Concentration and Capture in the News Media

Abstract

Median voter models imply that political agents will compete to satisfy the policy preferences of the median voter in a bid to win election. In a more realistic model, political information signals are filtered through the news media before they are transmitted to the median voter. Under imperfect information, it can be profitable for the elite to use the power of the media to further their own political interests. More specifically, popular support of redistributive policies often depends on the information people have. If income is held constant and inequality increases, the median voter is strictly better of voting for higher redistribution, the elite – in an effort to maintain the status quo - have a higher incentive to manipulate the preferences of the median voter. In my empirical section, I expand on the analysis conducted in Petrova (2008) by using a cross country panel of 122 countries from 1994 to 2015. I find that; in a democracy high inequality is associated with lower media freedom. Media capture offers an explanation of this phenomenon. In addition, concentration in the media market associated with lower legal and political media freedom. Finally, I find a significant and positive relationship between internet accessibility and freedom of the traditional press, the magnitude of this relationship is greater in democracies. Freedom House’s annual freedom of the press reports indicate that the average media freedom worldwide has been steadily declining for the last decade. The rate of this decline is larger in democracies. This thesis looks to access a possible explanation of this phenomenon, media capture.