L. Introduction In modern economies and societies, the availability of information is central to better decision making by citizens and consumers. In political markets, citizens require information about candidates to make intelligent voting choices. In economic markets, including financial markets, consumers and investors require information to select products and securities. The availability of information is a crucial determinant of the efficiency of political and economic markets(Simons 1948, Stigler 1961, Stiglitz 2000) In most countries, citizens and consumers receive the information they need through the media, including newspapers, television, and radio. The media serve as the intermediaries that collect information and make it available to citizens and consumers. A crucial question, then, how the media should be optimally organized. Should newspapers or television channels be state or privately owned? Should the media industry be organized as a monopoly, or competitively While there is some theoretical discussion of these issues, our empirical knowledge of the possible forms of organization of the media industry, and their consequences for economic and political markets, remains extremely limited Consider some theoretical issues first. A Pigouvian economist, who believes that governments maximize the welfare of consumers, would conclude that information should be provided by a government-owned monopoly. First, information is a public good-once it is supplied to some consumers, it is costly to keep it away from others, even if they had not paid for it. Second, the provision as well as dissemination of information is subject to strong increasing returns: there are significant fixed costs of organizing information gathering and distribution facilities, but once these costs are incurred, the marginal costs of making the information available are relatively low. For both of these independent reasons, a strong welfare-theoretic case for1 I. Introduction In modern economies and societies, the availability of information is central to better decision making by citizens and consumers. In political markets, citizens require information about candidates to make intelligent voting choices. In economic markets, including financial markets, consumers and investors require information to select products and securities. The availability of information is a crucial determinant of the efficiency of political and economic markets (Simons 1948, Stigler 1961, Stiglitz 2000). In most countries, citizens and consumers receive the information they need through the media, including newspapers, television, and radio. The media serve as the intermediaries that collect information and make it available to citizens and consumers. A crucial question, then, is how the media should be optimally organized. Should newspapers or television channels be state or privately owned? Should the media industry be organized as a monopoly, or competitively? While there is some theoretical discussion of these issues, our empirical knowledge of the possible forms of organization of the media industry, and their consequences for economic and political markets, remains extremely limited. Consider some theoretical issues first. A Pigouvian economist, who believes that governments maximize the welfare of consumers, would conclude that information should be provided by a government-owned monopoly. First, information is a public good – once it is supplied to some consumers, it is costly to keep it away from others, even if they had not paid for it. Second, the provision as well as dissemination of information is subject to strong increasing returns: there are significant fixed costs of organizing information gathering and distribution facilities, but once these costs are incurred, the marginal costs of making the information available are relatively low. For both of these independent reasons, a strong welfare-theoretic case for