The Economics of Media Freedom: is Sri Lanka on a virtuous or vicious cycle?

Abstract

This article explains the economic importance of media freedom by considering three reasons: i) indicative reasons; ii) instrumental reasons; and iii) integral reasons. Media freedom is indicatively important because it is a direct reflection of the “doing business” environment. The instrumental reasons have two layers. The first is directly connected to economic actions: information is fundamental to economic success and the media is the most important institution in the provision of information. The second layer of instrumental reasons is less direct. That is, free media helps to reduce unfavourable political practices that are corrosive to economic success by shining the light on such actions. Media freedom is also integral to the economy because the vibrancy of media is determined not only by political and legal structures, but also by the economic structures in place.