Media as a Mechanism of Institutional Change

Abstract

A large literature establishes the connection between institutions and economic performance. Comparatively little work, however, explores the process of institutional change. How do development-enhancing institutions emerge where they do not already exist? This paper investigates this question by examining the role of mass media as a mechanism of institutional change. Our analysis considers three case studies: Mexico, Russia, and Poland. We find that a free media facilitates institutional change in the direction of liberal economic and political institutions. In contrast, where government owns or controls the media, media's ability to facilitate such change is constrained.

Full text

Media as a Mechanism of Institutional Change
Christopher J. Coyne∗
West Virginia University
Department of Economics
P.O. Box 6025
Morgantown, WV 26506
chris.coyne@mail.wvu.edu
Peter T. Leeson
George Mason University
Department of Economics, MSN 3G4
Fairfax, VA 22030
pleeson@gmu.edu
Abstract
A large literature establishes the connection between institutions and economic performance.
Comparatively little work, however, explores the process of institutional change. How do
development-enhancing institutions emerge where they do not already exist? This paper
investigates this question by examining the role of mass media as a mechanism of institutional
change. Our analysis considers three case studies: Mexico, Russia, and Poland. We find that a
free media facilitates institutional change in the direction of liberal economic and political
institutions. In contrast, where government owns or controls the media, media’s ability to
facilitate such change is constrained.
JEL Codes: O1, P2, Z0
Keywords: media, institutional change, economic development
∗ Corresponding author.

1 Introduction
A large literature establishes the connection between institutions and economic performance
(see, for instance, Acemoglu, Johnson and Robinson 2001, 2002; Acemoglu and Johnson 2005;
Davis and North 1971; North 1961, 1990; North and Thomas 1973; Rodrik, Subramanian and
Trebbi 2004). Institutions can be understood as the formal and informal rules governing human
behavior, and the enforcement of these rules (North 1990). Formal institutions include codified
institutions that are intentionally designed. Examples include state-made constitutions, rules and
legislation. In contrast, informal institutions evolve over time and are not the result of
intentional design. They include, for example, norms, conventions, mores and what is generally
referred to as culture. The literature on institutions and economic performance finds that what
might be called “liberal institutions” rooted in well-protected private property rights, the rule of
law, and effective checks on politicians’ behaviors, are key ingredients of economic
development.
Given the importance of liberal institutions for economic performance, a critically
important question is, how do quality institutions emerge where they do not already exist? How
do countries currently characterized by poor quality institutions turn the corner toward economic
progress and development? What mechanisms contribute to, or prevent, the evolution of liberal
institutions? Important work by North (1990, 2005), David (1994), Aoki (2001, 2007), Young
(1998), Greif (1994), Greif and Laitin (2004) and others examines institutional change.
However, for the most part this research is concerned with the evolution of institutions generally,
as opposed to the evolution of specifically liberal institutions that the large and growing
development literature pointed to above finds to be the critical ingredient of economic progress.
Further, none of this research considers the potentially significant role that mass media may play
2

as a mechanism facilitating or undermining institutional evolution in the direction of liberal
institutions of economic development.
Our goal in this paper is to fill this existing gap in the literature by exploring the role of
an independent media as a mechanism of institutional change.1 Our core thesis is that a free
media allows for institutional evolution and the possibility of institutional change toward liberal
economic and political institutions. As such, a free media is a critical ingredient in the complex
recipe of economic development. In contrast, where media is owned or heavily manipulated by
the state, it is constrained in its ability to facilitate institutional change toward liberal institutions.
We utilize the term “media” in the broadest sense to include the press, television, and radio, as
well as more recent media mediums, such as the Internet.
An existing literature explores the connection between the media and economic
development. This literature can be placed in two broad categories. The first strand focuses on
the role of media as a mechanism for monitoring the actions of political actors (see Besley and
Burgess 2002; Besley and Prat 2006; Coyne and Leeson 2004; Leeson and Coyne 2005, 2007;
Sen 1984, 1999). The main conclusion of this literature is that a free media, coupled with
political competition, provides a potential solution to the principal-agent problem facing voters.
The second strand of literature explores the economic implications of various forms of media
ownership (see, for instance, Djankov et al. 2003). The main finding of this strand of literature is
that higher levels of state ownership are associated with lower levels of primary school
enrollment, lower levels of political rights and lower levels of civil liberties. Further, countries
1 Media freedom or media independence is the degree to which governments control or influence the flow of media-
provided information reaching their citizens. Freedom House produces an annual Freedom of the Press report that
measures media freedom in countries across the globe. The Freedom House index measures countries’ media
freedom by considering their legal environment, political environment, and economic environment.
3

with higher levels of state ownership of media tend to be poorer and more autocratic, and have
higher levels of corruption.
To date, no one has made the connection between the literatures emphasizing the
importance of institutions for economic performance and that emphasizing the importance of a
free media for economic outcomes. We fill this gap by analyzing the connection between a free
media and institutional change. Specifically, we consider how the media can serve as a
coordination-enhancing mechanism that can create common knowledge around new beliefs,
ideas and institutions. We also focus on the impact of private ownership versus state ownership
of the media influences the process of institutional change. We explore detailed case studies in
Mexico, Russia and Poland to provide evidence for to investigate the role of the media in
facilitating institutional change.
Our contribution in this paper is twofold. On the one hand, we contribute to the research
that establishes the connection between institutions and economic performance by providing a
potential mechanism for establishing institutions in societies where they do not exist. On the
other hand, we contribute to the work that explores the connection between the media and
economic performance by considering how a free media versus a state owned or state-
manipulated media influences the process of institutional change.
In Section 2 we describe the process of institutional change and what this process entails.
Section 3 makes the connection between the media and process of institutional change explicit.
We focus specifically on how the media can generate widespread common knowledge around
new institutions. Section 4 consists of three detailed case studies, which illuminate the media as
a mechanism of institutional change. Section 5 concludes.
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2 The Process of Institutional Change
Institutions that exist in the current period are the result of past choices and experiences (North
1990; David 1994; Boettke, Coyne and Leeson 2008). Along these lines, a growing literature
focusing on institutional path dependency emphasizes that the way institutions and beliefs
developed in past periods constrains the set of feasible choices in the current period (North 1990:
93-8, 2005: 51-2). North (2005) places informal institutions, and especially belief systems, at the
core of the process of institutional change. He notes that “the process works as follows: the
beliefs that humans hold determine the choices they make that, in turn, structure the changes in
the human landscape” (2005: 23). This suggests that if we wish to understand institutional
differences and institutional change, we must start with the mental models or belief systems
guiding individual actions.
In this context, institutional change entails shifts in fundamental belief systems. As
North (2005) makes clear, individuals rely on an incomplete mental model since they cannot
know the full range of possible opportunities that currently exist or will exist in the future. As
individuals become aware of alternative courses of actions they incorporate those possibilities
into their mental models. When new alternatives are introduced, or the relative prices of existing
alternatives change, mental models are updated and institutions evolve.
Understanding the process of institutional change thus entails identifying mechanisms
that change the fundamental belief systems of the members of a society. We argue that the
media is one such mechanism. Given its potential to reach a large number of consumers, the
media has the ability to change fundamental belief systems by making individuals aware of
alternative courses of action. The media can provide information that allows individuals to
update their belief systems. Media can also produce common knowledge so that each individual
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can be confident that others are updating their mental models as well. This allows for
widespread coordination around institutional change.
It is important to note that the evolution of belief systems is endogenous and takes place
within an existing structure of formal and informal institutions. This existing structure will
influence and constrain the evolution of institutions. In order for formal institutions to operate
effectively, they must be supported by informal institutions. However, formal institutions –
whether supported by informal institutions or not – will influence the evolution of informal
institutions.
When there is a disjuncture between formal and informal institutions, the formal
institutions will fail to operate in the desired manner (Boettke, Coyne and Leeson 2008).
Perhaps the best example of this is the work of Hernando de Soto (1989). In his analysis of the
Peruvian economy, de Soto found a large informal economy characterized by well-defined
property rights and cooperation. Peru’s formal institutions were characterized by extensive
corruption and inefficiencies and failed to recognize these informal property arrangements.
According to de Soto, this disjoint between the formal and informal stifled the Peruvian
economy. The purpose of formal institutions, such as courts, is to reduce the costs of interaction
and exchange. In the case of Peru and many other undeveloped countries, the disjoint between
the formal and informal has the opposite effect and actually increases the costs of interaction and
exchange. Instead of facilitating trade, individuals have to actively avoid the predation of those
abusing formal institutions.
While informal institutions constrain the effectiveness of formal institutions, existing
formal institutions simultaneously influence and constrain the evolution of informal institutions.
They do this by establishing and enforcing the formal rules through which individuals are
6

exposed to alternative beliefs and possibilities. To understand this point, consider that dictators
expend a great deal of resources controlling the media and dissemination of information in their
countries. Their aim is to restrict their citizens’ awareness to alternative institutional
possibilities. If a dictator prevents those living under him from being exposed to alternative
forms of economic, political and social organization, citizens are unable to incorporate those
alternatives into their belief systems. Because of this, the evolution of informal institutions, and
hence formal institutions, is curtailed.
3 Media as a Mechanism of Institutional Change
The process of institutional change involves fundamental shifts in the belief systems of members
of a society. This process requires members of society to coordinate on a new belief system
equilibrium. For such changes to be self-sustaining a wide number of individuals must be
willing to coordinate on the change. For example, in order for property rights to emerge, people
must have some shared understanding of what those rights entail. The widespread coordination
necessary for institutional change presents a “coordination problem” that must be solved.
The easiest way for people to overcome coordination problems is to communicate with
one another. But simply communicating is not enough. Since widespread adoption of the norm
or rule requires reciprocation, each person must be confident that others will respond in kind.
Continuing with the property rights example, each person involved must be confident that if he
respects the property of others, others will respect his property rights as well. Common
knowledge entails each person knowing the relevant information, but also the knowledge that
other people know the same information, and those other people knowing that others are aware
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of this information, and so forth. When common knowledge exists, people can be confident that
everyone involved shares some core information and expectations.
The nineteenth-century French author Alexis de Tocqueville recognized the role of media
in producing such common knowledge when he wrote, “Only a newspaper can put the same
thought at the same time before a thousand readers…A newspaper is not only able to suggest a
common plan to many men; it provides them with the means of carrying out in common the
plans that they have thought of for themselves” (1835-1840: 517-518). More recently, Webster
and Phalen note that “it is likely that people watching a media event know that a vast audience is
in attendance. Such awareness is part of the event’s appeal, and the media are generally eager to
report the estimated worldwide attendance” (1997: 120). What these authors point out is that the
media not only informs individuals directly, but also influences their knowledge and opinions of
the information possesses by others. In other words, the media produces common knowledge.
The importance of finding a solution to the coordination problem for the sustainability of
political institutions has been emphasized in previous work. For example, Weingast (1995,
1997) emphasizes that the process of citizens establishing limitations on government involves a
coordination problem. An array of citizens with potentially different views must agree on the
appropriate limits of government activity. Weingast argues that an appropriate set of public
rules, usually codified in the form of a constitution, can serve as such a coordination device to
overcome this problem. He concludes that “a central step in the creation of limited government
is that citizens or their representatives construct a mechanism that solves the coordination
problem” (1995: 15). Our argument is that a free media is one such mechanism.
Along similar lines, Hardin (1999) notes the importance of the coordination problem in
establishing and maintaining institutions. He suggests that if an “institution is work relatively
8

well, it must be designed for the citizen with modal incentives to coordinate. And it will likely
require backup institutions to enforce its coordination” (1999: 14). The media is one such
supporting institution that can reinforce existing institutions while simultaneously contributing to
the evolution of those and new institutions.
A free media—one that is largely independent of government—is not a guarantee of
successful institutional change toward economic development. Although such a media is an
important part of the development equation, it is by no means the only part. Other factors –
historical experiences, political stability, a stable economic environment outside of the media
industry, quality of the media, education, ideology, interest in politics, willingness to punish
ineffective politicians, etc. –also play important roles in creating economic progress. Stated
differently, a free media exists within a broader, existing institutional context. These existing
institutions may contribute to the effectiveness of a free media but they may also constrain its
effectiveness.
However, a free media does offer societies the potential for institutional change and
evolution while a state-owned or manipulated media constrains this potential. Where widespread
state ownership and manipulation of the media exists, state officials will tend to use the media to
maintain the status quo, including their hold on power. In such circumstances the aim is to
prevent institutional change, which is why significant resources are typically expended to control
the media and flow of information reaching citizens.
4 Evidence of Media as a Mechanism of Institutional Change
To investigate our hypothesis we consider three case studies. Given that the trajectory of a
country’s media cannot be separated from its political, economic and social contexts, this method
9

is fitting for our topic of study. For each case we consider the historical background of the
media, the factors that contributed to increases or decreases in media freedom, and the impact of
the media on the evolution of institutions in the country under consideration.
First, we consider the case of media in Mexico and focus specifically on the process
through which Mexican media independence has increased. The increase in Mexican media
independence is clear when the current media situation is compared to that which prevailed in
previous decades. This increase in freedom has allowed the media to contribute to the adoption
of institutions conducive to Mexican growth and development.
After examining Mexico, we explore the role of media in two transition countries –
Russia and Poland. The transition of formerly communist countries provides an interesting
laboratory to study the role of media in institutional change (Carrington and Nelson 2002: 232;
Leeson and Coyne 2007). In each case we focus on the role of media prior to the collapse of
communism to understand how it was embedded in the larger economic, political and social
context of the countries we consider. We then explore what happened to the media following the
collapse of communism in each country. Our analysis pays special attention to the array of
factors that contributed to, or prevented, the emergence of media as a mechanism of institutional
change toward liberal institutions in these countries.
4.1 Mexico
Historical Background of the Mexican Media
From the 1930s through the late 1990s Mexico was ruled by the Institutional Revolutionary Party
(PRI). Although the PRI presented the image of a regime upholding liberal democratic values, in
practice this image was far from true. Opposition parties were repressed and elections were
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fraudulent. In the absence of checks and balances, the PRI’s hold on power was self-enforcing
due to a complex system of corruption that benefited members of the PRI at the expense of
Mexican citizens. Peruvian author Mario Vargas-Llosa (1991) dubbed the political system of
Mexico “the perfect dictatorship” because of the stability of the PRI’s grasp on power.
However, several major events weakened the PRI’s established position over a two
decade period. The first event was the economic downturn in the early 1980s. Leading up to
this period, most Mexican industries were nationalized and relied heavily on government
subsidies. The magnitude and extent of these subsidies placed the government under increasing
financial pressure, especially during the economic downturn. Further, corruption dominated the
political system and the weight of this corruption stifled the productive aspects of the economy.
In short, the state apparatus became so large and expensive that the Mexican economy could no
longer afford to support it (see Lawson 2002: 16-18). This led to national bankruptcy in 1982,
which in turn led to calls for significant economic reforms. The bankruptcy and associated
demand for change generated a series of economic reforms under President Carlos Salinas (1988
– 1994) that were aimed at allowing the PRI to maintain its position of power in the wake of the
public’s calls for change.
A related factor in the weakening of the PRI was a shift in Mexico’s demographics. Two
key reasons that the PRI regime had been able to maintain its position of power was stable
economic growth and the presence of a large number of peasants that were directly dependent on
the state for survival. However, the unintended consequence of economic growth was the
creation of a large middle class. Over time, the number of poor peasants in Mexico fell while the
number of those in the middle class increased. This growing middle class that characterized
Mexico in the 1980s was less dependent on the state and more skeptical of the PRI regime. The
11

result was that the regime was able to maintain its grasp on power, but only through increased
fraud and political manipulation.
Of interest for our analysis is the role that media played both in weakening the PRI’s hold
on power and the related institutional change that took place over the course of several decades.
During the PRI’s rule the media played the same role that it does under any authoritarian regime.
Simply put, it was viewed and utilized as a mouthpiece of the ruling elite (Hughes 2006: 50-53).
Broadcasting and advertising contracts were given to those media outlets that provided favorable
coverage of the PRI. Further, many political elites owned large stakes in media outlets. It is
important to note that most media was not explicitly state owned. Instead, the media was largely
controlled by private owners who were sympathetic supporters of the ruling regime. In this
manner the media was officially “independent,” but in reality was manipulated by government
through indirect means such as bribes, lucrative state contracts, state ownership of key media
infrastructure, and other financial pressures such as tax breaks and discounts for use of the state
operated news agency, Notimex.
To provide some concrete examples of this dynamic, consider the following.
Government advertising contracts accounted for about half of all advertising revenue for the
Mexican print media and were the main source of advertising revenues for broadcast media.
From the 1930s until the 1990s the production of newsprint remained under the monopolistic
control of the government company PIPSA. President Carlos Salinas privatized a previously
state-owned television network but demanded that his older brother, Raúl Salinas, be a silent
partner. Along similar lines, Salinas awarded most of the main radio contracts during his
presidency to his brother Raúl who operated several stations (Lawson 2002: 30-33).
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The array of indirect government interventions in the media allowed the PRI to utilize the
media to coordinate Mexican citizens around its policies. As such, the media played a central
role in legitimizing the PRI’s rule, which was a key factor in its sustainability over a period of
several decades. To understand the evolution of the independence of Mexico’s media, it is
important to reiterate that while the state was involved in the media through indirect means,
independent media outlets could and did exist and sustain as long as they did not openly criticize
the PRI. Of course, there were very few truly independent media outlets given the reliance on
government advertising revenues and other financial pressures associated with the government.
But the key is that there were many media outlets that while indirectly connected to the ruling
regime, were not heavily influenced by the regime. It is within this context that a more
independent Mexican media emerged.
The Rise of Media Independence in Mexico
Lawson (2002: 67-91) provides several key reasons for the emergence of Mexican press
independence between the mid 1970s and the late 1990s. One factor was the presence of a
grassroots movement of journalists, beginning in the 1970s, who were willing to provide more
balanced reporting including open criticisms of the ruling regime. The newspaper Excélsior had
been the main outlet for this type of reporting in the 1970s, but the government replaced the
paper’s editorial board with a more pro-government staff in the late 1970s (Hughes 2006: 83 and
Lawson 2002: 66-67). Upon being forced out of their positions at Excélsior, the editors started
other independent publications throughout Mexico. The most successful of these was Proceso,
which became Mexico’s main news oriented magazine. The numerous publications started by
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the former members of the Excélsior provided the foundation for Mexico’s increased media
independence.
The economic downturn in the 1980s and the resulting economic and political reforms
aimed at liberalization was another key factor in media independence. Liberalization influenced
press independence on two margins. First, liberalization influenced the economic and political
environment media outlets faced. Increased liberalization allowed media outlets greater
independence in expanding their operations and seeking alternative sources of financing, while
also increasing competition in the broader media industry. As Hughes notes, “political and
economic liberalization…unleashed a second wave of newspaper transformations based on a
diffusion of innovation from the civic-oriented core” (2006: 40). The second margin is that
consumers started to demand more coverage of reforms and changes in the political and
economic realms. This shifted the focus of reporting and reinforced the liberalization that was
taking place.
Of course, one must not attribute the rise of media independence solely to the economic
downturn and resulting reforms. It is important to keep in mind that the PRI continued to control
all key forms of government through 1997. As mentioned, the motivation behind the economic
reforms undertaken under President Salinas was to allow the PRI to continue to maintain its
position of power in the face of the economic downturn and call for reforms by the public.
Nonetheless, the liberalization following the downturn promoted media freedom via the two
margins discussed above.
Another factor in the evolution of the Mexican media was changes in journalist norms
over the 1970-1997 period. During this time there was a shift in journalist norms towards true
independence, separate from direct and indirect state manipulation. Part of this shift can be
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linked to the economic collapse of the 1980s. Because of the media’s reliance on government
for financial support, the downturn and national bankruptcy in the early 1980s forced many
media outlets to become less dependent on the government. This is not to say that government
influence and support fell to zero. Far from it, the government continued to remain actively
involved in the media industry mainly through indirect manipulation. Nonetheless, the economic
crisis led to the realization by many journalists and media employees that government
involvement was not a guarantee of sustainability and financial success.
Influence from abroad also impacted journalistic standards and norms in Mexico.
Several key Mexican journalists spent time in the United States and Europe. During their time
abroad these journalists observed the journalistic practices and ethics in these other countries and
brought them home to Mexico. To some degree, the norms present in other countries were
imported into Mexico and influenced domestic journalistic standards and norms. In addition to
Mexican journalists spending time in other countries, the economic liberalization opened up
Mexican borders to outside sources of information. As Hughes notes, “liberalizing trade
increased flows of information from abroad, which, in turn, made more journalists come into
contact with information that shook tacit understandings of the world” (2006: 41). These
external influences exposed Mexican media outlets to alternative sources of information and
alternative views of media organization and reporting.
International media also played a role in Mexico’s media transformation through
partnerships with domestic broadcasting corporations. For example, the American-based
National Broadcasting Corporation (NBC) invested in Televisión Azteca following its
privatization in 1993. In addition to financial support, NBC also provided news programming
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and other services to Azteca and was a key factor in making it the company commercially viable
after years of reliance on state funding.
Increased competition between newspapers and media outlets, coupled with the growth of
a strong private advertising sector, further contributed to media independence. There was a large
existing market for dissenting opinions and news that was critical of the government. For several
decades the PRI had been effective in silencing strong critics of its policies and actions. Starting
with the previously discussed Excélsior in the 1970s, independent publications critical of the
government began to emerge. The number of publications increased throughout the 1980s, and
by the 1990s a large number of critical and self-sufficient independent publications had emerged.
These papers relied solely on private subscriptions and advertising to finance their operations.
The increase in private advertisement was the result of the economic liberalization discussed
above, but also strong consumer demand for independent reporting. The development of the
private advertising industry had the dual effect of removing the dependence of media outlets on
government contracts and subsidies while simultaneously increasing the number of independent
publications that entered the market. As Lawson notes, “in a sort of cascade effect, the initial
success of independent publications encouraged the gradual transformation of the press as a
whole” (2002: 89).
As we pointed out above, over the period covering the 1930s through the 1990s, the size
of Mexico’s middle class grew. This was also a contributing factor to the ability of independent
media outlets to sustain themselves without government support. The increase in the middle
class meant increases in literacy and education and the associated demand for information. The
result was a lager market for news media and hence increased demand for related media
products.
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The Impact of Increased Media Freedom on Mexico’s Institutions
As the Mexican media became increasingly independent, so too did the diversity of topics and
viewpoints reported. Prior to the improvements in media freedom discussed above, the Mexican
media was viewed by the PRI as a tool for legitimizing its policies and actions. With the rise of
media independence and opposition voices, this became increasingly difficult.
In his analysis of the rise of Mexico’s independent press, Lawson (2002: 126) makes the
distinction between the “old regime” framing of politics and the “civic framing” of politics. The
former refers to the political regime under the PRI. The old regime views the political apparatus
as a means of rent-seeking and corruption benefiting the ruling elite. Civic framing, in contrast,
provides the opposite view. It is committed to critical discourse regarding the existing regime, as
well as alternative ideologies, institutions and regimes. It views politics as positive sum in
nature, benefiting the citizens of a country at large instead of the benefits accruing to a small
segment of the population.
According to Lawson, the rise of an independent media in Mexico led to a decrease in old
regime coverage and in increase in civic discourse. To see this more explicitly, consider Figure
1.
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0
10
20
30
40
50
60
70
80
1984 1986 1988 1990 1992 1994 1996
Year
Percentage of Coverage
Civic
Discourse
Old
Regime
Figure 1. Civic and old regime framings of politics in Proceso and La Jornada, 1984-19962
Figure 1 shows the coverage of old regime discourse versus civic discourse in two of Mexico’s
main periodicals, Proceso and La Jornada, during the 1984-1996 period. As the figure
illustrates, the percentage of old regime coverage was significantly less than the percentage of
coverage dedicated to civic discourse. This highlights a broader shift in media coverage
throughout the Mexican media (see Hughes 2006: 76-78).
In the early 1990s the Mexican government privatized key aspects of the television
industry. This led to increased competition and an increase in the diversity of coverage by media
outlets in order to maintain and increase market share (Lawson 2002: 105-106). This
competition forced established media outlets, which had traditionally been sympathetic
mouthpieces of the state, to diversify their coverage.
2 Source of graph, Lawson 2002: 129.
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Government corruption had been a central issue in Mexico for decades. The increase in
media independence served to check some of this corruption and coordinate Mexican citizens on
the need for new political leaders. Following the rise of media independence in Mexico, the
media started to cover not only corruption but also topic such as drug trafficking, political and
election fraud, and political intimidation.
As an example of this, consider the killing of political activists in Guerrero, Mexico in
1995 by state police. The media engaged in continued investigative journalism and reporting on
this story and eventually Guerrero’s governor and numerous other state officials were tried for
the murders. Local violence against political opposition and activists has been common for
decades, but in this case the media served as a monitoring device facilitating the punishment of
government officials.
At the national level the media exposed the inner workings of the political apparatus and
the channels through which the PRI utilized that apparatus to benefit its members at the expense
of Mexican citizens. For example, in the 1990s the media reported on numerous scandals
involving various members of the government and linked the web of corruption back to Raúl
Salinas, the older brother of Mexican President Carlos Salinas. The investigation of Raúl
Salinas’s financial dealings was used by political opposition, which further brought attention not
only to the corruption of the incumbent regime, but also to the workings of the political system
as a whole. The repetition of these stories by numerous media outlets generated common
knowledge around the rampant corruption, which served to delegitimize the PRI.
In addition to making corruption public, the media served to generate common
knowledge among citizens. Citizens were well aware that corruption existed throughout the
Mexican government. But until the media exposed the corruption, the exact nature and
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magnitude of corruption was not known. Media reporting on the inner workings of the
government led to erosion of public support for the PRI culminating in the party’s loss of the
legislative elections in July 1997. Largely because of media monitoring and pressure, the 1997
elections were considered the fairest in Mexico in decades. In 2000, Vicente Fox of the National
Action Party (PAN) was elected president of Mexico marking the first time the PRI had lost a
presidential election since its formation in 1929. Felipe Calderon, another PAN candidate,
succeeded Fox in 2006 as president of the country. Increases in media freedom played a major
role in this shift of power and institutional change in Mexico toward more liberal institutions.
4.2 Russia
Historical Background of the Russian Media
Russian media have a long history that can be traced back over several centuries. For the
purposes of our analysis the main period of interest begins in the early 1920s with the rise of the
Soviet Union. Newspapers played a central role in the Soviet propaganda system. Radio,
television and the cinema were also important parts of that system, but newspapers were the key
means of communication. To illustrate this, Table 1 shows the growth in newspaper circulation
in Russia over several decades starting with 1940.
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Year Number
of Titles Number
of Issues Daily Circulation
(thousand copies) Total circulation
(thousand copies)
Average daily
circulation of
newspaper
(thousand copies)
1940 5,730 604,268 25,156 5,094,619 4.4
1960 4,474 585,561 5,629 11,053,327 10.2
1980 4,413 502,822 119,574 29,245,100 27.1
1990 4,808 523,886 165,546 37,848,556 34.4
1998 5,436 395,764 112,483 7,507,715 20.7
Table 1. Circulation of Newspapers in Russia3
Understanding the media’s ability to effectively coordinate a large number of people and
facilitate institutional change, Lenin placed controls on the press following the Bolshevik
Revolution. Lenin viewed newspapers as tools for collectivist propaganda and organization
(Hollander 1972). Stalin and Khrushchev continued Lenin’s legacy and utilized the media to
communicate official news, educate and instill ideology, and present an idealized view of life in
the Soviet system. As Table 1 indicates, the circulation of newspapers increased drastically
during the period from 1940 to 1980. This increase captures the investment made by political
leaders in the media as a form of social control.
To further understand the importance of media in the Soviet system, consider that the
Union of Journalists was formed in 1957, and by 1966 membership had increased to 43,000
making it the largest union in the country (Hollander 1972). The purpose of forming the union
was so that the state could achieve better control over journalists through centralization.
Journalists were provided with clear guidelines for their reporting which included unconditional
party loyalty, patriotism, truthfulness to Leninist theory, and accessibility to the average reader
3 Source of data, Zassoursky 2004: 8.
21

(Hollander 1972). Journalists were closely monitored in their application of these guidelines and
were told what topics were acceptable for media coverage.
A complex monitoring system was established to oversee the media. The Chief
Administration for Literary and Publishing Affairs was established in 1922 and was later
renamed the Chief Administration for the Protection of Military and State Secrets in 1957. The
function of this administration was to review and approve all printed materials and to monitor all
media outlets (Hopkins 1970). There were several other government administrations established
to oversee the mass media. For example, the Department of Propaganda was in charge of filling
editorial and management positions in the various media outlets throughout the country.
It is within the context of decades of strict state control that the communist system
collapsed and the Russian media moved toward independence. Movement toward media
independence started under Gorbachev with the introduction of glasnost in 1988 and the media
law of 1990. In theory, these changes provided the basis for increased freedom of speech and
critical discussion and analysis of the government, which was important given the broader effort
to implement economic and political reforms.
The Rise and Fall of Russian Media Independence
In August 1990 a Russian media law came into force that provided a foundation for freedom of
speech and expression. The law prohibited censorship and stated that the only way that media
outlets (e.g., newspapers and broadcasting outlets) could be closed was by court order. It also
provided a formal process for registering newspapers and broadcasting media. A central goal of
the law was to remove the ability of political officials to limit press freedom.
22

A subsequent media law was signed in December 1991 by Boris Yeltsin. This law
overlapped with the 1990 law in many aspects. For example, the subsequent law reiterated the
ban on censorship as well as the registration process for media outlets. The 1991 law called for
the establishment of a Federal Commission for Television and Radio to oversee the registration
process. It also provided some boundaries on the limits of free speech including the disclosure
of protected state secrets, intolerance and attempts to overthrow the political system via force
(Benn 1996: 472).
Following the implementation of these two media laws numerous independent media
outlets opened. Describing this period, Zassoursky notes, “throughout the final years of the
Gorbachev administration and during the first years under Yeltsin, the press was a genuinely
independent institution and, in an environment of weak political authority and a chaotic
economy, had enormous power” (2004: 16). However, this period of media independence was
short lived.
The main reason that media freedom was eroded was that the media was never fully
institutionalized as an independent entity in Russia. Although the 1990 and 1991 media laws
provided a framework for media independence and freedom of expression, there was never a
clean break between the Russian media and the Russian political system. The concept of the
media as the “fourth estate” holds that media should be an independent and self-sustaining
institution that stands separate from the legislative, executive and judicial branches of
government (Zassoursky 2004: 11). In Russia, the media as a fourth estate never emerged since
it remained closely intertwined with the political apparatus, just as it had in the preceding
decades.
23

The economic downturn that plagued in Russia in the early 1990s was one reason for this
outcome. To characterize the scope of this downturn, consider that Russian per capita income
fell by more than 50 percent over a decade. Between 1990 and 1999 Russia’s average annual
decline in GDP was 6.1 percent (Carrington and Nelson 2002: 236-237).4 In the context of the
media, the downturn was important because independent media outlets had a difficult time
becoming financially independent. To understand the difficulties facing some of the most
popular papers, consider the changes in print-runs during the 1991 to 1995 period. The print-run
of Izvestiya fell from 4,700,000 to 811,000 while the print-run for Pravda declined from
2,628,000 to about 204,000. Well-known weekly publications also suffered. The print-run of
the Literaturnaya gazetta fell from 1,200,000 to 325,000 while the print-run of the Argumenty i
fakty declined from 24,527,000 to 4,200,000 (Benn 1996: 474).
The economic contraction, coupled with the ineffectiveness of reforms and uncertainty
regarding the general “rules of the game” governing economic interactions made it difficult to
attract foreign investment. The response by many media outlets was to turn to the government
for financial support. Unlike in the case of Mexico where state bankruptcy prevented
government from financing media outlets, in Russia, despite economic collapse, government
coffers retained a positive balance, allowing government to capitalize on the support-seeking
media outlets’ need by purchasing the friendship of critical national information sources. The
result was that the media outlets never became truly independent of political dependence and
influence.
The continuing media dependence on government posed a problem. On the one hand,
media outlets wanted to maintain their journalistic and editorial independence while receiving
4 On the nature of Russia’s unusually large economic contraction relative to other post-socialist transition countries,
see, Leeson and Trumbull (2006).
24

continued support from the government. On the other hand, many government officials wanted
the media to refrain from criticizing government or provide favorable coverage in exchange for
ongoing financial support. Discussing this tension, Elena Androunas writes, “Under the
communists, the press pretended that it was free of ideological pressure. Now it pretends that it
can be free of pressure from the government while being supported by government subsidies”
(1993: 63).
Because of the continued reliance on government financing, the media was never able to
escape its past and break with the political system. The Soviet system media was viewed and
used as a key part of the broader propaganda system. As media outlets simultaneously sought
independence and continued government support, they remained trapped within the existing
system. The ruling elite continued to provide financial support to media outlets with the
expectation of reciprocation in the form of positive media coverage that would allow rulers to
maintain their positions of power.
The close linkages between the political system and media continued even after the
implementation of the 1990 and 1991 media laws, which temporarily provided a framework for
media independence. As Zassoursky notes, “at the height of the economic crisis of 1992, the
alliance between the government and the ‘democratic’ mass media…became even closer thanks
to the development of a system of subsidies and economic assistance” (2004: 16). The
government provided subsidies through reimbursements for production, price fixing of the paper
used in production, forgiving and paying down the debts of media outlets, and transferring
ownership of buildings and other infrastructure to media outlets.
Further, many formerly state-owned media assets were privatized and sold to politically-
connected oligarchs. Boris Berezovsky’s ownership of ORT and the various media enterprises
25

constituting Vladimir Gusinsky’s holding group are but two examples of this. Although these
media outlets were officially privatized, in both cases the media was intertwined with the
political system allowing for government manipulation through both direct and indirect means.
The Russian media was never able to overcome its dependence on the government and hence
was never able to facilitate institutional change around sustainable liberal institutions.
The Impact of Media on Russia’s Institutions
Media independence in Russia was fleeting and whatever early strides were made in media
freedom were quickly eroded. As such, the media had little to no sustainable impact on the
adoption of beneficial reforms and institutional change in Russia. Instead, the media continues
to be manipulated by those in the Russian government to subvert reforms and maintain their
positions of power and maintain the status quo. Private interests are pursued at the expense of
the broader interests of Russian citizens.
As evidence of this, consider the state of the Russian media since 2000. In September
2000, President Vladimir Putin signed the Information Security Doctrine, which was the
foundation of the government’s new policy toward media. The document expressed a
commitment to press freedom and indicated that state monopolization of media was prohibited.
However, the document also left much room for government manipulation. While calling for
increased media freedom, the doctrine also called for a halt to foreign investment in media, as
well as the need to further develop state-operated media and a pool of loyal journalists.
The actions of the Putin government seem to cut directly against the overarching rhetoric
of press freedom found in the Information Security Doctrine. Consider, for instance, that Putin
travels with a handpicked group of reporters. Most of these reporters work for the state and
26

those that raise unwanted questions are replaced in the pool. Many broadcasts showed on
television are influenced and approved by the Kremlin (Baker 2005). Indeed, the three major
television networks in Russia – Channel Russia, ORT and NTV – are either directly controlled
by the state or are in the hands of individuals who are loyal to Putin and his administration.5
According to Freedom House’s (2007) Freedom of the Press report, overall media
freedom has fallen since Putin has been in office. Freedom House downgraded Russia’s overall
media score to “not free” staring in 2002 and its overall rating has remained in that category
since then. Government authorities at all levels employ both direct and indirect pressures to
manipulate the media. Media outlets throughout Russia remain dependent on government
subsidies and other forms of financial favoritism (Carrington and Nelson 2002: 237). The
coercion of journalists is yet another major issue. Russia remains one of the deadliest countries
in the world for journalists. According to Reporters Without Borders (2006), twenty one
journalists have been killed in Russia since Putin came to power in 2000. Even well-known
journalists are not immune to the threat of coercion, as illustrated by the October 2006 murder of
reporter Anna Politkovskaya who worked for the weekly Novaya Gazeta. Politkovskaya, a well-
known journalist, had been a strong critic of the Putin administration, as well as Russia’s actions
in the Chechen conflict. Her murder has yet to be solved but the circumstances surrounding her
death are suspicious.
Becker (2004) characterizes the Russian media under Putin as “neo-authoritarian.”
Under such a system, pluralism in the media is acceptable but only up to a point. There are clear
limits on the media, especially when it comes to issues associated with the actions of the
government (e.g., government interventions abroad, major domestic government initiatives,
5 Channel Russia has been state owned since its founding in 1991. As we discussed earlier in this chapter, ORT and
NTV were owned by private individuals before those individuals sold their shares to individuals, or groups of
individuals, loyal to the Kremlin.
27

corruption, elections, and so on). Under neo-authoritarian systems the media is used by those in
political power as a weapon against political opposition (Becker 2004). Further, within such a
system the government typically relies on indirect means of government control and
manipulation. These include, but are not limited to, control of entry through licensing and
regulation, subsidies, advertising contracts, tax and debt breaks and the use of ambiguous laws
and regulations to punish journalists and media owners and employees (Becker 2002: 168–70
and Becker 2004: 149-150). All of these indirect forms of government manipulation have been
employed in Russia. While elements of independence exist, there are strong constraints on how
that independence can be exercised. This control has limited media freedom constrained the
ability of the Russian media to serve as an effective mechanism of development-enhancing
institutional change, resulting in economic stagnation.
4.3 Poland
Historical Background of Poland’s Media
Poland’s media can be traced back to 1661 when the country’s first newspaper, Merkuriusz
Polski, appeared as a royal publication of the king. For over a century, starting in late eighteenth
century, Poland was controlled by German, Austrian and Russian autocratic governments. While
the specifics of media control differed under each of these regimes, the common theme was that
published material was reviewed and censored by the occupying powers. As such, media in
Poland has a long history of being directly connected to the political elite, as well as a direct
dependence on the political system.
Poland achieved its independence in 1918, but that independence was fleeting. In 1939
the Nazis invaded Poland from the west while the Soviets invaded from the east. Following
28

these successful invasions, control of Poland was divided between the Germans and Russians.
Both banned all Polish newspapers, closed existing radio stations, and implemented a system of
state-controlled newspapers, as well as loud speakers throughout their respective zones to
communicate news, directives and propaganda (Goban-Klas 1994: 43-44).
Following World War II and the collapse of the German administration in Poland, a new
communist controlled government, the Polish Committee of National Liberation, emerged in
July 1944. A few months later, following the Yalta Agreement in February 1945, a new Polish
government was established. The new government was the result of a compromise between the
existing communist government and the exiled Polish government.6 It is important to note that
this new, provisional government was dominated by members of the communist government.
The first postwar elections were held in January 1947. The communists easily won the election,
which was considered by many to be fraudulent (see Goban-Klas 1994: 52-53). The communists
would maintain their hold on power until 1990.
Following World War II the government quickly became Poland’s biggest publisher. In
1945 a bill limiting private printing of media was introduced and a year later all paper mills and
printing plants were nationalized. Soon thereafter, the allocation of newsprint and paper was
centralized in the hands in the state. By 1949 the state controlled the distribution of all
newspapers and magazines (Goban-Klas 1994: 54). The Ministry of Information and
Propaganda had been established in 1944 and continued in operation under the new Polish
government. Indeed, the Ministry played a key role in influencing Poland’s first postwar
elections in 1947 by shutting down or severely restricting most non-communist newspapers.
Similar to Russia, and other communist regimes, the media played a central role in the
6 The Polish government in power prior to the Soviet and Russian invasions fled to London to form a government in
exile. The government in exile, led by Prime Minister Władysław Sikorski, was recognized by the Allied
governments as the legal and rightful government of Poland.
29

sustainability and operation of the government (Naumann 2004: 1). As Goban-Klas notes,
“since the late 1940s and early 1950s the [Polish] media policy had two goals: to win support
from a hostile population for Communist rule in Poland and to emulate Soviet propaganda”
(1994: 73).
Although the 1952 Polish constitution guaranteed freedom of the press, all aspects of the
Polish media were controlled by the state. The government trained and appointed journalists and
media employees and provided directives to media outlets regarding appropriate topics for
coverage. All media stories and editorials were censored and edited by state officials before
being published or broadcast. State control of the media covered newspapers, magazines, radio
broadcasts, films, popular books, textbooks, stamps and songs. For the most part, the laws and
regulations concerning censorship were effective due to the threat of imprisonment or death for
deviation from those rules. For example, most journalists were careful to communicate the party
line and not come across as critical of the government for fear of punishment.
Given that the Polish media system was based on the existing Soviet system, it makes
sense that a bureaucracy similar to Russia’s was established to monitor and operate the media.
Overseeing the entire Polish media was the Department of the Press, Radio and Publications.
Underneath this department was a series of agencies and departments for each branch of the
media. For example, the Department of Press and Publication oversaw newspapers, while the
Ministry of Telecommunications and the Committee for Radiophonisation oversaw radio
broadcasting.
For the next several decades the media remained under the control of the communist
government. Changes did occur over this period. For example, in the 1970s under Edward
Gierek, television became a central political medium and joined other forms of media under
30

strict government control. The state-run television channels were used to communicate news,
directives, and the achievements of the communist system. The state maintained its hold on all
forms of Polish media throughout the decade. During the communist government’s hold on
power, the “iron rule was that propaganda is more important than butter – although the shops
may not have butter, the newspapers still had to be sold on a daily basis” (Goban-Klas 1994:
175). This points to an understanding on the part of government officials of the power of media
as a mechanism for widespread coordination and institutional change.
It is also important to note that a robust underground press emerged in Poland in the late
1970s. The Russian phenomenon of samizdat – the practice of copying and distributing illegal
material – was an important aspect of life in Poland. In addition to underground copies of books
and pamphlets, weekly and biweekly newspapers were also published. For example, the
biweekly paper, Robotnik, which first appeared in 1977, aimed to “convey the truth, since the
official press did not fulfill this role; on the contrary, it was full of lies and slanders” (quotes in
Goban-Klas 1994: 156). Hundreds of other independent paper emerged in the late 1970s
covering a wide range of topics. As Millard notes, “the gathering strength of the underground
press provided alternative sources of information not only on current politics but also on key
events in Polish history and access to literary works frowned upon by the regime” (1998: 88).
While the smaller print run of these underground papers could never compete with official
government papers, they were a form of independent press that published outside the strict
constraints of government censorship. The emergence of these papers also signaled that the state
could not control all forms of media and foreshadowed the events that would occur starting in the
early 1980s.
31

The Rise of Poland’s Media Independence
The Pope’s visit to Poland in 1979, coupled with worsening economic conditions and a series of
worker strikes in the early 1980s, are typically sighted as the beginning of the end of the
communist regime in Poland. A series of worker strikes orchestrated by the Solidarity dissident
movement led to the Gdańsk Agreement between the Polish government and the workers. A key
part of the worker demands was the call for freedom of speech in publications. The government,
in an attempt to remain in control while accommodating the workers, met the demands and stated
that censorship would only be applied to instances involving state secrets. Although media
independence did not occur instantaneously, the content of the Gdańsk Agreement was a major
event in the history of Polish media. In theory, the terms of the agreement ended the communist
party monopoly over the media and provided the foundation for a pluralistic media.
Following the Gdańsk Agreement, the media began investigative reporting on such topics
as political events, corruption and the accuracy of official statistics. During this time “the
traditional roles of the daily and weekly press changed. Dailies began to utilize in-depth
reporting and lengthy essays, whereas weeklies kept abreast of ongoing political developments,
informing people about the events of the day…editorial discussions of formerly forbidden topics
were organized and published” (Goban-Klas 1994: 169). In October 1981, due to the demands
of the striking workers, a new anti-censorship law was passed. This was important because the
new formal law allowed government censorship to be challenged through the court system and
placed a check on government actors. The law guaranteed freedom of speech and outlined the
conditions under which press freedom was restricted.
However, Poland’s newfound media independence was short lived. In December 1981,
Wojciech Jaruzelski, the Communist Party’s new prime minister, declared martial law.
32

Jaruzelski claimed that martial law was necessary because the country was on the verge of
economic and civil unrest. The decree included an initial crack-down on Solidarity including the
imprisonment of its leaders and eventually the official banning of the union in 1982. Despite the
ban, the Solidarity movement continued its operations underground and remained a powerful and
influential force throughout the country. A key part of Solidarity’s ongoing efforts and influence
was an underground media campaign including pamphlets, newsletters and weekly newspapers
(Goban-Klas 1994: 187). The declaration of martial law also included the suspension of
freedom of speech and introduced new regulations regarding all forms of media and
communications. Although martial law remained in place until 1983, the control of the
communist regime over the country had weakened significantly, evidenced by the need to issue
the decree in the first place, as well as by the continued operations of Solidarity and the
underground press.
Even during the period of martial law, new forms of media grew. For example, although
the government had a strong hold on traditional television broadcasting, the introduction of
videos and camcorders allowed for the exchange of videos largely outside the state’s control
(Goban-Klas 1994: 196). Also important was the introduction of satellite antennas, which
allowed Polish citizens to view foreign broadcasts. These changes in technologies significantly
weakened the government’s monopoly on television broadcasting and information.
Following another series of worker strikes in 1988, the government came to the
realization that in order to remain in power it was going to have to deal with the still banned, yet
heavily influential, Solidarity movement. The government reached out to Lech Wałęsa, the co-
founder and leader of Solidarity. In addition to co-founding Solidarity, Wałęsa had been arrested
under the declaration of martial law in 1981 and had been awarded the Nobel Peace Prize in
33

1983 for his efforts against the communist regime. The goal of the government was to
incorporate Wałęsa as a minor political player in order to accommodate the Solidarity movement
and prevent future worker strikes.
As part of this process a live televised debate between Wałęsa and Alfred Miodowicz –
the president of the state trade unions – was held to discuss the pressing problems facing the
country. The fact that the government was willing to engage opposition views on live national
television illustrates the extent to which it was losing its grip on power. Recall that only a few
decades earlier the communist government had a strong hold on all forms of media and used that
power to silence opposition views instead of attempting to accommodate and incorporate them in
the broader political system. At the peak of its power, the communist system did not allow for
dissent or opposition, especially not in any kind of public forum.
The debate solidified Wałęsa, both nationally and internationally, as a strong leader and
serves as an example of the reach and power of the media. As Goban-Klas writes, “without the
television opportunity, he [Wałęsa] probably could not have returned so quickly and smoothly to
the Polish political scene as a popular, undisputed leader with whom the majority of Poles could
identify” (1994: 201). Indeed, Wałęsa’s popularity would remain intact as he was elected the
President of Poland in 1990. Contrary to the Polish government’s intentions, the televised debate
did not have the effect of silencing the opposition movement. Instead, Wałęsa’s success led to
further calls for reforms.
The Wałęsa-Miodowicz debate was followed be a series of “roundtable talks” beginning
in February 1989, which were further meant to placate the opposition movement.7 These talks
included members of the government and key opposition leaders from the Solidarity movement.
7 On the expectations and miscalculations of the communist government regarding the roundtable talks, see Hayden
2001.
34

The talks, which lasted until April 1989, covered such topics as the reform of the judicial and
political system, the role of trade unions, and government regulations on mass media among
others. On the political front, the outcome of the roundtable talks was an agreement to changes
in the political system including free elections to choose members of a new bicameral legislation
and the introduction of a president to serve as chief executive. In terms of media, the outcome of
the talks was a commitment to freedom of speech, allowing all political views access to the
media.8 The result was the “…breakdown of the official monopoly over the media that had been
a traditional feature of Communist regimes” (Goban-Klas 1994: 210).
A flurry of changes in the Polish media followed the roundtable talks. The changes
began in June 1989 when the first elections under the new system were held. The elections could
not be considered completely free since the communists implemented restrictions to maintain
their position of power. Specifically, Solidarity candidates were only able to run for one-third of
the seats in the lower chamber of parliament. Ultimately, the Solidarity candidates won all the
seats they were able to run for. Following the elections, a simple system of registering
newspapers and other periodicals replaced the old system. This significantly lowered the cost of
starting new papers. Within months of the new registration system being established, over two
thousand applications were filed. New papers emerged, meeting various niche demands for a
wide array of information including traditional political coverage, “light periodicals” providing
entertainment and sensationalism, shopping magazines and erotica (Goban-Klas 1997: 25).
As a specific example of how the independent media served as a mechanism of institution
change, consider the case of Rzeczpospolita. The previously state owned Rzeczpospolita was
privatized in the early 1990s. The independent paper quickly expanded its economic and
political coverage and created the “green pages,” which focused specifically on Poland’s
8 For a detailed account of the roundtable discussion on media, see Goban-Klas 1990.
35

economic development in terms of new policies adopted, as well as their progress. The paper
served as a key information source during the mass privatization efforts – and continues to
provide key information on current events – allowing readers to realize the benefits and track the
progress of economic reforms (Carrington and Nelson 2002: 235).
In 1990 the law on censorship was officially revoked and legislation was introduced to
begin privatizing key aspects of media infrastructure. For example, RSW Prasa-Ksaizka-Ruch,
which had been a state-controlled organization for printing and distributing daily and weekly
papers, was privatized. The privatization of RSW Prasa-Ksaizka-Ruch was critical because it
dismantled the central means of government control of the press and reallocated the
infrastructure to private owners. As such, the privatization created a clean break from political
control and manipulation.
In general, the privatization process was more open as compared to that in Russia.
Further, foreign ownership and investment was permitted providing a critical source of funding
to newly independent media outlets. By the mid-1990s the rate of foreign ownership of Polish
daily newspapers was over 55 percent. These dailies account for 70 percent of total circulation
at the national level (Goban-Klas 1997: 27; Gulyas 1999: 69, 2003: 89, 97).
The Impact of Media on Poland’s Institutions
The media has had an important impact on Poland’s institutions on several margins. The
communist government used the media as a tool for coordinating Polish citizens around
communist policies and ideology. The central role that media played in the communist system as
a tool of propaganda illustrates media’s power as a mechanism of institutional change. Indeed,
36

the reason that the communist government invested so heavily in controlling the media was to
prevent institutional movements away from the status quo to maintain its hold on power.
The media also played a central role in the erosion and eventual collapse of the
communist regime. A robust underground print media developed following the emergence of the
Solidarity movement in the late 1970s and was an important part of dissident efforts. This
underground media served as a source of information and also as a mechanism for coordinating
the actions of the Solidarity movement. Underground publications allowed Polish citizens to
become aware of the presence and activities of Solidarity and provided citizens with an
opportunity to update their belief systems regarding alternatives to the communist state. As an
independent publisher noted, “a whole network of independent publications was created, a
readers’ market, and a distribution system for works of literature, journalism, and academic
works unhampered by censorship. These uncensored publications were only a part, but the most
important part, of a general self-defense of society against the totalitarian state apparatus”
(quoted in Goban-Klas 1994: 157).
The media further contributed to the erosion of the communist regime through the
televised Wałęsa-Miodowicz debate. As we discussed above, the debate established Wałęsa’s
popularity as a capable and confident leader. The debate was a major event throughout the
country and created common knowledge around Wałęsa’s vision, as well as his role as the
undisputed leader of an alternative to the communist past. This is evidenced by the public
support for Wałęsa, culminating in his election as Poland’s president in 1990. The Wałęsa-
Miodowicz debate provides yet another example of why totalitarian regimes expend significant
resources attempting to control media and information, especially regarding dissenting views and
opinions. The expression of alternative views, especially when they become common
37

knowledge as in the case of the televised debate, allow citizens to update their belief systems in
ways that can weaken the control of those in power. While the goal of the Polish government in
sponsoring the Wałęsa-Miodowicz debate was to placate the dissident movement, it had the
opposite effect. Instead of quieting the opposition, Wałęsa’s performance during the debate led
to stronger demands for reforms and changes.
As Poland’s media gained independence in the early 1990s, it played an increasingly
important role in the broader reform process. The variety of independent media outlets that
emerged covered the reform process and served as the main source of information for many
Polish citizens. Once in motion the reform process was self-extending, as citizens demanded
increasing amounts of information regarding the reform process, which facilitated further
institutional change, and so on.
5 Conclusion
There is widespread agreement among economists that “institutions matter” for economic
performance. In light of this consensus, the central issue becomes understanding the process of
institutional change. Given its reach, we have argued that an independent media is one important
mechanism capable of creating the widespread coordination around beliefs and ideas required for
sustainable institutional change. Our analysis has several important implications for
understanding the process of institutional change.
The first implication is that the media is one mechanism for overcoming the
“coordination problem” associated with institutional change. Institutional change requires that
individuals update their mental models to include new ideas and beliefs. In order for these new
beliefs to become institutionalized, individuals must be confident that others will reciprocate and
38

adopt similar beliefs. This requires common knowledge around the new ideas. Given its
widespread reach, the media can serve as a generator of common knowledge.
The second implication is that while an in independent media allows for coordination
among members of a society, it also allows for the exchange of alternative beliefs and ideas
between societies. Where media is independent and open to foreign influences, it allows
societies lacking quality institutions to engage in cultural exchange with countries that do posses
such institutions. This allows for institutional sharing and emulation across societies. Although
the institutions that emerge in developing countries may not mirror those in developed countries,
high quality institutions that already exist can serve as a template from which developing
countries can borrow. The media is one important mechanism facilitating this process of
institutional evolution.
Finally, our analysis indicates that an “exogenous shock” is often necessary to start the
process of adopting reforms that contribute to the rise of an independent media. For example, in
Mexico the economic downturn and national bankruptcy in the 1980s led to increased media
freedom. In Poland, the rise of the Solidarity movement began the process of reforms in the
media sector, among others. As these cases indicate, once the forces of media independence are
set in motion, they can be self-sustaining and self-extending and facilitate the adoption of
subsequent reforms, enabling additional development-enhancing institutional change. However,
not all such “shocks,” of course will be positive ones. In Russia, for example, economic collapse
bred greater media dependence, which in turn stifled the evolution of liberal institutions, stunting
economic progress.
39

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