Economic analyses of the media have abounded lately. Many of these papers consider the role of mass media in economic development. A few years ago, Chris (Coyne) and I published a paper on this topic in Kyklos. We now have a new paper related to this theme entitled, "Manipulating the Media," forthcoming in Institutions and Economic Development. Using original fieldwork Chris and I collected in Romania, we provide a detailed anatomy of state-controlled media.
While previous analyses have focused almost exclusively on state ownership of media outlets, Chris and I find that this is not the dominant or most important mechanism government uses to manipulate media-provided information. We examine the more prominent methods government uses to manipulate the media and assess their damage using Romania as a case study. Our analysis suggests that policy aimed at reducing the media's dependence on government in much of the developing world, which focuses exclusively on state ownership of media outlets, is bound to fail. Effective policy along these lines must consider the more prominent and insidious channels of media manipulation the state uses to influence the flow of information reaching citizens.
For those interested in economic analyses of the media not related to development, take a look at Jesse Shapiro and Matt Gentzkow's new paper, "Media Bias and Reputation," forthcoming in the Journal of Political Economy. Here, Jesse points out that even in the absence of government manipulation, the news may be biased. Grossly oversimplifying his argument, consumers may take news stories that are consistent with their prior beliefs as a signal of the quality of the news outlet providing the story. This occurs despite the fact that the story is objectively inaccurate. If news outlet's are profit driven, they will therefore be led to provide biased news in this fashion. The paper points out that this effect is attenuated when news competition is present, but some bias may persist.