability point of view, I argue one strength is the combination of primary and secondary data collected through different methods; both qualitative and quantitative data conducted through both case studies and cross-national comparisons. Primary data was collected from sources perceived as reliable and well-renowned. In the collection of primary data, I have strived to work as transparent as possible, with all interview transcripts available. The country experts took both the roles as informants and respondents. Informants in that they recognize and inform about the actual situation in the fields. Respondents in that they were encouraged to also provide their personal views based on their knowledge and experiences. On the one hand, the latter are more difficult to confirm or draw conclusions of, on the other hand, those I perceived as legitimate and adequate, can provide an understanding and predictions one cannot achieve solely out of statistics and quantitative analysis. Recording and transcribing the interviews is important for the detailed analysis in qualitative research.153 The interviewees got to read through their transcripts and were offered the possibility to reformulate, add or take away parts. Ethically, I found it important to offer the interviewees this possibility, since they were not intended to be anonymous. This is also to be considered an important step for improving the reliability of the interviews.

153 Ibid., 443

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7.6 Interview guide To get an appreciation of what the interviewees sees as significant and important in relation to my research questions, the operationalized questions is using a language that is comprehensible to the people being interviewed. The interview guide I argue contains a mixture of different kinds of questions, including both Kvale’s types of questions (introducing, follow-up, probing, specifying, direct, indirect, structuring, silence and interpreting questions)154 as well as questions related to the different states of the interview, inspired by the questions types distinguished by Charmaz, namely 1) initial, 2) intermediate and 3) ending questions.155 It is important not to ask leading questions. However, since I aimed at getting an understanding of their views on both the sustainability of independent media depend on international donors, as well as what their views on state subsidies to the Moldovan media, I had to ask rather explicit questions that could be interpreted as being leading. It could be interpreted as I suggest being dependent on international donors is financially unsustainable or that state subsidies could be a “solution”. Because of this, I choose to ask these questions towards the end of the interview, not to influence the other answers. The interview guide can be found in appendix 2.

7.7 Experiences from the field The interviews were conducted in English, which is not the native language for neither the researcher nor the interviewees. However, it was the best option available. The difficulties could have been eluded by making the interviews in written form, which would also have been fruitful in the sense that interviewees could provide more thought through answers. Interviews in written form would, however, take up more time for the interviewees and uncertainties would arise regarding the expected length of answers on the openly formulated questions. It would also limit the possibilities to follow up with further questions. Therefore, to increase the reliability, the difficulties were compensated for by offering the possibility to continue think about the topic even after the interview was finished and come back in case other conclusions were made. Three of the interviewees explicitly said they will think about it further, partly because they found it difficult imagining a system that never existed in the country, which is fair enough.

154 Bryman. Social research methods, 446 155 Ibid., 448

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In my inquiry, I described the background and its purpose emphasizing the system of state subsidies. The interviewees were not expected to prepare themselves in any specific ways before the interviews. However, half way through the interviews, I started to briefly prepare the interviewees to think about the topic already before the interview. This is something I would have done from the beginning if I had the possibility to redo this thesis. To make sure that I was familiar with the setting in which the interviewee engages, I started with letting them introduce themselves, their background and briefly how they ended up in the position they are currently occupying. It was to be used for recording a “facesheet” useful for contextualizing people’s answers.156 This was also a way to initially make the interviewees more comfortable.

7.8 Counterfactual analysis It could be argued that the very purpose of this thesis includes an epistemological problem, since it intends to study something that does not exist – state subsidies to private Moldovan media outlets. However, what will be done is a counterfactual and theoretical analysis, based on previous research, as well as primary and secondary data. According to Tetlock and Belkin, counterfactual reasoning is a prerequisite for learning from history. In their book covering the roles of counterfactual arguments in the study of world politics, they rhetorically ask “Without counterfactual reasoning, how could we know whether state intervention accelerated growth in country x, whether deterrence prevented an attack on country y, or whether the courage of a young kind saved country z from sliding back into dictatorship?” They further argue a wide range of politically consequential arguments qualify as counterfactual.157 One of the proponents of counterfactuals are Richard Ned Lebow. He argues theories in international relations tend to be systematic or structural, relying on sets of conditions or processes to explain and predict outcomes. These types of theories he argues are notoriously unsuccessful in explaining the variances in even the cases where they claim to be the most applicable.158 He exemplifies with that even if all the underlying causes for war are present, no war will occur in the absence of an appropriate precipitant, and the case will be taken as disconfirming. The results out of his case studies of the origins for the First World War and

156 Bryman. Social research methods, 446 157 Tetlock and Belkin. Counterfactual Thought Experiments in World Politics: Logical, Methodological and Psychological Perspectives, 4 158 Lebow. Forbidden fruit: Counterfactuals and International Relations, 260

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the end of the Cold War, implies that that many major international developments are nonlinear in nature, why one must search for multiple causes and the synergistic ways in which they interact.159 According to Lebow, “variation across time, due to changing conditions and human reflection, the openness of social systems and the complexity of the interaction among stipulated causes” make the likelihood of predictive theory extraordinarily low.160 To make more meaningful statements about transformations and link events to outcomes, one needs take into account nonsystematic factors – develop theories about precipitants, not only the underlying causes.161 He argues for recognizing that many theories in the social world is solely a starting point for working through a policy problem or make predictions. Counterfactual priming and case studies have the potential to make us aware of the extent to which our theories build on and reinforce our tendency to see history as a linear progression where deviation is perceived as unlikely. Thus, Lebow argue counterfactuals make us more receptive to complex, nonlinear models by recognizing that the outcomes out of open systems are sensitive to “chance, agency and confluence”.162

7.9 Thematic analysis of the qualitative data After the interviews were transcribed, I divided the material in two broader thematic subchapters related to the research questions, namely 1) Political parallelism and 2) Economic Environment. To code the data collected, which is interpreting and theorizing it in relation to the theories and previous research, I began with reading through my set of transcripts and noted things that stroked my as interesting or important – that either confirmed, was contradicted to or added aspects to the findings of the previous research. I searched for similarities and differences and after repeated readings, the reflections gradually became more thought through.163 I began to generate theoretical ideas and tried to outline connections between concepts, categories and typologies to figure out how they relate to the existing literature.164 When searching for themes during thematic analysis, it is recommended to look for repetitions, typologies or categories, metaphors and analogies, transitions, similarities and differences, linguistic connectors and theory-related material.165

159 Lebow. Forbidden fruit: Counterfactuals and International Relations, 263 160 Lebow. Forbidden fruit: Counterfactuals and International Relations, 265 161 Lebow. Forbidden fruit: Counterfactuals and International Relations, 264 162 Lebow. Forbidden fruit: Counterfactuals and International Relations, 267 163 Ibid., 550 164 Ibid., 552 165 Ibid., 555

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According to Bryman, problems could arise while coding. It could be pulling pieces of the text out of its context, thus losing the social setting. It could also be the fragmentation of data, meaning that the narrative flow of what people say is lost.166

7.10 Operationalization of explanatory theoretical model

Figure 3: See a theoretical description of the model in the “Theories” chapter.

When examining the case of Moldova from the point of view of the “Liberal theory of the press”, which I argue limits it scope to the input side of the media system, I’ll rely primarily on existing secondary data and present relevant constitutional rights and prohibitions, as well as relevant media market aspects, such as whether there is equal access to a free market. When collecting primary data through semi-structured qualitative interviews, the emphasis will be on the output side of the media system and media’s role in increasing Quality of Government. The social responsibility theory of the press argues for state

166 Ibid., 554

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intervention with its notion of the difference between negative and positive media freedom. I translate “positive media freedom” to equality on the “output side” of the media system. When using the QoG theory for examining the government, one stresses the quality of public goods, the rule of law and the effectiveness of government agencies. Translated to the media system, I will similarly treat journalism as a public good, and stress the compliance with rule of law relevant to the research area and primarily the effectiveness of media regulatory bodies, but also medias’ capacity to hold agencies accountable when it comes to implementing public policies, as one way to improve the Quality of Government.

7.11 Experiences from coding and analyzing The open-ended, broader questions in my interview guide, I noted, enabled the interviewees to provide me with very rich and comprehensive answers. These answers at times became overwhelmingly complex and long, thus very difficult to code. At some occasions during the coding and analyzing phase, I found it very hard to break the interviewees answers into shorter pieces, since they were told in a specific context, in a certain logical sequence. If I took out or rewrote one part of the quote, say for example the first half, I feared the second half would lose its social setting or narrative flow. Likewise, when most of the answer would suit best to be analyzed in one thematic subchapter, specific sentences within the answer would eventually suit better in another – however, if split in two, I felt it would lose its meaning in both sections, since the broader picture painted by the interviewee would be lost. If I look back at the work with this thesis, that would perhaps be the toughest and most time-consuming lesson learned. Bryman guided me in this process, by reminding me one cannot simply say “this is what my subjects said – isn’t it incredibly interesting”. According to Bryman, many researchers are wary about this – however, they worry that in the process of interpretation and theorizing, they may fail to do justice to what is said. While this is a risk, the fact is the findings acquire significance in our intellectual community only when the interpreted and theorized data is reflected upon. Bryman forced me to dare, as he noted, “you are not there as a mere mouthpiece”.167

167 Bryman. Social research methods, 554

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Case study of Moldova

Initially, this case study will take its point of departure in the secondary data on Moldova. Not only will the reports and studies set the scene and form a base of understanding, from which the interviewees answers will derive. They will also contribute to increased validity and reliability to the interviewees answers. In the second part, primary data will be presented.

“You cannot be in constant war, you have to make the news coverage as well”

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8. Part 1: Secondary data on Moldova The first part is based on secondary data and will be divided into three subsections.

8.1 Setting the geographic, demographic and geopolitical scene Between Ukraine and Romania, as a south-east neighbor to the European Union, the small post-Soviet Republic of Moldova is located, with its capital Chisinau. The republic has a population of 3.55 million168, but the population has been rapidly decreasing the last ten years as citizens leave for primarily the European Union or the Russian Federation. As already noted, this thesis covers the Republic of Moldova, but neither the de-facto autonomous breakaway region Transnistria, nor the autonomous territorial unit of Gagauzia. Moldova has a GDP per capita of EUR 1,673.169 As one of the poorest European nations it has a GDP per capita eleven times lower than Romania.170 The economy is dependent on agriculture and the consumption derives to a high degree from remittances sent by working abroad.171 Moldavian Soviet Socialist Republic was one of the fifteen Soviet republics that existed between 1940 and 1991. A decade after the ouster of the Soviet Union, Moldova was again under Communist rule during eight years from 2001, followed by a change in governance in 2009 to a pro-European coalition. In 2015, Moldova saw the most intense political turmoil and instability since the regime change in 2009, with three different governments during a year.172 In 2016, Republic of Moldova held its first direct presidential election since 1996, which was won by the pro-Russian Socialist Party leader Igor Dodon. His closest rival was pro-European Maia Sandu. While the president is pro-Russian, the incumbent government is a pro-European coalition. Moldova joined the Eastern Partnership in 2009, the European Union’s initiative for governing its relationship with the neighboring post-Soviet states Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. Moldova was initially described as a “success story” and an EU-Moldova Association Agreement came into force 1 July 2016. Nevertheless, the politically, economically and socially unstable Moldova is a serious challenge to the

168 United Nations Statistics Division. January 2016. 169 The World Bank. January 2016. 170 Gribincea. Moldova: Investigating high-level corruption – progress or illusion? 5 171Institute for Development and Social Initiatives “Viitorul”. Calitatea guvernării evaluată prin prisma serviciilor acordate de stat, [The quality of governance evaluated through provided state services], 22 172 Freedom House. Moldova 2016

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European Union because, despite the financial assistance provided to it by the EU, Kamil Całus argues, “the country is a showcase of the failure of the Union’s policies aimed at transforming and stabilizing the former Soviet states in the EU’s neighborhood”.173 In 2016, the Moldovan Christian Orthodox Church was the most trusted institution, trusted by 64 % of the population. It is followed by the mass media, trusted by 50 %. In the bottom, the least trusted institutions are political parties (16 %), judiciary (16,5 %) and police and parliament with 19,8 % each.174

8.2 Quality of Government and Corruption in Moldova After 25 years of independence, Moldova remains unconsolidated. According to Kamil Całus this is because today’s Moldova is still searching for a path to take.175 Całus is a researcher at the Centre for Eastern Studies (OSW), Department for Ukraine, Belarus and Moldova. Some of his recent papers are central for this case study, primarily the study “The unfinished state. 25 years of independent Moldova”, as well as the commentaries “Moldova: from oligarchic pluralism to Plahotniuc’s hegemony” and “A captured state? Moldova’s uncertain prospects for modernization”. Całus argues Moldova risks becoming “a borderland country in permanent social, political and economic malaise”, with the political scene dominated by “self-serving political elites lacking a vision of the country’s development”.176 Corruption is one of the most significant obstacles for Moldova’s economic recovery, along with being the main cause for the deep political and economic crisis in the country since 2013, as well as to the Moldovan people’s disappointment with the political class.177 Combating corruption has been one of the top priorities of all Moldovan Governments since 2009, and is one of the main priorities of the 2014 EU-Moldova Association Agenda, stating Moldovan authorities should guarantee “independence, impartiality, professionalism and efficiency of prosecution service and intensification of the prevention and fight against corruption in all its forms and at all levels, especially against high-level corruption”. 178

173 Całus. The unfinished state – 25 years of independent Moldova, 84 174 Gotisan. Regional overview of findings and recommendations – Gap Asset Analysis of Russian Media language skill set in the Eastern Partnership, 5 175 Całus. The unfinished state – 25 years of independent Moldova, 83 176 Całus. The unfinished state – 25 years of independent Moldova, 83 177 Gribincea. Moldova: Investigating high-level corruption – progress or illusion? 4 178 Gribincea. Moldova: Investigating high-level corruption – progress or illusion? 5

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In 2016, public trust in the justice system was 8 percent, compared to 37 percent in 2008.179 The 2016 Rule of Law Index ranks Moldova on place 77 out of 113 countries, with corruption, civil and criminal justice being the lowest scored domains.180 Moldova have had a negative trend in the Corruption Perception Index since 2012 and was ranked as 123 out of 176 countries in International Corruption Perception Index 2016, scoring 30 on a scale from 0 (highly corrupt) to 100 (very clean). It is a drop of 20 places from two years earlier. The judiciary, political parties and parliament are perceived to be the most corrupt sectors. According to Transparency International, “the link between corruption and state capture has become more visible”. Ineffective checks on government, impunity of government officials regarding misconduct, and government interference in justice are among the main reasons. A legislation package aimed at combating corruption was adopted by the Moldovan Parliament in 2016. According to Transparency International it included laws on asset disclosure by public officials, conflicts of interest, transparency in the decision-making process and one on the National Integrity Commission, as well as national strategies for preventing and fighting corruption, a code of conduct for civil servants, and stricter sanctions for corruption and illicit enrichment.181 Despite these initiatives, Transparency International notes, “most of the new regulations have remained largely ineffective, due to the lack of clear sanctions or limited political will to enforce them.”182 Accordingly, Vladislav Gribincea argues the adequate legislation is not sufficient to ensure that the corruption is effectively prosecuted – proper implementation of the legislation is more important. Kamil Całus argue the reforms of the judicial sector has stagnated, due to political interests blocking legislation and preventing the consolidation of strong institutions. According to him, “there is a clear unwillingness among the political elites to implement necessary reforms”. 183 According to Dumitru Alaiba, two cases are central causes to the political turmoil and instability in Moldova recently. They are also highly relevant to observe, using the lens of the Quality of Government theory emphasizing the way in which power is exercised. “The theft of One Billion Dollars”: Dumitru Alaiba equals the amount to “2.88 trillion USD suddenly disappearing from several EU banks”, to put the theft in perspective. 15 percent of the Moldovan GDP disappeared overnight from one state-owned and two private Moldovan banks in 2014, under the passive watch of regulators at the National

179 Barometer of Public Opinion. October 2016 180 World Justice Project. Rule of Law Index 2016 181 Transparency International Moldova. The State of Corruption: Armenia, Azerbaijan, Georgia, Moldova and Ukraine, 22 182 Ibid., 22 183 Całus. The unfinished state – 25 years of independent Moldova, 83

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Anticorruption Agency and National Bank of Moldova. According to Alaiba, these regulators “had permanent access to information that should have triggered multiple red flags – a mechanism that exists and should have worked”. The Government gave emergency loans to the banks, resulting in the “National Bank reserves decreasing by nearly a third, causing a severe worsening of the national economy and suspension of foreign credit and grants”. Vladimir Filat, former Prime Minister and leader of the Liberal Democratic Party, was sentenced to nine years in prison. After two years, the Government decided 2016 to make the taxpayers pay for the theft over the next 25 years – making the stolen billion a public debt.184 “The Laundromat”: According to Alaiba, Moldova “became known internationally” for 20 billion USD taken from the Russian Federation national budget to EU accounts through one Moldovan bank “with corrupt judges playing a central role by legitimizing the transactions”. It was during the same period as the theft mentioned above. No investigations have been conducted and despite public interest, the authorities have avoided the topic.185 With relevance to the Quality of Government theory and its output emphasis, Alaiba writes;

While the standard excuses coming from state institutions (including imperfections in legislation, insufficient capacity of an institution, lack of access to information) are justified, the fact remains: the institutions did not do what could and should have been done. No one would expect the impossible from the institutions, however the legislation granted them tools they did not use. (…) The explanation is the high-level corruption and state capture, a sense of impunity for specific people involved, which resulted in the political subordination of regulators that failed to act in the public interest. As is the case in other countries ravaged by corruption across the globe, politicians have always pointed to imperfect legislation and lack of institutional capacity to (…) justify status quo.186

According to Całus, Moldova demonstrates characteristics of failing states; with no effective and responsible political class, no efficient political and legal system, no generally acceptable state or idea of nationhood and no stable economy.187 Całus argues not only has Moldova been unable to complete the transformation following the collapse of Soviet Union, it fails to perform many of its basic tasks. According to Całus, the reason for the growing disappointment with the pro-European coalition is despite its pro-reform rhetoric it was not able to structurally “rebuild the state, eradicate the corruption or improve the economy”.188 Further, it lacks control over areas within its territory and struggled with permanent presence of foreign troops despite its neutral status.189

184 Alaiba. Resetting the Moldovan Banking Sector:: What Can Europe Do and Why? 41 185 Ibid., 41 186 Ibid., 41 187 Całus. The unfinished state – 25 years of independent Moldova, 68 188 Ibid., 68 189 Ibid., 68

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According to Freedom House, the year 2017 will be decisive for Moldova. Many of the promised reforms have failed to be implemented so far, the most crucial concerning the sectors of justice, media and banking.190

8.3 Media freedom in the Republic of Moldova

The situation was extremely favorable for media connected to politicians, but it was very unfavorable for the independent media. While the former bloomed, the latter could barely breathe. Journalism working for “flowers” is not, however, good for society.191

Freedom House listed Moldovan media as “partly free” in 2016. In the most recent Press Freedom Index from Reporters Without Borders, the title “Media as weapons” is used to describe Moldova. The republic dropped 4 places from the year before, ending up at 80th place in 2017 of a total of 180 countries. In 2013, Moldova was ranked 55. According to the index, Moldova’s media are diversified, “but extremely polarized like the country itself, with chronic instability and the excessive influence of oligarchs”.192 The monopolized advertising market is dominated by the company “Casa Media Plus”, which belongs to Vladimir Plahotniuc, vice president of the Democratic Party. Plahotniuc is also the main actor at the oligopoly news media market, as the owner of media holding “General Media Group”, consisting of at least seven media outlets.193 Thus, Vladimir Plahotniuc has the largest shares on both the media and advertisement market. According to Victor Gotisan, the main legal framework for the media sector contains of the Press Law (1994), the Law on Advertising (1997), the Law on Access to Information (2000), the Broadcasting Code (2006) and the Law on Freedom of Expression.194 The Media Situation Index (MSI) report on the situation in Moldova 2016 assess seven indicators related to media freedom; (1) legal framework regulating media activity; (2) the political context; (3) the economic environment; (4) the professional environment; (5) quality of journalism; (6) information security; (7) safety of journalists. While the score of the legal framework (1) is corresponding to a situation with serious problems, the experts argues the media legislation is largely sufficient since it covers key

190 Gotişan. Nations In Transit 2017 – Moldova, 3 191 IREX. Media Sustainability Index 2016. The Development of Sustainable Independent Media in Moldova, 10 192 Reporters Without Borders. Press Freedom Index: Moldova 2017 193 Gotişan. Regional overview of findings and recommendations – Gap Asset Analysis of Russian Media language skill set in the Eastern Partnership, 5 194 Ibid., 11

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segments, freedom of expression, access to information and the operation of the Broadcasting Coordination Council etc.195 This can be interpreted as a largely sufficient environment at the “input”-side of the media politics. However, severe problems arise regarding the “output”- side, where I argue that the indicators most relevant for the discussion on state subsidies are (2) the political context and (3) the economic environment. Below follows a brief presentation of the assessments and expert opinions on those three indicators. As noted, the average score for the first indicator, “Legal Framework for Media Activity”, is 28.66 corresponding to a situation with “serious problems”.196 It measures the how sufficient the media legislation is, how it complies with international standards and how often the legislation is correctly applied. While the media legislation is largely sufficient, “no improvements were noted, some legislation is not consistent with international standards, and the legal framework is applied selectively”.197 The score for the second indicator, “Political context”, is 14.00 which indicates an “extremely serious situation”. 198 It measures the extent to which the political situation is favorable to media activity. Main causes are the extensive involvement of politicians in media; the involvement of political forces in the audiovisual regulatory authorities; the ownership of important and influential media outlets by politicians; the actual imposing of a political agenda on media outlets and using the media for political purposes.199 The average score of the third indicator, “Economic Environment” is 18.50, corresponding to “a serious situation”.200 The indicator measures the extent to which the media are economically thus editorially independent. There are dominant positions in the media and advertising markets that create unfair competition, which is accepted by the responsible authorities. Media funded by a political party without editorial independence have the best financial situations. The MSI report recommends among other things ensuring economic independence through “eliminating the reliance of media outlets on opaque sources of funding”.201

195 IREX. Media Sustainability Index 2016. The Development of Sustainable Independent Media in Moldova, 6 196 Ibid., 4 197 Ibid., 29 198 Ibid., 8 199 Ibid., 29 200 Ibid., 12 201 Ibid., 29-30

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9. Part 2: Primary data and analysis The primary data will be presented, interpreted and related to previous research in two thematic subchapters. For a presentation of the interviewees, see appendix 1.

9.1 Thematic subchapter: Political Parallelism The focus of this thematic subchapter, is RQ1 and RQ2; How can the relationship between the Moldovan Media and Politics be described and how does the political parallelism differ from countries providing state subsidies to private media? To discuss the potential of state subsidies to media as a tool to improve Quality of Government in Moldova, we must begin with understanding what role media currently can play in improving the country’s government – before inserting state subsidies as one potential source of revenue.

Today, I think it is even more difficult to be a journalist in Moldova. Even under the modern communist period 2001 – 2008, it was easier to work. Then we had the Communist TV channels and we knew what to expect from them, the rest was more or less okay. It is not like that today. I see it as a real informational war, how they fight and harass each other, the quality of journalism is decreasing instead of increasing, good journalists leave the country, and if they didn't leave the country, they simply left journalism.202

Hallin and Mancini developed a conceptual framework that will be used for analyzing and answering the first two research questions. To compare the relationship between media and the political system, one could use this framework consisting of in total nine dimensions regarding the media market and the political system. All dimensions were presented in the chapter of previous research. The dimensions of the media market most relevant in this discussion on state subsidies to private media as a factor to improve quality of government in Moldova, I argue are “the degree and form of political parallelism” and “the degree and form of state intervention in the media system”. The most central political characteristic to observe in the case of Moldova’s quality of government is “the development of rational-legal authority in contrast to clientelistic forms of social organization”.203 Initially, I will focus on the media market dimensions, and with the help of the interviewed country experts, I will try to describe the degree and form of political parallelism and state intervention in Moldova. The second step will be to compare the political parallelism and state intervention in Moldova, with the political parallelism and state intervention common in countries offering state subsidies to private media. What are the

202 Galai, Daniela. Interviewed 2017-01-30. 203 Hallin and Mancini. Comparing Media Systems: Three Models of Media and Politics, 296

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crucial similarities and differences? Through these two steps, I aim at answering the first two research questions. The question regarding the political parallelism and the relationship between the Moldovan media and politics will primarily be answered using primary data from the semi structured interviews, while the comparison between the Moldovan system and Northern European Corporatist Democratic media system will be answered using a combination of the primary data from the interviews, secondary data as well as previous research. The interviewees were initially asked to describe the relationship between the Moldovan State/Politics and the Moldovan Media, regarding the ownership aspect, the interferences/influences in/over each other and respect for each other’s roles. Cristina Mogildea provides a fruitful explanation of the political parallelism, which is somewhat complicating what previous research by Hallin and Mancini have indicated. Hallin and Mancini argue that there is not a one-way causal relationship between the media and the political system, but a “coevolution between the political systems and media systems within certain historical contexts”.204 However, Cristina Mogildea notes that while the Moldovan politicians have been shaping the media landscape since the ouster of the Soviet Union, the media did not have the same impact on influencing the quality of government and the way power is exercised.

It allowed politicians to gain a full spectrum of leverage to shape the Moldovan media landscape. Unfortunately, rarely did the media succeed in influencing the government. 205

Dumitru Stoianov describes a “highly partisan and politically affiliated media”, serving the owner’s interest rather than the publics. Similarly, Victor Gotisan described a highly- politicized media sector, where most outlets are abused as tools in a “political warfare”.

To put it in one phrase, during the last 25 years, the Moldovan State tried and unfortunately succeeded to control the media sector. Through different mechanisms, from buying media outlets to controlling it via regulatory bodies of imperfect laws.206

Victor Gotisan’s notion of “controlling regulatory bodies with imperfect laws” is of relevance to Quality of Government theory with its emphasis on rule of law and the effectiveness of government agencies responsible for implementing public policies. Cristina Mogildea argues that the chances of influential medias to stay independent on the one hand, are as low as the chances of the independent media to be financially sustainable

204 Hallin and Mancini. Comparing Media Systems: Three Models of Media and Politics, 297 205 Mogildea, Cristina. Interviewed 2017-03-29. 206 Gotisan, Victor. Interviewed 2017-03-12.

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on the other. This corresponds to the findings in the last MSI report on Moldova; “media outlets that serve their owners interests are not affected by poor economic conditions. At the media outlets whose owners are politicians, a clear political influence over content is noted”.207 Cristina Mogildea describes media with the same word used by Victor Gotisan; “tool”. In fact, the role of the media as an instrument of political struggle is one of the features the East European model have in common with the Mediterranean – in contrast to the Northern European Democratic Corporatist model.208

The Moldovan media have always been regarded as a tool by Moldovan governments and politicians and when some outlets wouldn't fit it this description, they automatically were made redundant by various means. Over the two and a half decades since the country gained its independence, several influential media struggled to become independent, although with little success. Independent media struggled to build an audience and sustain their work financially, but with equally poor results. 209

Cristina Mogildea argues that what enabled politicians to gain power over almost the entire media sector is low wages in the industry and the country in general, high production costs, a small and monopolized advertising market, underdeveloped state institutions guaranteeing media freedom and equivocal journalism ethics.

It was with the advent of online media the situation started to change, the market was showing promising signs with the launch of two TV stations in 2010, Jurnal TV and Publika TV. However, the milk turned sour shortly thereafter. Publika TV was purchased by media tycoon and businessman-turned-politician Vlad Plahotniuc and drastically changed its editorial policy to accommodate the owner. (…) All that while small, independent media are harassed with numerous lawsuits and requests by prosecutors to disclose their sources. (…) The entire media sector suffers from this Eastern European syndrome of pluralism without diversity.210

Cristina Mogildea notes that despite the market showed promising signs, the “milk turned sour shortly thereafter”. She notes the failed reforms of the Public Broadcaster due to political interference and the policymakers lacking independence, which is relevant to the Quality of Government theory and the effectiveness of government agencies responsible for implementing public policies. Cristina Mogildea concludes that the Moldovan media sector is suffering from the “Eastern European syndrome of pluralism without diversity”. I link her notion about a constitutionally guaranteed freedom on the one hand, and “pluralism without diversity” on the other, to the input versus output side of media system, in relation to the Quality of

207 IREX. Media Sustainability Index 2016. The Development of Sustainable Independent Media in Moldova, 14 208 Jakubowicz. In Terzis. European Media Governance, 311 209 Mogildea, Cristina. Interviewed 2017-03-29. 210 Mogildea, Cristina. Interviewed 2017-03-29.

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Government theory – as well as to the difference between negative and positive media freedom, according to the Social Responsibility theory of the Press. Cristina Mogildea’s description of the one-way relationship between the state and the media, corresponds to the answer provided by Victoria Dodon. She illustrates the relationship between the Moldovan state and the Moldovan Media as two parts on each side of a river, not being able to build a bridge between them since the wish for dialogue is not mutual, as independent media are considered a threat.

There is a tendency of politicians to control media and unwillingness to keep a dialogue with the representatives of free media. I do believe politicians acknowledge the value of a free press in society, but they don’t want to accept it. One reason might be that they are afraid – of the public opinion, criticism, wrongdoings coming to the surface. In the last years, they have been disturbed about what media has discovered. They try to avoid public exposure and silence journalists, using not the most democratic instruments; by making the access to information more difficult, by not responding to our official requests for information, by amendments to different laws, by hiding their properties through different schemes. (…) Therefore, we came to this point, there is no interest in open data and in making everything transparent. We are perceived as a threat to their shady activities and businesses. We came to the insight we are on different sides of the river, and we don’t have the ability to build bridges. It is very difficult, because our views on how a democracy works are very different.211

According to Victoria Dodon, independent media are perceived as “a threat”. Similarly, Dumitru Stoianov argues that one could say “independent media and authorities in Moldova are in the cold war state with each other”. According to Stoianov, this is the only way to survive for both parts. The independent media continue to receive grants from international donors for acting as a watchdog, while the authorities defend themselves and their interests. Here, we can distinguish what I argue is a crucial difference between Moldova and the Eastern European model on the one hand, and the Northern European Democratic Corporatist model on the other. When Hallin and Mancini defined the Democratic Corporatist model, they pointed out three “coexistences” between media and politics. The high degree of political parallelism, the high degree of journalistic professionalization and the relations between the state and the media – which meant early introduction of press freedom from the state, but also an acceptance of state involvement in the media sector. In the Democratic Corporatist countries, there is a general trust in political bodies, and the state has not been perceived as an enemy of the media. However, in Moldova and arguably many other post- Communist states in Eastern Europe, the trust in politics is low and the state is perceived as an enemy to the media, just like the media is perceived as an enemy of the state. In correspondence to what Victoria Dodon described regarding the unwillingness to achieve transparent institutions, Lilia Carasciuc provides an answer noting the same

211 Dodon, Victoria. Interviewed 2017-02-20.

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reluctance, by mentioning examples when investigative journalists were not given access to public data, instead they received warnings. She argues it is getting worse, with increasing numbers of prosecutions of investigative journalists, something Victoria Dodon also noted. Lilia Carasciuc further notes the relationship differs depending on whether it is an oppositional media outlet or not. I interpret Lilia Carasciucs notion below about investigative journalists scared to silence and the civil society being blackmailed to the perceived compliance with rule of law – one of the dimensions on the output side of the media politics.

Investigative journalists provide names and evidence, then they expect the prosecutors to proceed further. (…) It was one thing when they saw the communists as the enemies of the democracy, but now the government call themselves a pro-European democracy. The oligarch (Plahotniuc) that captured the three branches of power is not a politician. He does not go to public debates with his political opponents. He is not even a businessman, because they create their money out of loyal competition and not by undertaking others’ businesses via corrupt schemes. He created a criminal system that sends a signal that those who collaborate with the system will go on well, while the ones who go against the system are in big trouble. He calls himself pro-European, but in fact uses the pro EU slogan to get support from EU institutions. Now he is trying to modify the election system to not allow clean pro-European forces to come to power. In fact, his intention is to leave citizens and Moldova’s development partners to choose between the corrupt pro-Russian forces and corrupt so called pro-European forces. Neither option satisfies the population with pro-European aspirations. 212

To further grasp the political parallelism, the interviewees were asked how they would say the situation for the Moldovan Media affects Moldova’s overall development. Victor Gotisan concludes that the one who controls media also controls the society, and that the intention of the Moldovan politicians controlling media is far from developing the sector and informing the public in a correct, equidistant and transparent way – rather it is to gain and maintain power – a description familiar to the case of Italy.

The short answer would be, it affects a lot. And in case of Moldova in a worse way. Media is, along with the Orthodox Church, the most trusted institution. Moldovan politicians understood this fact very well, that’s why they practically installed a total control on this sector. The ways to control media are very diverse, and the most knowable is direct control of media outlets. But this is not enough. To assure their control in this sector politicians control even the media regulatory bodies, such as the Broadcasting Council and Supervisory board of public broadcaster. It is not a secret that these bodies are politically controlled. So, the conclusion here is very simple. The one who controls media controls the society. In Moldova at least, this is reality.213

Victor Gotisan is one of those who have talked about a “berlusconization” of Moldovan media market. Surely, the answer provided by him, other interviewees and existing literature noting particularly the dominant position currently obtained by Vladimir Plahotniuc, reminisce of how previous research have described Silvio Berlusconi and the Italian media market. There are indeed similarities between Plahotniuc and Berlusconi; both on the surface free-market and reform-minded politicians and businessmen. However, previous research

212 Carasciuc, Lilia. Interviewed 2017-02-23. 213 Gotisan, Victor. Interviewed 2017-03-12.

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stated Berlusconi was “a product of the old system, a politician with a clientelistic mind- set”,214 launching attacks on the judiciary’s corruption investigations against him – something we’re also witnessing in Moldova. Fukuyama noted, clientelism emerges when democracy arrives before a modern state has consolidated into an autonomous institution with supporting political coalition,215 which has been the case in Moldova since the ouster of Soviet Union. The problem is that most countries do not have a realistic option of sequencing in the right order.216 On the other hand, Fukuyama states, it is possible to imagine civil society demanding public-sector reform and to an end of gross corruption.217 Similarly, according to Freedom House there are only small reasons for hope in Eastern Europe. Civil society–driven efforts to uproot a corrupt system is one of them. Building on these findings, the interviewees were asked what role media can play in holding Moldovan politicians accountable, improving quality of government and preventing corruption. I encouraged them to specifically note whether there is a difference between what role media can play in theory versus in practice. Some interviewees were asked in what order media freedom and qualitative democratic institutions should be achieved – whether one part was needed to be put in place to achieve the other, or if they should develop in parallel. The more positive arguments emphasize the watchdog function in relation to state institutions, demanding accountability and the importance of informing the population. According to Victor Gotisan, several investigative media was launched between 2014 and 2016, succeeding in setting a benchmark for quality journalism in Moldova.

Informing, informing and once again informing people about the corruption cases. Investigative journalism is the only one to experience some growth lately. (…) In Moldova, independent media outlets could be counted on the fingers of two hands. Moldovan politicians understood very well the power of media, and as you can see, if politicians control some media outlets, it’s obvious that these media outlets will not publish or broadcast info which will be in disfavor of them.218

At least informing the population, because it’s being fooled right now. (…) We need alternative channels showing that you can be pro- European and still be honest. We cannot expect the media to prosecute and judge criminals, but the media do their duties by informing and ask for accountability.219

It’s up to independent, investigative and local media to educate their audiences and coin an expectation towards political accountability within the society, but certainly it will not be a short path.220

214 Fukuyama. Political Order and Political Decay 215 Ibid., 202 216 Ibid., 211 217 Ibid., 212 218 Gotisan, Victor. Interviewed 2017-03-12. 219 Carasciuc, Lilia. Interviewed 2017-02-23. 220 Mogildea, Cristina. Interviewed 2017-03-29.

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I am noting that none of the interviewees – neither the more optimistic nor the more pessimistic soon to be presented – explicitly argue that the media should function as an arena for public debate. It could be interpreted that the function is not stated explicitly, because it is taken for granted. It could also be interpreted in relation to the QoG theory, where the population in the country already enjoys media freedom “on the paper”, which this thesis translates to the input side of the media system and the access of power. What is missing in Moldova is perhaps not the possibility to express various ideological opinions, even though some may experience reprisals and harassments etcetera for doing it. The primary function of the independent media become being a watch dog, in a country where both state institutions and media outlets are being captured, thus providing an arena for ideological debates become secondary. Victoria Dodon argues for a constructive dialogue where all parts should be accepting feedback, including the media outlets themselves.

It should go in parallel. When we give feedback it would be great if the institutions involved took our feedback into account. As well as if media outlets do something wrong, like misinforms, it should be able to accept feedback coming from other sectors. In this way, we could grow together. But when a part of the system refuses to be open, change itself and move forward, it is difficult to do that. We don’t need “democratic institutions” first, and then, everything else will come somehow – no, it should come in parallel. It’s a matter of every single factor to try to make everything better, instead of seeing one single big challenge to solve, like democratic institutions.221

I link Victoria Dodons notion of “every single factor”, to what Färdigh described as “big bang conditions”222 with three things required for media to have any impact on QoG; accessibility, responsiveness and accountability.223 Daniela Galai agrees with Victoria Dodon – the processes of achieving a “democratic society and democratic media” should go in parallel. As a matter of institutional construction, previous research has shown that it is not easy to achieve clean, consolidated and independent state institutions. Previous research on government and corruption is also heavily institutional in its approach, rather than individual. Bo Rothstein argues that the reason for the institutional approach of the QoG is basically that it would not be constructive to blame low quality of government on for example geography, culture or historical heritage. It would be like blaming an individual for who his/her parents are. Similarly, Dennis F. Thompson distinguishes individual and institutional corruption, arguing institutional corruption is more damaging to the society than the individual

221 Dodon, Victoria. Interviewed 2017-02-20. 222 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 29 223 Ibid., 7

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corruption, which in advanced societies typically consists of isolated acts of misconduct with effects limited in time and scope.224 While I agree with Rothstein and Thompson on purely logical grounds, examining the case of clientelistic Moldova and reflecting on the interviewees answers really makes me scratch my head doubting over the role of individual factors versus the structural in this case – and in the long run even doubting over the actual potential of state subsidized media in Moldova. Despite structural aspects like laws and reforms adopted, there is a lack of compliance with rule of law and the adopted reforms are not implemented – largely due to decisions of certain influential individuals. To give one example;

Media is supposed to be the watch dog. When corruption cases are revealed, in normal countries, someone is expected to act and take responsibility. A criminal is expected to be taken to prison. Paradoxically, in Moldova, this is not happening. Journalists are making investigations, but government does not care in showing they fight these people. They rather focus on the journalists, harass them or send them to trial. Take for example the investigative newspaper ZDG, they have hundreds of files per year because people who doesn’t like their investigations send them to trial.225 At this moment, I don’t see this role of mass media, not at large scale. We’ve several good media, trying to fight corrupt officials and to report bad, unfair things happening in Moldova, however we have even more corruption at all levels. It’s a very long process, you have to fight a lot and you cannot be in a constant war. You should make news coverage as well. We need reforms, but first we need to get rid of the corrupt people, then we can think about real reforms. As long as the prosecutor office is under the rule of Plahotniuc, you won’t obtain anything.226

As been noted in previous research, once a political bureaucracy is initiated, it is a quickly escalating process. 227 The arguments of Daniela Galai and other interviewees are highly individual-centered; “as long as Plahotniuc is there, there will not be democracy in Moldova”, arguing he won’t implement reforms against himself, since the population have witnessed the governments ineffectiveness and understands the oligarchs will not cut the tree under their feet. She does not know what kind of “big revolution would be needed”, but notes that “even Plahotniuc will come and go”. The reason why Moldova will not be a democracy under the rule of Plahotniuc, she argues is primarily the lack of responsiveness.

It’s clear high officials cannot do anything if they do not have someone's approval. Normally, they could file a lawsuit, now they do anything to protect Plahotniuc and destroy evidence. Our prosecutor office is only taking up cases when the Democratic Party or Liberal Democratic Party members are not involved, because the prosecutor office is under Plahotniuc rule and things related to him doesn’t get there. If the newspaper is writing about his opponents, on the other hand, it will probably lead to something.228

224 Thompson, Two Concepts of Corruption, 3 225 Galai, Daniela. Interviewed 2017-01-30. 226 Galai, Daniela. Interviewed 2017-01-30. 227 Manow. Low-trust and high-trust equilibria in politics: Party Patronage and Political Corruption as Coordination Games, 7 228 Galai, Daniela. Interviewed 2017-01-30.

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Therefore, I would like to pinpoint the word “advanced” used by Thompson. Then, individuals abuse of “less” advanced countries could be just as damaging. Therefore, I argue one can discuss the effectiveness of solely focusing on the need for institutional reforms in these clientelistic states. I relate my rather individual-centered reasoning above to the results of Putnam’s study of southern Italy, namely that the most important source of poor government was the regions history of clientelism – neither structural economic nor political factors.229 A recurrent argument among the interviewees is less optimistic, emphasizing what I link to the output side of the media and the political system – stressing Moldova is not a “true democracy” or a “normal country”. Even though journalists are demanding accountability, there is lack of accessibility, accountability and responsiveness from the ones being investigated, to use the terms of Färdigh. Without all those three put in place free media will not have full impact in promoting Quality of Government and in the case of Moldova this becomes clear. Surely, the lack of all three prerequisites severely affect the potential of independent media in Moldova to increase QoG. This should therefore be taken to account in the discussion on the potential of state subsidies to private media to promote QoG.

Normally, media do play a big role, in a true democracy. But here comes the point, we’re not a true democracy.230

A healthy and let’s say normal media is a very important factor for democratic states. But not in states like Moldova or Ukraine where the press index is either partly free or not free.231

These answers, I relate to what Färdigh believes is the key to the question of variations in Quality of Government across countries with free media; whether the country has a well or newly established electoral democracy, or none at all. He found media freedom is very important for curbing corruption in well-established democracies, less important in newly established democracies and small impact in weak democracies.232 Further, I relate the notions of “true democracies” and “normal countries”, to the “modernization without development”,233 a process I interpret Moldova is sharing with southern Italy – a weak government, lack of opportunities in the capitalist economy making

229 Fukuyama. Political Order and Political Decay, 109 230 Dodon, Victoria. Interviewed 2017-02-20. 231 Gotisan, Victor. Interviewed 2017-03-12. 232 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 27 233 Fukuyama. Political Order and Political Decay, 122

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the state an early object of capture and the clientelism further weakening the state capacity, constraining prospects for economic growth.234 Neither is the “crucial mass” of independent media and journalists big enough to put pressure, according to Victoria Dodon and Lilia Carasciuc. Dodon describes three types of media outlets present in Moldova; the politically engaged media owned by politicians or oligarchs; websites or media outlets retransmitting Russian content, used by the Russian Federation as propaganda tools; and several independent media outlets, most of them registered as NGOs, acting as watchdogs. It is within the third group Victoria Dodon sees herself and the Center for Investigative Journalism.

Besides covering corruption cases, we criticize different initiatives of doubtful nature, promoted by state institutions, the government or the parliament. We try to keep politicians accountable by writing public appeals, covering their wrongdoings, asking for explanations, organizing press clubs to which we invite public officials to discuss problems, and we have public debates. With all these activities, we try to inform the citizens and raise debates on one hand, while on the other, try to explain to our officials what is not good, to have a dialogue, to convince them repealing or revising a bill. But the critical mass is not big enough to put pressure.235

Daniela Galai provides an answer similar to that of Victoria Dodon and Lilia Carasiuc. While Dodon note the critical mass is not big enough to put pressure, Galai who is the Media Literacy Program Coordinator pinpoints “real journalism is done by a small bunch of people” and that only a few sources are credible. Therefore, it is important to increase media literacy in Moldova and develop critical thinking. Victoria Dodon described how she sees the journalists as a part of the civil society. Similarly, Lilia Carasciuc, who represents a civil society organization, described a successful cooperation between the independent media and civil society. The two parts complements each other; while the civil society organization do academic studies and monitoring, the independent media provides the “body with flesh”. She further exemplifies with the public debate on personal data as an excuse for limiting the access to information, organized as a collaboration between Transparency International Moldova and the Centre of Investigative Journalism in February 2017. Further, she suggests civil society should be better at monitoring the criminal cases opened following investigative journalism, to follow up what happened in the schemes after a few years. I argue, that this way of collectively demanding accountability from different angles, could potentially have an impact on the Quality of Government.

234 Fukuyama. Political Order and Political Decay, 204 235 Dodon, Victoria. Interviewed 2017-02-20.

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Transparency International is working a lot with the independent media. They require interviews from us, they invite us to public debates and disseminate our opinions and policy recommendations program and we don't have to spend much money on advertisement. We just finished a study monitoring transparency in the activities of state enterprises where we involved the mass media in the investigations of eventual law infringements committed by the management of these enterprises. They came with five very interesting articles about corruption in state enterprises, in that sense we complement each other. We conduct academic studies, they come with “a body with flesh”. We understand that it is not easy being reporters, and that civil society should get mobilized to support the investigative journalists much more often. When the journalists bring up investigations, criminal cases are often opened, unfortunately nobody monitors the finality of these cases - what happens to those who broke the law two-three years later.236

9.2 Thematic subchapter: The Media Market The focus of this thematic chapter is RQ3; What speaks for and against a system of state subsidies as a correction of the Moldovan media market failure? In order to discuss the potential of state subsidies, we have to begin with the rather descriptive question regarding the prevailing alternatives of revenue streams to finance media in Moldova. Victoria Dodon argues that there are exclusively two ways to exist as a media outlet in Moldova – either on money coming from “politicians or oligarchs” or from international donors – “there is no third kind”. While many would agree with Dodon, a slightly more nuanced description was provided by Victor Gotisan, despite noting that the alternatives are “not so many” since the advertising market is monopolized. Gotisan is mentioning subscriptions, retail sales, classified ads, partnerships with businesses and the “Two Percent law” which entered force in January 2017. The law enables citizens to allocate two percent of their income taxes to any NGO or religious organization they prefer. Critics have been raised regarding the fact several foundations and institutions with connections to politicians and officials accused of corruption are registered as potential beneficiaries.237 Gotisan argues it is small amounts of money, but it would “be a modest and more stable income for these media”. According to Victor Gotisan, in the short term, Moldovan media should explore alternative sources of funding suggested by national and international researchers in the field. In the long term, media outlets should explore possibilities to paid online content. At the same time, Murschetz argues no commercial model, including pay-wall subscriptions, come close to replacing the “irreparably broken” ad revenue-dependent models.238

236 Carasciuc, Lilia. Interviewed 2017-02-23. 237 Civicus. Moldovan Activists decry worsening conditions for civil society and journalists, 2017 238 Murschetz. State aid for newspapers – Theories, Cases, Actions, 364

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According to Victor Gotisan, the law on making media outlets’ owners public, adopted in 2015, revealed the one thing everybody already knew; Moldova has a highly- concentrated media sector in the hands of a couple players. However;

Only knowing the owners of media outlets is not resolving the problem, there is a need of clear mechanisms on financing and most important de-monopolizing the advertising market, which in democratic countries is a mainstream revenue for healthy media.239

Dumitru Stoianov is the International Projects Coordinator at the media NGO RISE Moldova. According to him, the phenomena of media NGO’s appeared in Moldova out of the desire of journalists to be totally independent economically and politically on the one hand, and to earn salaries for the journalism produced on the other.

Such media platforms usually have editorial independence, but depend on international donors. In Moldova, such outlets appear mainly because plenty of funds are available for such activities, provided by international donors and international non-profits. But their impact is also small as they operate mostly online and many of them doesn't have extended, permanent and high-level human resources.240

The independent media in Moldova are highly dependent on international donors to survive economically, thus also keeping its editorial independence. The interviewees all agree on this fact and were asked to give their views regarding its financial sustainability. They were encouraged to think about a hypothetical scenario when donors not any longer priorities to financially support independent media in Moldova and what effect that would have. According to researcher Victor Gotisan, the average income from advertising for independent media outlets is 15 percent of the total income. Therefore, ceased funds from international donors would force most of the independent media to close.

Yes, in the case of independent media this is one of the biggest challenges – if not the biggest. (…) Here comes the issue of advertising market, which is a monopolized one. The main finding of the latest research report I wrote for Baltic Centre for Media Excellence shows that 5 out 7 independent media are dependent on funds from grants, and if those were to cease, they would be forced to close.241

What is clear to me is that if, one day, the financial support ceases, the local free media of a high quality would literally die.242

Victor Gotisan argues that several factors lie at the root of this situation. First, the Moldovan advertising market monopoly is an obstacle to independent media accessing the revenue stream. Second, the lack of training programs and experts to identify new business models for financing media outlets. Third, media institutions lack abilities and capacities to promote

239 Gotisan, Victor. Interviewed 2017-03-12. 240 Stoianov, Dumitru. Interviewed 2017-01-19. 241 Gotisan, Victor. Interviewed 2017-03-12. 242 Dodon, Victoria. Interviewed 2017-02-20.

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their content and brand. Victor Gotisan recently published a report243 in which he interviewed media managers among others. Most managers admitted they are searching for alternative sources of financing, as it is a requirement from the international donors. Despite I am not doubting that the media managers search for alternative finance sources for their own outlet’s survival, the fact that they mention it as a requirement from international donors, make me link it to what critical voices have pointed at regarding state subsidies; that state subsidies in rational and design might drive market inefficient behavior of recipients.244 Victoria Dodon, herself a journalist being a project manager at the same time, notes the difficulties for the often-small teams to achieve capacity enough to receive funding from international donors, when many competent individuals leave the country. While it is challenging, she argues, it is currently the only way to exist.

There’s a lot of funding coming, but the challenge is to manage these projects properly. It’s a very complex process and sometimes it is difficult to find a competent project manager, taking to account the rising tendency of competent individuals leaving the country. Most of our independent media organizations have small teams trying to do everything; journalism, project management, debates, conferences and other events. It takes time, human and financial resources and logistics.245

Daniela Galai stress the importance of thinking strategically when it comes to supporting media. She further emphases the importance of proper management of the financial resources by the media companies themselves. Regardless if the funds are provided by donors or the state – the money will be lost unless it’s managed properly. The campaign “Journalists against corruption”, she argues was good but it had no effect on the levels of corruption.

While some of the actions are sustainable, some of them are not. I can give you another example. There was a network created for professional journalists, while it would probably have worked in the US, it simply did not here. They bought equipment, trained people and then the trained professionals left the country. What will happen with the money donors invested and the professionals that were trained after they leave? The strategic plan wasn’t developed enough, therefore it wasn’t sustainable. Millions were involved, but it simply died. With this in mind, I cannot even say I believe money will be the solution. Not money provided from the state either. What I really think is an important is continue working with the legal framework.246

The dystopia painted by Lilia Carasciuc places the small country’s fragile institutions in a larger context, boiling down to the risk of creating a dangerous “brain drained” hole. She argues the primary reason why international donors should continue support independent media in Moldova is for enabling them to continue hold poor governments accountable.

243 Gotisan. Regional overview of findings and recommendations – Gap asset analysis of Russian Media language skill set in the Eastern Partnership, 6 244 Murschetz. State aid for newspapers – Theories, Cases, Actions, 380 245 Dodon, Victoria. Interviewed 2017-02-20. 246 Galai, Daniela. Interviewed 2017-01-30.

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That would not only be a democracy disaster, the risk is Moldova would become a country for international . The government is currently trying to legalize laundering money. It is not only us – crashing as a country – but producing a dangerous hole, in a country where the democracy will be so weak. You don’t need a big country, it’s enough with a few square kilometers and a bank. It’s not that much about financing us as a country, but to support the democracy to not allow these things to happen and continue hold poor governments accountable. Poverty is a bad thing, but being just poor in a country with ensured supremacy of the law and democracy is one thing. Another thing is having a massively brain drained country, with the intellectuals running away, remaining just less informed, but patient citizens - then you can create dangerous schemes.247

Previous research has shown in countries with weaker markets and later capitalist development media markets often developed unregulated, because of alliances between politics and the private sector, politicization of regulatory authorities and lack of liberal institutions.248 Not only did Moldova have a late and weak capitalist development, the decline in GDP growth in Moldova is among the strongest in Eastern Europe.

Although the search for alternative funding resources is more urgent than ever, Cristina Mogildea have low expectations that the search will succeed, mainly due to economic reasons. Therefore, she puts greater emphasis on the Moldovan diaspora, taking as example the rising numbers of expatriate subscribers to the investigative newspaper Ziarul de Garda prior to the 2016 presidential elections. The newspaper dedicated one page to Moldovans living abroad, who wanted to share their experience, thoughts and wishes for the country’s political, social and economic development. Therefore, she argues that the Moldovan media should continue strive to get the attention of the expatriate community.

With so many Moldovans leaving the country to work and live abroad, where some of them continue their education, Moldovan media should strive to get their attention and try to develop sustainable readerships in their communities. (…) Independent outlets that provide fair and balanced news coverage helped fill a communication gap for the Moldovan diaspora.249

Cristina Mogildeas notion of the Moldovan diaspora is relevant taking to account the whole Moldovan consumption derives from the unsustainable source of remittances sent by Moldovans working abroad.250 Cristina Mogildea further notes the efforts to control the public opinion prompted the active part of the society to seek alternative news sources. I interpret it as a good sign, linking it to what previous research on media capture have shown, namely “every time a government

247 Carasciuc, Lilia. Interviewed 2017-02-23. 248 Terzis. European Media Governance, 446 249 Mogildea, Cristina. Interviewed 2017-03-29. 250 Institute for Development and Social Initiatives “Viitorul”. The quality of governance evaluated through provided state services, 22

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pays an outlet to suppress its information, the commercial revenue of the other outlets goes up because they face less competition on the commercial side”.251 According to Victoria Dodon, many of the international donors say, “NGO’s and the media sector is the last hope” in Moldova. She further wishes international donors supported not only media projects, but also those projects promoting public data, opening public procurements and revealing information on companies’ owners. However, when it comes to donors supporting the reformation of state institutions, Dodon paints a rather discouraging picture regarding the lack of reactions from the donors on failures of implementing reforms. In fact, she believes only freezing the funds could in fact increase the governments accountability.

Our state structures have been using huge amounts received from international partners, promising reforms, but achieved extremely few positive results. For instance, the justice sector reform on which more than 60 million Euro was spent. What we have in the end is the same biased, politically-based decisions, selective justice and trials behind closed doors in cases of a high public interest. Same with the prosecutor reform or the lawyer’s sector – the change is not the one expected. I would like the donors to put more pressure.252

If the Eastern European countries would have been able to consolidate their democracies, Karol Jakubowicz suggests it is a more realistic proposition they would now have a Democratic Corporatist (Northern European) media system where state subsidies are common, instead of a Mediterranean or Liberal. However, the “advancement” cannot be expected soon. In Democratic Corporatist countries, state subsidies are given according to neutral rules, based on market economy principles and aren’t perceived to impact journalism practice. In a try to discern what is ahead for the Moldovan media system and evaluate the potential of the Democratic Corporatist model, the interviewees were asked what speaks for and against a system of subsidies to the private media from the Moldovan state? It becomes clear, analyzing the thoughts of the interviewees, that a compensatory mechanism would be crucial for a system with state subsidies to the media to have potential. I interpret that the interviewees are skeptical towards state subsidies to the media primarily if it’s thought as something provided proportionally, due to the current ownership concentration within the media market. The positive outcome of at least a minimum of secured income to the independent media, would not be equivalent to the negative outcome of providing a secured base income to “three quarters of the market at its best”, as Lilia Carasciuc noted. Some interviewees remain reluctant, despite the compensatory aspect, due to what I interpret

251 Besley and Prat. Handcuffs for the Grabbing Hand? Media Capture and Government Accountability, 721 252 Dodon, Victoria. Interviewed 2017-02-20.

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as a low trust in the incumbent political leaders, their inability to deliver and the lack of compliance with the rule of law. Victor Gotisan is highly skeptical and draws a parallel to the Public Broadcasting Sector (PBS) which is relevant to this discussion, despite the focus of this thesis is state subsidized private media – not public service. To influence editorial policies, Victor Gotisan believes the Moldovan Parliament would abuse their power over the annual budget, by threatening to limit the amount if the media is not compliant. Taking to account the current Quality of Government and Rule of Law in Moldova, this could indeed be a risk.

State subsidies for media could be a solution in democratic countries, but in Moldova this is not a solution at all. Mainly, because the politicians in power think that if they direct money for media outlets, they should have control of the editorial policies of these media. And subsiding the PBS from public budget, like it is now, is a clear example so this is not a solution to Moldova. The fact is, in election years, money directed from public budget for PBS budget is much higher, and the PBS yearly budget is adopted by Parliament. So, this is a perfect tool of controlling this media outlet and a signal to the PBS management: “hey, guys, we can give you much more money since we have this power, but please be nice and do what we ask you to do, otherwise your budget will be cut next year”.253

In their study of public service media in 14 countries – note however, that the sample did not include any Eastern European post-Communist state, only more or less mature democracies – Benson and Powers found funding is established for multiyear periods, limiting the governments possibilities to approve or disapprove content before funding. The public agencies and administrative boards are to serve as a buffer between the broadcasters and the government in power. This is a relevant notion, since the highly politicized regulatory bodies in Moldova does not create an “arms-length” institutional relationship between media outlets and the politicians.254 According to Cristina Mogildea it is difficult to estimate whether a state subsidy system would benefit the media landscape or become yet another tool for pressure and control. To link Victor Gotisan and Cristina Mogildea’s notions to previous research, critical analyses have dampened the enthusiasm of state intervention into the media. Selective subsidies expose media to the danger of covert government control, but state control of the media may also take more subtle forms.

Partly that is because the field itself is distorted due to ownership issues and partly because state institutions are almost routinely captured and fail to perform their functions. Accordingly, we cannot predict whether state subsidies would act to help the media needing funds, or they would end up yet another tool for pressure and control over those media that are perceived as inconvenient. At

253 Gotisan, Victor. Interviewed 2017-03-12. 254 Benson and Powers. Public Media and Political Independence: Lessons for the Future of Journalism from Around the World, 5

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any rate, it seems safer to explore other ways of multiplying income sources, especially as many media institutions are not yet ready capacity-wise to detach themselves from international donors.255

To link Cristina Mogildea’s notions about the “distorted media sector” and institutions “almost routinely being captured” to previous research, it has been shown once a political system is infected with mutual mistrust and deviant political behavior, the sickness quickly infect the entire political body.256 Public trust is important for both proper media257 and state performance, since it has been indicated that corruption undermine trust, leading inescapably to higher levels of corruption and a “spiral of malfunctioning”.258 Also, if given out to the wrong beneficiaries, subsidies to the media may undermine democratic legitimacy and accountability, 259 and this fact is perceived as particularly relevant in the case of Moldova. What is also noted repeatedly among interviewees as an argument against state subsidies is the low capacity of the state budget in one of Europe’s poorest nations.

For sure, the last variant – subsidies from the Moldovan state – is better. We cannot live a life on international donors. But at the same time, our state budget is very poor. When it comes to radio and TV, we do not talk about investments of 100 dollars, but investments of high amounts. I’m afraid that the retired people with very low pensions, would perceived it as a problem that money is pumped in the media. The TV doesn’t feed them and it is not providing warmth for their houses. My only hope now is that the international donors will use their forces. International monitoring might be the solution. 260

Victoria Dodon understands a system of state subsidies works in other countries with higher level of democracy and accountability, however, she has a hard time imagine such system would work by default in the Moldovan context.

We live in a country where these powers are clearly separated – executive, legislative, judiciary and we do our job, that's how we perceive it. We are too far away from such high levels of democracy. In the last 20 years, we have understood that the people in power haven’t had any exceptional achievements that would make us become a part of the European Union for example. As a citizen, I’m reluctant directly from the start to everything linked to the government, since it has proved it is not able to get us to a higher level. (…) It might sound too straightforward, but I believe we need some generations to pass to start a new page in our history. There are still Soviet perceptions and lifestyles. (…) We need to get new blood and new visions.261

While Dodon correctly notes that the powers are clearly separated between the executive, legislative, judiciary and the media in Moldova, I argue that this is not a valid argument against subsidies as such, since the nut to crack lies in the fact that while the powers in Moldova are structurally separated in theory – they are not separated functionally, in practice.

255 Mogildea, Cristina. Interviewed 2017-03-29. 256 Manow. Low-trust and high-trust equilibria in politics: Party Patronage and Political Corruption as Coordination Games, 7 257 Terzis. European Media Governance, 449 258 della Porta and Vannucci. Corrupt Exchanges: Actors, Resoucres and Mechanisms of Political Corruption, 256 259 Wolfson. Towards a theory of subsidization, 16 260 Galai, Daniela. Interviewed 2017-01-30. 261 Dodon, Victoria. Interviewed 2017-02-20.

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This can be linked to the findings of Nam and Oh; in Communist, totalitarian or one-party states, they cannot find autonomous subsystems engaged in the political process. Instead, the subsystems are separated structurally, but not functionally.262 Therefore, I argue, clientelistic states should be added to the group of Communist, totalitarian and one-party states.

Regarding state subsidies, I do not know if you can compare with Nordic countries higher levels of democracy. We have had democratic reforms, but while the indicators show one thing, the reality it is a little bit different, unfortunately. I don’t know what mechanism should be built, that could work. Personally, I am very skeptical. Moldovan press should die and refresh from the ashes.263

There is for sure a lack of resources and inabilities of independent media to support themselves. The media needs support. However, the risk with this subsidy system is if it would be invested proportionally, they would be controlling three quarters in the best case. I’m afraid they will find ways to reallocate even more in their favor. In our case, when we have this concentration in one single hand, I expect they would receive the main support and be main beneficiaries – not the poor ones. (…) It should be well thought out how to do these things. It cannot be a system where the most is given to someone who is acting unfair.264

Lilia Carasciuc argues for one type of compensatory mechanism. State subsidies would have potential in case it was provided based on the results of independent monitoring examining who have the most trustworthy and nuanced content with low levels of manipulation. Instead of content monitoring, Daniela Galai argues for objective audience measurements to provide state support equivalent to their audience shares. Despite that the scope of this thesis isn’t public service, Daniela Galai has a relevant suggestion regarding Moldovan obtaining the Romanian model for financing public service through extra fees at the electricity bill, a system used in Serbia and previously in Greece. She argues this is a better solution than state subsidies, even for private media.

In this way, the television is not dependent of the state, that’s even better. I would not have any problems with it, but money from the state, I don’t know if it would work. Somehow, in another method – for example through the electricity bill, could work.265

The most optimistic answer was provided by Dumitru Stoianov, who was the only interviewee to note that there are in fact already a state funded structure in Moldova designed to fund private media content – National Center for Cinematography (CNC). It was created in 2016 and will be operating under Ministry of Culture. The fact that CNC has been created in Moldova, makes Stoianov believe it is possible to create a similar structure for news media.

Starting from next spring, private production companies can apply to this state budget funded center to receive grants to make movies. And you want me to speculate, right? At this stage, we can imagine company X and investigative journalist Y can apply at CNC for a grant with an idea of investigative documentary, that will aim to demonstrate high corruption in, say, Ministry of Culture itself. CNC will

262 Nam and Oh. Press Freedom: Function of Subsystem Autonomy, Antithesis of Development, 744 263 Galai, Daniela. Interviewed 2017-01-30. 264 Carasciuc, Lilia. Interviewed 2017-02-23. 265 Galai, Daniela. Interviewed 2017-01-30.

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have a separate documentary fund. If they approve the grant – that would definitely be a triumph of freedom of speech and integrity in Moldova. But there are no precedents, as it didn't start to operate yet. That’s a great idea of an experiment! Thanks for inspiration. 266

I argue one of the more thought-provoking answers was provided by Dumitru Stoianov. First, I would like to readdress what Fukuyama insists regarding the size of the state; “if you want a less controlling state, you need a strong state to achieve it” – democratic institutions in the wrong circumstances can be a destabilizing force as well. Fukuyama argues for three blocks required to coexist to build a well-ordered society – a strong state, rule of law and democratic accountability. In short terms, Dumitru Stoianov prefer international donors funding independent media since the Moldovan state is too weak to handle it on its own. With a “weak state” Stoianov mean a state that change depending on the people in power, what I would translate to low Quality of Government. In a strong state however, he argues state subsidies might be a more reasonable solution in the long term, where instruments funding media will appear “organically”, which I find particularly interesting. With “strong state”, Stoianov mean a country that will be impossible to change depending on who’s in power – what I translate to high Quality of Government emphasizing impartiality.267

I believe international donors funding independent media is not the worst scenario, as the donors don't interfere in the editorial policies and support independent media as a watchdog. So, if you want my opinion, I vote for things to stay like they are. Independent media sponsored by international donors, thus immune to whatever might happen and continues to force people at power to undertake reforms with a final sustainable goal – to build a strong state. In a long term, state subsidies might be more reasonable solution. But currently, media funded by the international donors interested in reforms and Moldova's democratization, will be more efficient than media funded by authorities interested in mimicry the reforms and defend their interest. As soon as state institutions will be functional and independent enough from the person who chair them, the state instruments designed to fund media will appear organically.268

According to QoG theory, impartiality is defined as the opposite of any types of favoritism.269 Since it can be difficult to prove favoritism, I argue that if a media outlet fulfills a set of criterions, but not receive the subsidy it has the rights to, it would be the first to complain. That would further be a way to prove whether media loyal to the incumbent political leaders are favored over oppositional media. While Victor Gotisan repeats, subsidies do not work in countries with fragile democratic norms, Dumitru Stoianov thinks it could be a good mechanism. Victoria Dodon is one of several interviewees who find it difficult to imagine it would have potential by default in Moldova, since the society is infected and the media is not an exception. According to her

266 Stoianov, Dumitru. Interviewed 2017-01-19. 267 Rothstein and Teorell. What Is Quality of Government? A Theory of Impartial Government Institutions, 170 268 Stoianov, Dumitru. Interviewed 2017-01-19. 269 Rothstein and Teorell. What Is Quality of Government? A Theory of Impartial Government Institutions, 170

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state subsidies is something idealistic, however would it not be possible to achieve unless the media sector was “rebuilt from scratch”, which she argues is a topical scenario.

Prospects: The main challenges for the future

The interviewees were asked about their prospects regarding the main challenges for the Moldovan media. Victoria Dodon says the future is unclear. She sums up it will be even more challenging to do journalism, due to the lack of financial and human resources, and the political pressure. There’s not enough resources to do fact checking and counter the misinformation and propaganda. If the capital media is surviving somehow, the situation is extremely unfavorable for the ones in the regions. She also describes the frustration of raising public issues every day, without noticing any changes. When the same wrongdoings are constantly repeated, she argues people prefer to leave the country.

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10. Conclusion and discussion

To begin with, there are two contradicting processes coined by others, brilliantly capturing the current state of Moldovan politics and media; “modernization without development” and “pluralism without diversity”. I argue both processes are results of well-intended attempts of establishing a set of mechanisms to improve the Moldovan society. However, I argue that what makes the QoG theory so useful in these cases are the emphasis on the output – so, we established the mechanism, why wasn’t it incorporated? QoG theory has been useful for analyzing Moldova, just like the self-regulated liberal theory and the state interventionist theory calling for social responsibility within the media sector.

RQ1 and RQ2: Political parallelism and how it differs from Northern Europe

To some extent, I am opposing even describing the relationship between Moldovan state and media with the concept “parallelism”. According to the interviewees and existing secondary data, it is not really a matter of any co-evolution between the two systems. Rather is it described as an unequal, destructive one-way relationship, without mutual trust and wish for dialogue. Basically, everything else than constructive. It should therefore not come as a surprise that reforms have stagnated in Moldova. Fukuyama insisted that three building blocks needs to coexist for a well-ordered society; a strong state, the rule of law and democratic accountability. I argue initially that the Moldovan state has proven weak and incapable of implementing certain public policies, as well is the compliance with rule of law and the democratic accountability perceived as low among the interviewees. More in general, the Quality of Government is higher in Northern European countries, than in post-Communist states in Eastern Europe. In Northern European media systems, the state takes social responsibility for the media sectors to a higher degree and state subsidies are common. While it has been predicted that the Northern European model is more of a realistic future for the Eastern Europe path, I can confirm that the advancement cannot be expected soon. While there are high levels of political parallelism in both Eastern European countries and Northern European countries, what differs is the nature of the parallelism. Like the Northern European countries, Moldova has a dual model with public and commercial media. However, only public media is funded by the state budget, in contrast to many Northern

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European countries also providing state subsidies to private media to secure pluralism and independence. Within the relationship between the state and media in Northern European countries there is an acceptance of state involvement in the media sector. In these countries, there is a general trust in political bodies, and the state has not been perceived as an enemy of the media. However, in Moldova and arguably many other post-Communist states in Eastern Europe, the trust in political bodies is lower and the state is perceived as an enemy to the media, just like the media is perceived as an enemy of the state. Instead of a responsibility- taking relationship, it is one of state paternalism in Moldova. When it comes to the dimension of rational-legal authority in contrast to clientelistic forms of social organization270, this is one of the crucial differences between Moldova and the countries in the Northern European model. It has been clearly stated both by interviewees, reports and cross-national comparisons that Moldova currently is far from a state with supremacy of the law. What has been increasingly notable is rather the republics clientelistic governance. Therefore, I recommend further discussions on the effectiveness of solely focusing on the need for institutional reforms in these clientelistic states.

RQ3: State subsidies to correct market failure and increase QoG

Currently, even if media would have had sufficient financial resources, I would perceive the possibilities of Moldovan media to improve Quality of Government as low, due to a lack of all three prerequisites Färdigh identified as crucial; accessibility, accountability and responsiveness. Further, Färdigh suggested a strong positive relationship between media freedom and QoG, if it is conceptualized as something good for investors. However, in cross- country comparisons, Moldova scores low in all crucial Business QoG-indicators; corruption, law and order and quality of bureaucracy. However, independent media do not have sufficient financial resources. On top of the global trends affecting media, financing is the main challenge for the oligopoly Moldovan media market with its monopolized advertisement market, creating unfair competition. The spirit of the answers provided by the interviewees, I would conclude as while none of the interviewees argue explicitly in accordance with the liberal theory of the press, the weak and immature Moldovan state is not yet ready for taking the social responsibility of the private media and correct market failure through state intervention.

270 Hallin and Mancini. Comparing Media Systems: Three Models of Media and Politics, 296

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The weak state is consequently the reason why funding from international donors is to prefer as long as it is provided, since they do not interfere in the editorial policies and they do not affect the fragile state budget. Recent years’ financial crimes have severely affected the state budget’s capacity. Not only was the National Bank reserves decreased by nearly a third, the Government decided last year to make the stolen billion a public debt for the next 25 years.271 While it was argued that state subsidies could be reasonable in the long term and appear “organically” within a strong state, others argue for exploring alternative revenue streams and take inspiration from international and national researchers – if not totally separated from the state, at least in another form, such as the Romanian version through the electricity bill. In continental Europe and Scandinavia, state subsidies supplement allocative decisions of the free-market mechanism and promotes diversity and independence. Further, state subsidies are not perceived to have any impact on journalism practice. However, Moldova’s “distorted media market” is the primary reason why interviewees are skeptical towards both the liberal and the social responsibility theory of the press – primarily state subsidies. The grave market failure needs correction, however do the interviewees not believe the incumbent political class could achieve a media market with unhindered competition. Likewise, the extensive ownership concentration is the primary reason for why it would be crucial with a compensatory mechanism for state subsidies to have any impact. It was suggested that compensations in Moldova could derive from results of independent content monitoring or audience measurements. Despite a growing body of academic results indicating state-subsidized media are no less critical than non-subsidized, there is a fear that state subsidies would be yet another tool for control and pressure in Moldova. Taking to account the influential role within both media, media regulatory bodies, advertisement and politics in general by one single individual, there are reasons to take this fear seriously. Critical voices have previously stated “close operations between the state and media in areas of ownership, finance or employment may be seeding ground for authorities control over information”.272 Just like democratic institutions can be destabilizing under wrong circumstances, it is a fact that state subsidies given to wrong beneficiaries within a media market, may undermine

271 Alaiba. Resetting the Moldovan Banking Sector:: What Can Europe Do and Why? 41 272 Murschetz. State aid for newspapers – Theories, Cases, Actions, 377

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democratic legitimacy and accountability.273 Both findings – regarding state governance at the one hand and media governance on the other – are interpreted as particularly relevant in this case study of Moldova. Consequently, I would further like to emphasize the importance of a clear distinction between political and non-political owners when examining media ownership concentration. I perceive this aspect as crucial, since it could be explanatory for different outcomes not only in the media markets, but for governments and societies at large. Another argument against state subsidies as such is, with a current economy dependent on unsustainable sources such as remittances of expatriates and funds from international donors, state subsidies may further “drive market inefficient behavior of recipients”,274 not forcing them to actively search for alternative sources. Regardless if the funds are provided by donors or the state – the money will be lost unless it’s managed properly. Another argument against state subsidies – albeit a weaker argument in my opinion – is the rising tendency of competent managers leaving the country. On the topic, it was further proposed that Moldovan media outlets should instead strive to further engage the expatriate community, since it is perceived as often having greater purchasing power and higher education – the latter being particularly important for the level of media literacy. However, there have been promising signs lately of structural economic reforms to improve operating conditions for civil society and the media. One is the “Two Percent Law” adopted. Another is the fact that there was recently a state structure created to fund private media content, more specifically cinematography. Depending on the outfall of these reforms, there could be reasons to reevaluate the potential of state subsidies in a couple of years.

Some last reflections

With this thesis, I hope I have contributed to a more nuanced picture of the importance of media freedom in the processes of establishing, improving and maintaining Quality of Government, something that previous research has identified a need of.275 While Jakubowicz asked whether it should be taken as prediction that with successful consolidation of democracy, Eastern European media will follow the Northern European path

273 Wolfson. Towards a theory of subsidization, 16 274 Murschetz. State aid for newspapers – Theories, Cases, Actions, 380 275 Färdigh. What’s the use of free media? The role of media in curbing corruption and promoting quality of government, 29

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of the media system,276 a question I bared in mind throughout the work with this thesis has been what role media (potentially state subsidized) could play in achieving these consolidated democracies, with improved QoG and stronger states? Because often, I notice, the focus tends to be on external factors, such as the prerequisites for media to have an impact on government quality or for a well-ordered society to be built. While I understand why, the key requirements too often tend to be on someone else’s table. Apparently, these democracies will not suddenly consolidate without anyone lifting a finger – especially not Moldova, apparently – which is why I always come back to the same crucial question; what can each of these actors do, to improve the overall situation? However, in the case of Moldova, one cannot blame at least the small group of media acting as school book examples of watchdogs, for not doing enough. They do practically everything in their power, still observing the same wrongdoings repeated day after day. Then I find myself also blaming external factors, such as lack of accountability and responsiveness of the Moldovan Government. Back one square one. This is certainly not easy.

276 Jakubowicz. In Terzis. European Media Governance, 311

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Appendix 1: Facesheet Carasciuc, Lilia. Interviewed 2017-02-23. Carasciuc Gotisan, Victor. Interviewed 2017-03-12. Gotisan is the Executive Director at Transparency has over ten years’ work experience in media, civil International Moldova. She is the coordinator of society and private sectors in Moldova/Eastern the working group Good Governance within Europe. He is currently the GIZ National Advisor on “Democracy, Human Rights, Good Governance and External Communication within ‘Modernization of Stability” within the National Platform in the Local Public Services in the Republic of Moldova’ Eastern Partnership Civil Society Forum. Carasciuc project. He is a freelance media expert and wrote her Doctoral Dissertation in Economics. consultant on media research projects for the When studying at the Academy of Science she was Independent Journalism Center. Gotisan was the invited to participate in a study of shadow leading country researcher and media expert economies. She has further been working with a within the ‘Mapping Digital Media’ project in think tank by the UNDP and World Bank. She is the Moldova for the Open Society Foundations author of “Corruption and Quality of Governance: between 2010-2013. 2008-2009, he was involved The Case of Moldova” published 2001 and more within the ‘Journalists against Corruption’ project than 60 other publications. coordinated by the IREX. He was the content manager editor for the online publication Dodon, Victoria. Interviewed 2017-02-20. Dodon is Moldova.ORG and freelance journalist for several a reporter at Anticoruptie.md/Center for Moldovan media outlets, such as investigative Investigative Journalism (CIJ) Moldova. She is the newspaper ‘Ziarul de Garda’ and ‘Jurnal de representative of CIJ Moldova in this thesis. Dodon Chisinau’. Gotisan graduated with a BA in has been reporter for the Anti-Corruption Portal philosophy and earned his MA studies in since April 2015 and has had four years of working anthropology at Moldova State University and experience in the media. Victoria Dodon graduated history at University of Warsaw. at the Department of Journalism and Communication Sciences. She was previously Mogildea, Cristina. Interviewed 2017-03-29. Head reporter for the Unimedia portal and later was part of Media Azi and researcher at the Research of the team of the newspaper Adevărul Moldova. Department, Independent Journalism Center. She In 2014, she coordinated a TV business project. She is the head of the Media Azi and Research has attended a number of professional training Department of the Center for Independent courses outside the country, including in Poland, Journalism. She graduated from Babes-Bolyai The Netherlands, Latvia and Germany. Since 2013, University (Romania) with a degree in Applied she is member of the European Forum of Journalist Modern Languages. In 2010 she graduated from Students where she represents Moldova. the School of Advanced Journalism. In the same year, she founded jointly with two other SAJ Galai, Daniela. Interviewed 2017-01-30. Galai is graduates the online magazine Pentruea.md. She currently the Program Coordinator for the Media was the magazine's Editor-in-Chief until 2012. and Media Literacy in Moldova at IREX Moldova, Besides, she worked as a freelance where she started in 2014. Galai graduated the interpreter/translator. Since 2010 she participated Journalism and Communication Faculty from the in several media research projects, including the University of Sibiu, Romania in 2003. She was later Press Freedom Index and the Media Viability Index. a student within the Independent Journalism Center Project “Advanced School for Journalism”. Stoianov, Dumitru. Interviewed 2017-01-19. 2003–2006 she was a reporter at the newspapers Dumitru is a freelance reporter and factchecker at Timpul de dimineata and Gazeta Libera. 2007–2008 Media NGO RISE Moldova. Specialized in Sport, he Galai was freelance journalist at Ziarul de Garda worked for five years in the Publika TV Sports and she was also in charge for the English version Department. He participated in several of the newspaper. During 2008, Galai was a media investigations. Dumitru joined RISE at the consultant at IREX Moldova. Galai worked at the PR beginning of 2015, responsible for fundraising, fact- office at the Ombudsperson for the Children`s checking and project coordination. In 2016 he rights in Moldova in 2009. From 2010, she was the received the Visby Scholarship from the Swedish editor responsible for external news at Publika TV, Institute, being a student of the Master’s program until she obtained her current position. in Investigation Journalism at the University of Gothenburg, Sweden.

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Appendix 2: Interview guide

• May I first and foremost ask you to briefly present yourself, your background as well as how you ended up in the position you are currently occupying?

Regarding the Political Parallelism

• How would you describe the relationship between the Moldovan Politics/State and the Moldovan Media? (Regarding for example the ownership aspect, interferences/influences in/over each other, respect for each other’s roles, etc.) • How would you say the situation for Media in Moldova affects Moldova’s general development? • What role can Media play for holding Moldovan politicians accountable, improving Moldova’s quality of governance and preventing corruption? In theory VS in practice?

Regarding the Media Market

• What are the prevailing alternatives for financing media in Moldova? • The independent Media in Moldova are highly dependent on international donors. What is your thoughts regarding the financial sustainability of this fact? (The interviewees will be encouraged to think about a hypothetical scenario where bi- and multilateral actors etcetera not any longer priorities to support free media in Moldova and what effect that would have.) • What alternatives do you see to external funding to Moldovan media from international donors? • What speaks for and against a system of subsidies from the Moldovan state? (A system where all medias fulfilling a set of criterions, regardless of their political affiliations, may receive funding from the state. Do you believe it would it have potential in Moldova? Why or why not?) • Since it can be difficult to prove favoritism is occurring, I have an assumption that if a media fulfills a set of criterions, but still does not receive the subsidy it has the right to, they would be the first to protest. Further, it would be easy to prove whether the subsidies were paid out or not. That could be a potential way to prove if for example pro regime media were favored over an oppositional. What’s your thoughts about that, in the Moldovan context?

Other • Do you believe that the Moldovans in general see the value of independent media when trying to build a strong state? Historically, you’ve experienced Soviet, the following Communist period and now the ownership is concentrated to a few wealthy individuals with different geopolitical orientations, primarily pro-European – do the Moldovans see media as something that could be independent? Or is it mainly considered to be propaganda? • What are your prospects? What are the main challenges for the future for the Moldovan media market?

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