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Multi0page.Pdf - b - Sv f A~~~~~~~~~~~~~~~~~~~~~~~Lk_ Public Disclosure Authorized The Xifl@n<(X,pVtj>Teeii Public Disclosure Authorized 25070 November 2002 Public Disclosure Authorized TfC\'ilUtc4iITh lFt -,,0 -tied into a wimtcr ofd '~~~~ 'TUD' = ~MN the a,ntry, corruption fUEPEVELO T ST UDIES... Public Disclosure Authorized WBI DEVELOPMENT STUDIES The Right to Tell The Role of Mass Media in Economic Development The World Bank Washington, D.C. © 2002 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 All rights reserved. 1 2 3 4 5 03 02 The findings, interpretations, and conclusions expressed here are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank cannot guarantee the accuracy of the data included in this work. The bound- aries, colors, denominations, and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is copyrighted. No part of this work may be reproduced or transmit- ted in any form or by any means, electronic or mechanical, including photocopying, recording, or inclusion in any information storage and retrieval system, without the prior written permis- sion of the World Bank. The World Bank encourages dissemination of its work and will nor- mally grant permission promptly. For permission to photocopy or reprint, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202- 522-2422, e-mail [email protected]. Library of Congress Cataloging-in-Publication Data has been applied for. Contents Foreword v About the Contributors vii 1. Into the Looking Glass: What the Media Tell and Why- An Overview 1 Rou(meen Islamti PART 1.HOW THE MEDIA SUPPORT MARKETS 2. Transparency in Government 27 Joseph Stiglitz 3. Mass Media and Political Accountability 45 Timlothy Besley, Robin Burgess, and Andrea Prat 4. The Media and Markets in the United States 61 Edward S. Hermtan 5. Irrational Exuberance in the Media 83 Robert J. Shiller 6. Distributing News and Political Influence 95 David Striimberg 7. The Corporate Governance Role of the Media 107 Alexander Dyck and Liuigi Zingales a Contents PART II: WHAT ENABLES THE MEDIA 8. Media Ownership and Prosperity 141 Simeon Djankov, Caralee McLiesh, Tatiana Nenova, and Andrei Shleifer 9. Media as Industry: Economic Foundations of Mass Communications 167 Bruce M. Owen 10. The Legal Environment for News Media 187 Peter Krug and Monroe E. Price 11. Insult Laws 207 Ruth Walden 12. Media in Transition: The Hegemony of Economics 225 Tim Carringtonand Mark Nelson PART 111.WHAT THE MEDIA SAY ABOUT THE MEDIA 13. The Best Profession in the World 249 Gabriel Garcia Mdrquez 14. The Media and Access to Information in Thailand 255 Kavi Chongkittavorn 15. The Media and Development in Bangladesh 267 Mahfuz Anamn 16. How the Cairo Timnes Came to Be Published out of Cyprus 275 Hishamn Kasseni 17. The Role of the Media in Zimbabwe 281 Mark G. Chavunduka 18. Journalism after Communism: Ten Commandments 291 for a Good Journalist Adam Michnik 19. The Survival of a Provincial Television Station in an Era of Enormous Changes 301 Viktor Muchnik and Yulia Muchnik Index 309 Foreword Over 1.2 billion people live on less than a dollar a day. And many of these poor people not only suffer from physical and human deprivation but also lack voice in decisions that affect their lives. Moreover, corruption and weak governance corrode aid effectiveness. Undoubtedly, there has been progress on these challenges, but de- velopment is a complex issue involving actions on several fronts. A key ingredient of an effective development strategy is knowledge transmission and enhanced trans- parency. To reduce poverty, we must liberate access to information and improve the quality of information. People with more information are empowered to make better choices. For these reasons, I have long argued that a free press is not a luxury. It is at the core of equitable development. The media can expose corruption. They can keep a check on public policy by throwing a spotlight on government action. They let people voice diverse opinions on governance and reform, and help build public consensus to bring about change. Such media help markets work better-from small-scale veg- etable trading in Indonesia to global foreign currency and capital markets in London and New York. They can facilitate trade, transmitting ideas, and innovation across boundaries. We have also seen that the media are important for human develop- ment, bringing health and education information to remote villages in countries from Uganda to Nicaragua. But as experience has shown, the independence of the media can be fragile and easily compromised. All too often governments shackle the media. Sometimes con- trol by powerful private interests restricts reporting. Low levels of literacy, human capital, and technology can also limit the positive role the media can play. And we have seen the impact of irresponsible reporting and manipulation-witness the dev- astating effects of war propaganda in Rwanda. It is clear that to support develop- ment, media need the right environment-in terms of freedoms, capacities, and checks and balances. The World Development Report 2002 Building Institutionsfor Markets devoted a chapter to the role of the media in development. This volume is an extension of that v E Foreword work. It is an important contribution to our understanding of how the media affect development outcomes under different circumstances and it presents evidence on what policy environment is needed to enable the media to support economic and political markets and provide a voice for the disenfranchised. To this end, it draws together the views of academics as well as perspectives from those on the front line- journalists themselves. The book will be of interest to policymakers, nongovernmen- tal organizations, journalists, researchers, and students. This publication supports the work that the World Bank is doing on transparency and governance, and it complements the ongoing efforts of the World Bank Institute, which provides training for journalists in investigative reporting in over 50 coun- tries. It also supports the work of our External Affairs Department, which cooperates with governments to shape effective development communication. Looking forward, this book is one of a series of steps that the World Bank, to- gether with its partners, will take toward building a more transparent world and accountable government. JAMES D. WOLFENSOHN PRESIDENT THE WORLD BANK GROUP About the Contributors This book is a continuation of the work carried out for the World Developmlent Report 2002: Building Institutions for Markets. It wasl prepared by a team led by Roumeen Islam and comprising Simeon Djankov and Caralee McLeish. Alice Faintich was re- sponsible for copyediting and John Didier for oversight of the publishing process. Mahfuz Anam is the editor in chief of the Daily Star, a Bangladeshi newspaper. Timothy Besley is a professor of economics at the London School of Economics and director of the Suntory and Toyota International Centres for Economics and Related Disciplines. Robin Burgess is a lecturer in economics at the London School of Economics and the director of the Programme for the Study of Economic Organisation and Public Policy at the Suntory and Toyota International Centres for Economics and Related Disciplines. Tim Carrington is a senior public information officer at the World Bank Institute in Washington, D.C. Mark Chavunduka is a former editor with The Standard, Zimbabwe's leading inde- pendent newspaper. Kavi Chongkittavom is executive editor of The Nation, the leading English-language newspaper in Thailand. Simeon Djankov is a senior economist with the Private Sector Advisory Services of the World Bank. vii E Contributors Alexander Dyck is an associate professor of business and government at the Harvard Business School. Gabriel Garcia Marquez is a journalist and writer and the winner of the Nobel Prize for Literature for 1982. Edward Herman is Professor Emeritus of finance at the Wharton School of the Uni- versity of Pennsylvania. Roumeen Islam is manager of the Poverty Reduction and Economic Management Unit at the World Bank Institute. Hisham Kassem is editor of the Cairo Times, an English-language news magazine in Egypt. Peter Krug is a professor of communications law at the University of Oklahoma, College of Law. Caralee McLiesh is an economist with the Private Sector Advisory Services of the World Bank. Adam Michnik is the editor-in-chief of Gazeta Wyborcza, Poland's leading daily news- paper. Victor Muchnik is editor-in-chief of the television station TV2 in Tomsk, Russia. Yulia Muchnik is a journalist with the television station TV2 in Tomsk, Russia. Mark Nelson is a program manager for the World Bank Institute's operations in Paris. Tatiana Nenova is a financial economist at the Private Sector Advisory Services of the World Bank. Bruce Owen is president of Economists Incorporated, a consulting firm specializing in microeconomic analysis. Andrea Prat is a lecturer in economics at the London School of Economics and a member of the editorial board of the Review of Economic Studies. Co tribntors a Monroe Price is the founder and co-director of the Programme in Comparative Me- dia Law and Policy at Oxford University, United Kingdom, as well as the Joseph and Sadie Danciger Professor of Law at the Benjamin N.
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