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THEORY-850: In Hungary, 1994–2016, state-owned firms' advertising, and not private firms', shifted sharply toward print and online outlets when they became connected to the governing right and away when the 2015 Orbán–Simicska fallout ended a connection, at all five such events studied; and the outlets' share of articles on corruption scandals moved the opposite way at the three events with content data

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Properties5
StatusActive
Version2
Tagssociety-and-governance, social-science
SourceLIT-1315 — Media Capture Through Favor Exchange
SupportsCLAIM-404 — An organization can be governed from outside without any of its decisions being made for it, through the evidence its own procedures receive or through the criteria by which they weigh evidence; the two routes are distinct and each is possible without the other, so informational and evaluative independence do not imply each other; and where the organization's role is to evaluate another that affects its evidence or resources, the interpretation–authority loop can close between the two institutions, so that formal independence of the evaluator's procedure does not make its evaluation independent

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Source

Szeidl and Szucs, “Media Capture Through Favor Exchange”, Econometrica 89(1): 281–310 (2021), LIT-1315, read in full in NOTE-1039, with Appendix A.2 of the supplement.

What was actually shown

Monthly advertising by the 500 largest private advertisers and all state-owned and government-agency advertisers (Kantar Media, list prices), compared around five events.

  • Changes of government. The right-connected daily’s share, against the left-connected daily, of state-owned firms’ advertising went from 16% to 72% under the 1998–2002 right government and from 47% to 95% after 2010. Private firms’ share tracked relative circulation. Regression: +26 to +34 percentage points under right governments, relative to private firms.
  • Metropol, bought by a business partner of Simicska in 2011. Its share of state-owned print advertising went from below 20% to above 50% at once, with private advertising unchanged.
  • The fallout, February 2015. The share of state-owned advertising in Simicska’s two dailies fell from above 60% to below 20%, beginning months before the fallout was public.
  • Origo, new editor (2014) and new connected owner (2016). State-owned firms’ share rose by 18–22 and then 57–61 percentage points relative to private firms. Visitor shares did not change.

Corruption coverage, as the share of an outlet’s articles matching a hand-built list of scandals: after the fallout Magyar Nemzet’s rose by 1.27 points (s.e. 0.23) while the left daily’s did not change. Relative to Index, Origo’s fell by 0.44 points after the new editor and 1.36 after the new owner.

What could have come out otherwise: private advertisers could have moved with the state-owned ones, as they would if audiences had changed. Online audience demographics, and the politics of the 2013 readers’ demographic profiles, could have diverged. Neither happened. In the fallout, the advertising moved before the coverage, which is the reverse of what an audience-led explanation predicts.

What this does not say

  • Not why the content moved. The reduced form cannot tell an owner who shared the government’s view from one paid by it. That split needs the structural model (THEORY-852).
  • Not that left-wing governments did otherwise. The authors take no stand on favoritism under left governments.
  • Not that advertising was the only favor, nor corruption coverage the only slant.
  • Not a significance level for every comparison. Origo’s drop after the new editor has a standard error of 0.26 with period effects and 0.105 with month effects.
  • Not beyond Hungary. The authors’ worldwide reading rests on a review of qualitative reports.

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