# **II. Importance of the media**

To date, there is little research specifically on media and business regulations or business reforms. However, the growing role of mass media in governance effectiveness, political accountability and economic development at large has drawn attention of some researchers and international organizations. Adding to this discourse, a World Bank publication (2009) explores a relationship between media coverage and governance reforms, focusing primarily on subjects including democracy, freedom of speech, elections and government accountability. This study concludes that more diverse and independent media tends to foster good governance.

In the same vein, Besley and Burgess (2000, 2001) suggest that free and independent press working in conjunction with democratic institutions can make governments more responsive to the needs of citizens. Building the analysis on the cross-country data with a specific focus on India, the authors provide evidence of strong linkages between media and electoral processes as well as media and government responsiveness. Leeson and Coyne (2007) analyze a relationship between media freedom, foreign aid and economic development in post-socialist transition countries. Their research demonstrates that politically autonomous, independent mass media serves as an effective law enforcement mechanism, enabling political commitment to reform implementation. And that mass media is an important factor in determining successes and/or failures of reforms in transitional economies. Research results show that media’s freedom is linked to an increase in the level of economic development, while foreign aid is associated with higher economic development only if a country has relatively free media.

Egorov et al. (2009) explore the relationship between media and governance in the context of natural resource endowment and the ‘resource curse’ problem. The authors analyze factors that determine media freedom in dictatorships. They employ a model predicting that free media improves dictators’ government quality by providing incentives to bureaucrats to gather and transmit information from across different sectors to the higher government levels. However, the extent of media freedom that a dictator chooses varies with resource endowments of a country. The findings show that media is less free in resource-rich economies, with stronger effect in nondemocratic regimes. Further, Garcia-Sanchez et al. (2016) use the World Bank Governance Indicators data for 2002–2008 to analyze the relationship between free media and government effectiveness. The authors demonstrate that government effectiveness level can be determined by media, political characteristics and organizational environment, considering the level of economic development of an economy.

Arguably, one of the key roles of media in promoting democratic principles and good governance lies in encouraging public activism and enabling better informed political and economic debates in a society. A sizable body of research examines the effects of media in the context of political discourse and expression of public opinion. McCombs and Shaw (1972) argue about the importance of media in setting the political agenda and shaping political reality by not only informing the audience about certain issues, but also determining the level of their importance. Likewise, Stromberg (2001) in his analysis of the impact of news media on regulatory policy shows that media, due to its special role in transmitting information to mass audiences, increases political influence of dispersed large groups at the expense of small interest or minority groups, thus strongly influencing policy setting. Furthermore, one of the 4