1

Media, Governance and DevelopmentChallenging Convention: An Empirical Perspective

Daniel Kaufmann, The World Bank Institutewww.worldbank.org/wbi/governance

Keynote Presentation at the International Press Freedom Day Conference, sponsored by Unesco,

Colombo, Sri Lanka, May 1st–3rd, 2006

2

Evidence-Based Challenge to 10 Myths on Press Freedom

1. Freedom of the Press as: i) needed for politics alone, & ii) a result of industrialization; a rich country ‘luxury’

2. Data on Media and Governance: scant, & not useful?3. Impact of Press Restrictions on Corruption, Poverty,

and Underdevelopment: Vastly Exaggerated?4. Laws on books are the crucial factor for press freedom?5. Broad press restrictions due to nat’l security: justified?6. Large State Ownership & Subsidies: very beneficial?7. Media not a Business undertaking, not an ‘industry’?8. Privatized Media = Competitive & Effective Media ?9. Do Elections in a country guarantee Press Freedoms?10. Int’l Community, UN, World Bank: cannot act on it?

3

Outline -- Press Freedom: approached within a Governance Evidence-Based Context

1. Broadening the Press Freedom perspective – a Governance Framework, for Media Development

2. Data & Evidence-Based Analysis: Agent of change3. Governance and Press Freedoms: improved recently?4. Press Freedom less corruption & poverty?5. Determinants of Press Freedom: Combined Judicial/

Legal, Regulatory, Ownership,& Political Determinants6. Independence, Competition, and Financial Viability7. Transparency Reforms, + IT revolution: new frontiers?

8. Role of State, Corporates, Int’l Orgs for Media

4

The Power of Data• Country and international indicators: towards

improved internationally comparable indicators on media freedom and governance– New data is available but not well publicized– Journalists can play a key role by tracking how

countries are doing, holding politicians accountable– Journalists can offer not only disclosures but provide

analysis and provoke debate about solutions• Media Industry and Firm-Level indicators:

data disclosure (including on real ownership)

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Six Dimensions of GovernanceGovernance as the set of traditions and institutions by

which authority in a country is exercised -- specifically:• The process by which those in authority are selected

and replaced – VOICE AND ACCOUNTABILITY – POLITICAL STABILITY & ABSENCE OF

VIOLENCE/TERRORISM• The capacity of government to formulate and

implement policies– GOVERNMENT EFFECTIVENESS– REGULATORY QUALITY

• The respect of citizens and state for institutions that govern interactions among them – RULE OF LAW – CONTROL OF CORRUPTION

6

Control of Corruption: one Aggregate Indicator (selected countries from 204 worldwide, for illustration, based on 2004 research data)

-2.5

0

2.5EQ

UA

TOR

IAL

GU

INEA

KO

REA

, NO

RTH

TUR

KM

ENIS

TAN

UZB

EKIS

TAN

TAJI

KIS

TAN

BA

NG

LAD

ESH

VEN

EZU

ELA

ZAM

BIA

RU

SSIA

KO

REA

, SO

UTH

MA

UR

ITIU

S

SOU

TH A

FRIC

A

GR

EEC

E

ITA

LY

BO

TSW

AN

A

SLO

VEN

IA

CH

ILE

FRA

NC

E

SPA

IN

UN

ITED

KIN

GD

OM

NET

HER

LAN

DS

NO

RW

AY

NEW

ZEA

LAN

D

FIN

LAN

DPoor Governance

Governance Level

Margins of ErrorGood

Governance

Source for data: : 'Governance Matters IV: Governance Indicators for 1996-2004’, D. Kaufmann, A. Kraay and M. Mastruzzi, (http://www.worldbank.org/wbi/governance/govdata/); Colors are assigned according to the following criteria: Dark Red, bottom 10th percentile rank; Light Red between 10th and 25th ; Orange, between 25th and 50th ; Yellow, between 50th and 75th ; Light Green between 75th and 90th ; Dark Green above 90th.

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Control of Corruption, 2004: World Map

Source for data: : 'Governance Matters IV: Governance Indicators for 1996-2004’, D. Kaufmann, A. Kraay and M. Mastruzzi, (http://www.worldbank.org/wbi/governance/govdata/); Colors are assigned according to the following criteria: Dark Red, bottom 10th percentile rank; Light Red between 10th and 25th ; Orange, between 25th and 50th ; Yellow, between 50th and 75th ; Light Green between 75th and 90th ; Dark Green above 90th.

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Control of Corruption: No worldwide improvement[Averages for various individual sources]

0.2

0.5

0.8

1996 1998 2000 2002 2004

EIU

PRS

QLM

Poor

Good

PRS country coverage in 1996: 129, all other periods 140; QLM and EIU country coverage: 115 for all periods.

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Voice & Accountability, 2004 (Selected Countries)

-2.5

0

2.5M

YAN

MAR

KORE

A, N

ORT

H

ERI

TREA

TUR

KME

NIS

TAN

SUD

AN

UZB

EKI

STA

N

SYRI

A

SO

MA

LIA

BEL

ARU

S

ZIM

BAB

WE

PAKI

STA

N

EGYP

T

RUS

SIA

VEN

EZU

ELA

MA

DAG

ASC

AR

INDI

A

GHA

NA

ARG

ENTI

NA

KORE

A, S

OUT

H

SOUT

H AF

RIC

A

GRE

ECE

MA

URIT

IUS

URUG

UAY

CHIL

E

EST

ONI

A

PO

LAND

HUNG

ARY

GE

RMAN

Y

NETH

ERL

AND

S

FINL

AND

NO

RWAY

DENM

ARKPoor

Governance

GovernanceLevel

Margins of Error

Good Governance

Source for data: : 'Governance Matters IV: Governance Indicators for 1996-2004’, D. Kaufmann, A. Kraay and M. Mastruzzi, (http://www.worldbank.org/wbi/governance/govdata/); Colors are assigned according to the following criteria: Dark Red, bottom 10th percentile rank; Light Red between 10th and 25th ; Orange, between 25th and 50th ; Yellow, between 50th and 75th ; Light Green between 75th and 90th ; Dark Green above 90th.

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Changes in Voice and Accountability, 1996-2004

-2

0

2

IVO

RY

CO

AST

ZIM

BA

BW

E

HA

ITI

NEP

AL

C. A

FR. R

EP.

KYR

GYZ

REP

.

ERIT

REA

RU

SSIA

VEN

EZU

ELA

BEL

AR

US

CU

BA

MYA

NM

AR

UZB

EKIS

TAN

PHIL

IPPI

NES

BO

LIVI

A

YEM

EN

JAM

AIC

A

SRI L

AN

KA

BU

RU

ND

I

BR

AZI

L

AZE

RB

AIJ

AN

ALB

AN

IA

RO

MA

NIA

TAN

ZAN

IA

ESTO

NIA

EL S

ALV

AD

OR

BU

LGA

RIA

LATV

IA

GA

MB

IA

MEX

ICO

SIER

RA

LEO

NE

IND

ON

ESIA

GH

AN

A

BO

SNIA

NIG

ERIA

SLO

VAK

REP

.

CR

OA

TIA

SER

BIA

Changes were calculated on the basis of the differences in country estimates from 1996 and 2004. Classification for major deteriorations and improvements were based on 75% confidence interval. Source for data: http://www.worldbank.org/wbi/governance/govdata/.

Major Deterioration

(selected countries)

Major Improvement

(selected countries)

Insignificant Change

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Political/Civil Rights in Africa, 1975-2005

0

10

20

30

40

50

60

70

80

1975 1985 1995 2005

Perc

enta

ge C

ount

ries

% Not Free% Partially Free% Free

Source: Freedom House. Y-axis reports percentage of countries within the region with a free/partially free/not free rating, associated with scores in political rights and civil liberties.

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Press Freedom in Sub-Saharan Africa, 1995-2005

0

10

20

30

40

50

60

70

80

Y1995 Y1996 Y1997 Y1998 Y1999 Y2000 Y2001 Y2002 Y2003 Y2004 Y2005

Perc

enta

ge C

ount

ries

% Not Free% Partially Free% Free

Source: Freedom House. Y-axis reports percentage of countries within the region with a free/partially free/not free rating, associated with scores in press freedom.

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Press Freedom (FRH) in the Middle East and North Africa 1995 vs. 2004: Deteriorating? [Freedom House Data]

65

25

10

Not FreePart FreeFree

Source: Freedom House. Y axis measures percentage of countries in the region with free press (rating of 30 or below), partly free (ratings between 30 and 60) and not free (rating above 60).

% countries in 1995

85

5

10

Not Free

Part Free

Free

% countries in 2004

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Press Freedom in the World, 1995 vs. 2004: Stagnant?

32

34

34

Not Free

Part Free

Free

% countries in 1995

Source: Freedom House. Y axis measures percentage of countries in the region with free press (rating of 30 or below), partly free (ratings between 30 and 60) and not free (rating above 60).

36

26

38

Not Free

Part Free

Free

% countries in 2004

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Corruption is lower when the Press is Free

UGA TUV

TKM

TUR

TUN

TTO

TON

TGO

TMPTHA

TZA

TJK

TWN

SYR

CHESWE

SWZ

SUR

SDN

VCTLCAKNA

LKA

ESP

ZAF

SOM

SLB

SVN

SVK

SGP

SLE

SYC

YUGSEN

SAU

STP

SAM

RWA

RUS

ROM

QAT

PRT

POL

PHL

PER

PRYPNG

PAN

PAK

OMN

NOR

NGA

NER

NIC

NZL

NLD

NPL

NAM

MMR

MOZ

MAR

MNG

MDA

FSMMEX

MUS

MRT

MHL

MLT

MLI

MDVMYS

MWI

MDG

MKD

LUX

LTU

LIE

LBY LBR

LSO

LBN

LVA

LAO

KGZ

KWT

KOR

PRK

KIR

KEN

KAZ

JOR

JPN

JAM

CIV

ITAISR

IRL

IRQ

IRN

IDN

IND

ISL

HUN

HND

HTI

GUY

GNBGIN GTM

GRDGRC

GHA

DEU

GEO

GMBGAB

FRA

FJI

ETH

EST

ERI

GNQ

SLVEGY

ECU

DOM

DMA

DJI

DNK

CZE

CYP

CUB

HRV

CRI

ZAR

COGCOM

COL

CHN

CHL

TCD

CAF

CPV

CAN

KHM

BDI

BFA

BGR

BRN

BRA

BWA

BIH

BOL

BTN

BEN

BLZ

BEL

BLR

BRB

BGD

BHR

BHS

AZE

AUT AUS

ARMARG

ATG

AGO

ADO

DZA

ALB

AFG

-3

0

3

0 20 40 60 80 100Press Freedom

Cor

rupt

ion

Low

Low High

High Corruption

Source for control of corruption: : 'Governance Matters IV: Governance Indicators for 1996-2004’, D. Kaufmann, A. Kraay and M. Mastruzzi, (http://www.worldbank.org/wbi/governance/govdata/). Source for Press Freedom: Freedom House.

r = 0.67

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Control of Corruption vs. Freedom of the Press

-1.25

-0.75

-0.25

0.25

0.75

1.25

Not Free Partially Free FreePress Freedom

Con

trol

of C

orru

ptio

n

Good

r = 0.67

Source for Control of Corruption: : 'Governance Matters IV: Governance Indicators for 1996-2004’, D. Kaufmann, A. Kraay and M. Mastruzzi, (http://www.worldbank.org/wbi/governance/govdata/); Source for Press Freedom: Freedom House. Terciles divided according to Press Freedom ratings (192 countries total). Free: 0-30 (39); Partly Free: 31-60 (63); Not Free: 61-100 (90).

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The 300% Development Dividend From Controlling Corruption: Lowering Corruption increases Incomes per

capita 3-fold (and not viceversa)

High Corruption Medium Corruption Low Corruption

$300

$3,000

$30,000

Data Source for calculations: KK 2004. Y-axis measures predicted GDP per capita on the basis of Instrumental Variable (IV) results for each of the 3 categories. Estimations based on various authors’ studies, including Kaufmann and Kraay.

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Finland0

20

40

60

80

100

120

140

160

180

200

-2 -1 0 1 2'Voice' (including freedom of the press), Civil

Liberties and Accountability

Infa

nt M

orta

lity

Voice & Press Freedoms also Matter for Lowering Infant Mortality

Source: KKZ 1999

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Elections do not guarantee Freedom of the Press Data from Freedom House on Electoral Democracies 2000

FH ‘ELECTORAL DEMOCRACIES’ FH ‘NON ELECTORAL DEMOCRACIES’

FREE PRESS

PARTLY FREE PRESS

NOT FREE PRESS

Bahamas, Barbados, Belize, Benin, Bolivia, Botswana, Bulgaria, Chile, Costa Rica, Czech Republic, Dominica, Dominican Republic, Estonia, Grenada, Guyana, Hungary, Israel, Jamaica, Kiribati, Latvia, Lithuania, Mali, Malta, Marshall Islands, Mauritius, Micronesia,Mongolia, Nauru, Panama, Papua New Guinea, Philippines, Poland, Samoa, Sao Tome and Principe, Slovak Republic, Slovenia, SolomonIslands, South Africa, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Thailand, Trinidad and Tobago, Uruguay

Albania, Argentina, Armenia, Bangladesh, Brazil, Cape Verde, Colombia, Croatia, Ecuador, El Salvador, Fiji, Georgia, Ghana, Guatemala, Guinea-Bissau, Haiti, Honduras, India, Indonesia, Macedonia, Madagascar, Malawi, Moldova, Mozambique, Namibia, Nepal, Nicaragua, Nigeria, Paraguay, Romania, Russia, Seychelles, Sierra Leone, Turkey, Ukraine, Vanuatu, Venezuela

Antigua and Barbuda, Bosnia-Herzegovina, Burkina Faso,Comoros, Gabon, Jordan, Kuwait, Lesotho, Mexico, Morocco, Pakistan, Peru, Senegal, Tanzania, Uganda, Serbia

Central African Republic, Djibouti, Kyrgyz Republic, Liberia, Niger,, Sri Lanka, Togo

Afghanistan, Algeria, Angola, Azerbaijan, Bahrain, Belarus, Bhutan, Brunei, Myanmar, Burundi, Cambodia, Cameroon, Chad, China, Congo, Congo, Dem. Rep., Ivory Coast, Cuba, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Guinea, Iran, Iraq,Kazakhstan, Kenya, North Korea, Laos, Lebanon, Libya, Malaysia, Maldives, Mauritania, Oman, Qatar, Rwanda, Saudi Arabia, Somalia, Sudan, Swaziland, Syria, Tajikistan, Gambia, Tunisia, Turkmenistan, United Arab Emirates, Uzbekistan, Vietnam, Yemen, Zambia, Zimbabwe

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The Central European ‘Laboratory’

• An industry transformed in short period of time• New legislation enacted• State owners replaced by investors, foreign and

domestic• Some journalism of excellent quality takes hold• Emergence from the dark: data on a promising

new industry

21

Media Development and Press Freedom: A Case study in Poland: Rzeczpospolita

• Government sold stake in Party daily (1991)• Civil Liberties and Press Freedom soared• Managers did management training• Journalists studied economics• Beefed up economic & Business coverage• Advertising revenues soared, spurred by

strong demand for business page• Today newspaper is independent, profitable

22

Eastern Europe Media: Advertising Expenditure [Index: 1994=100]

0100200300400500600700800900

1994 1995 1996 1997 1998 1999 2000

Czech RepublicHungaryPolandRussiaSlovenia

Source: World Association of Newspapers: World Press Trends 2001

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A Media Capacity Development Program Illustration: Russia/CIS program [CIDA, WB, MDLF, et al]

• Needs assessment done in 2000 identified business environment as the major constraint

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

• Worked with 500 regional newspapers and media outlets, trained 2600 managers of local and regional newspapers over three years

• Focus: Financial independence, management• Continuing as independent network of private

media consultants

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For Press Freedom, 10 critical points:1. Evidence-Based, & impact on Corruption and Poverty2. Political environment (Freedom of Expression, etc)3. Diversify Ownership and Competitiveness Reforms4. New Technologies for competition: web, cell, radio5. Regulatory, Legal and Economic environment 6. Transparency reform framework: New frontiers 7. Quality journalism, plurality of news sources8. Business management and plurality of revenue

sources – Financial Sustainability9. Broad Governance & Media Development Framework10. Role for foreign FDI, IFI/World Bank, Donors

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Power of Media, Transparency and Data for Development• “If you cannot measure a problem, you cannot address it.”

Lord Kelvin• “Empirical research shows that countries that defend civil

liberties and protect freedom of the press do a better job tackling corruption. A free press matters for accountability and therefore for development”

Paul Wolfowitz, President of the World Bank• “There has never been a famine in any country that has

been a democracy with a relatively free press.”Amartya Sen, Nobel Laureate

………………………………………………………………….

In sum: Traversing towards a more ambitious era on Media Freedom: to combat the $1 trillion dollar corruption industry, and for development and tackling poverty -- for the sake of over one billion people that live with less than 2 dollars a day