Globalization, Domestic Stability and Freedom of the Press

This paper empirically models the determinants of “press freedom,” which is an important, if under-studied, institution of good governance. A free press plays a vital economic role in aggregating information, facilitating coordination, reducing transaction costs, increasing transparency, and holding economic and political elites accountable. Therefore actors who believe in sound economic governance should support the creation of an independent press, while those that seek to obscure bad information should oppose it. Drawing on the literature on the nexus of economic globalization and democracy, this study explains economic globalization’s impact on states’ calculations regarding press freedom. Economic globalization is modeled not as a single unified process, but rather as a disaggregated interrelated set of economic and political processes. Using panel data from the period 1993-2006, it finds empirical support for the significant influence of investment ratings, “market–seeking” foreign direct investment, and international aid in promoting press freedom. However these positive influences are countered by with the negative effects of trade liberalization, “efficiency-seeking” FDI, and social instability. Thus economic globalization generates contradictory pressures with respect to press freedom. This is because only certain types of international investment have an interest in greater transparency, while other processes such as trade liberalization can lead to a social backlash and instability, indirectly undermining globalizations positive influences. These results are robust with respect to different estimation techniques and alternative specifications.