nelson

The Central European Laboratory: 

The Central European Laboratory Lessons from the Transition for Media Reform Mark Nelson, World Bank Institute

Slide2: 

Source: Freedom House/ World Bank Development Indicators 2000

Slide3: 

Control of Corruption and Freedom of the Press High Low Low High Freedom of the Press (Freedom House) Control of Corruption [kkz]

The Central European Laboratory: 

The Central European Laboratory An industry transformed in a short period of observable time New legislation enacted State owners replaced by investors, foreign and domestic Emergence from the dark: data

Problems of Media in Emerging Economies: 

Problems of Media in Emerging Economies Lack of legal protections for free speech Repressive misuse of libel & insult laws Weak institutional capacity to respond to disclosures Weak management and corporate governance within media sector Lack of independent finance: Dependence on subsidies, state payments, “oligarchs”, rather than relying on readers and advertising Insufficient expertise on key subjects (economics, etc) Lack of comprehensive data on the industry

Case study in Poland: Rzeczpospolita: 

Case study in Poland: Rzeczpospolita Government sold stake in Party daily (1991) Managers did management training Journalists studied economics Beefed up economics/ business coverage Advertising revenues soared, spurred by strong demand for business page Today newspaper is independent, profitable

Economic and institutional reform and links to the media: 

Economic and institutional reform and links to the media Economic growth spurs demand for information Providers of that information compete for new audiences and advertisers Media becomes more independent and plays crucial role of monitoring public and private sector behavior Advocate for institutional change Demand for rigorous information creates “culture of truth-telling” where facts can be checked and verified

But how can we transfer this to other parts of the world?: 

But how can we transfer this to other parts of the world? Public sector reforms that focus on transparency, competition Privatization De-linking media from public purse Growing public disclosure by media companies of their results leads to investor confidence Foreign investment

Entry Points: 

Entry Points Governance reforms: inclusion of media issues in training and implementation of reforms Public sector reforms: stronger emphasis on access to information at all levels, privatization of media, encouraging foreign investment in media Private sector: building knowledge about links between economic performance and good corporate governance/ transparency Knowledge economy: showing links between successful use/creation of knowledge and quality/ freedom of media

The Power of Data: 

The Power of Data Country and international indicators Industry and firm level indicators

International and Country Indicators: 

International and Country Indicators De-politicises debates about power, control or responsibility Allows countries to focus scare resources on main problem areas, learn from neighbors, adopt policies that cut across sectors Shame factor becomes incentive for change

Industry or firm-level indicators: 

Industry or firm-level indicators Key area of management weakness in news media organizations Lack of benchmarks and targets: management in the dark News media ineffective advocate for transparency in public life or among other private sector organizations

Russia Over Time (vs. Slovenia)6 Aggregate Governance Indicators (Percentile Rankings, 1997-98 / 2000-01): 

Russia Over Time (vs. Slovenia) 6 Aggregate Governance Indicators (Percentile Rankings, 1997-98 / 2000-01) Rankings were calculated on the basis of 2001 and 1998 country estimates. Sources: KKZ98/KKZ01. Number of countries in worldwide sample, depending on component of governance ranges between 161 and 194.

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Illustration of Data Empowering: Worldwide Indicators

The missing data: 

The missing data Understanding of the media as an investment Profits, profit margins, breakdown of sources of income, details on circulation, prices, cross-ownership Data on ownership, foreign investors, market value Understanding of the public sector role Government expenditure on media, tax breaks Impact of legal environment Better internationally comparable indictors on media freedom

Circulation shocks:1996-2000: 

Circulation shocks:1996-2000 Percentage change in newspaper circulation. Source: World Press Trends 2001.

Advertising Expenditure 1994=100: 

Advertising Expenditure 1994=100 Source: World Association of Newspapers: World Press Trends 2001

Progress among successful reformers Advertising revenue growth 1994-1998, in percent: 

Progress among successful reformers Advertising revenue growth 1994-1998, in percent

1. Laws and Regulations that Influence Media Content (Selected examples from Freedom House) : 

1. Laws and Regulations that Influence Media Content (Selected examples from Freedom House)

Economic Pressures to Influence Content (Selected examples from Freedom House) : 

Economic Pressures to Influence Content (Selected examples from Freedom House)

3. Political Pressures and Controls on Media Content (Selected examples from Freedom House) : 

3. Political Pressures and Controls on Media Content (Selected examples from Freedom House)

State Capture: A By-Product of Low Civil Liberties and Slow Economic Reforms: 

State Capture: A By-Product of Low Civil Liberties and Slow Economic Reforms Degree of Civil Liberties in Transition Economies Degree of Economic Reforms http://www.worldbank.org/wbi/governance Very High State Capture

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

0 5 10 15 20 25 30 35 40 45 50 Hungary Estonia Russia Azerbaijan Parliamentary legislation Decrees Central Bank Influence Firms Reporting Negative Impact of High Level Corruption ‘State Capture’ Source: WBES Survey 1999, 20 transition countries %of all Firms report negative impact of grand corruption % % % % % % % % % % Adverse Impact of ‘Purchases’ of:

Institutional reform and the media: 

Institutional reform and the media Controlled media is at the heart of political power in many weak, unstable regimes Media was also central to establishment of oligarchy in post-Soviet states When free and competent, has huge cross-sectoral and cross-institutional reach Deregulation of media early in reform process has big impact (Poland) Must be coupled with other institutional reforms (Russia)

Key Targets for Media Work: 

Key Targets for Media Work Not just journalists Media managers, editors, publishers, owners Public officials who deal with information Corporate managers and information providers, private sector associations Academics, economists, journalism schools National and international organizations dealing with public sector reform issues

Some lessons from the transition: 

Some lessons from the transition Make media a central focus in public sector reform (privatization, liberal laws on investment, eliminate “insult laws,” detach broadcasting regulators from political influence) Focus on the media’s ability to finance itself through profitable media activities Make efforts to improve the quality of data

Setting priorities: 

Setting priorities Because nature of media-power relationship, many non-free states fear freedom of media But many also realize early need for strong business and economics coverage (“Asian Tigers,” now China) An hypothesis: competent economics journalism leads to stronger independent financial position and political opening for all media (SE Asia, Central Europe, Baltics)

Myths?: 

Myths? State ownership is main problem for media in developing countries (instead: political, economic and legal obstructiveness is much more rampant and difficult to address) The media is a “tool” for development, education, environmental awareness (instead: a free media will increase the flow of information among players in developmental processes but independence demands that it be no one’s tool)

Some questions about implications for media assistance: 

Some questions about implications for media assistance How to improve availability and quality of data? How to bring media into public sector reform, corporate governance agenda as advocates and beneficiaries? How to support management capacity of news media and strengthen access to independent sources of revenue?

www.worldbank.org/wbi/governance: 

www.worldbank.org/wbi/governance