-EL DERECHO A LA INFORMACIÓN

study

Historical institutionalism has several advantages in this study in analysing large industrial organisations. Above all, by treating broadcasting companies as institutions, historical institutionalism is able to illuminate underlying rules, values, ideas and conventions that influence the behaviour of broadcasting institutions, which would be largely disregarded by e.g. game theory and other methods commonly used in industrial organisation research. Its punctuated equilibrium model on historical development enables analysis of institutional consistency and change in institutional settings over time, while other institutional approaches are more bound in time and even in space (Peters 2005: 85). Its use is also justified in a cross-national comparative study like this, as it sheds light on systemic features that are rooted in institutional histories and national environments, which explain how the same forces result in different outcomes in different national and institutional settings.

In spite of these significant benefits associated with the approach, the main problem with the use of historical institutionalism in this study pertains to the degree of resolution of its analytical lens. As several scholars argue (see e.g. Hall and Taylor 1996: 942; Peters 2005: 79; Peters et al. 2005: 1286-7), historical institutionalism is not a fertile source of explanations for change in organisations and institutions, and has little capacity to predict them. The analytical framework of historical institutionalism ‘appears premised upon the enduring effects of institutional and policy choices made at the initiation of a structure’ (Peters 2005: 76). Thus, the approach is better suited to explaining of the emergence and persistence of patterns once established, than to explaining how those patterns might change. As historical institutionalism has been developed primarily in the context of political science

(Thelen and Steinmo 1992: 2), its analytical capacity is to an extent insufficient to analyse completely the impact of changes in broadcasting environment on the behaviour of broadcasting organisations operating in a dynamic, liberalised market environment, and hence must adjust their institutional strategies, policies and priorities in terms of the necessities of the broadcasting environment in order to survive.

More precisely, historical institutionalism lacks an explanatory model that establishes a causal relationship between the political and commercial forces in the broadcasting environment, the strategies of broadcasting institutions and their performance that is necessary for comprehensive analysis of the impact of marketisation on broadcasting organisations and their behaviour. In terms of this study, this poses a major weakness, as there appears to be no apparent logic in institutional change other than that of the legacy of the past institutional configurations. Analysing the effects of marketisation by using programme data as empirical evidence is also problematical, as the level of focus of historical institutionalism’s analytical lens is too wide to plausibly explain how changes in industry structure are reflected in programming. In analysing institutional change in particular, historical institutionalists treat institutions mainly as passive objects of change and do not allow for the influence industrial organisations have on other institutions in the market, and the industry structure. As broadcasting organisations compete for the same limited resources (advertising income, public funding, viewers’ attention, etc.), changes in the institutional strategy of a broadcasting organisation is likely to produce repercussions for the industry structure, whose impact may thrust other actors in the direction of institutional change.

This study addresses this lack of resolution of historical institutionalism’s analytical lens in examining minute institutional changes in detail by devising a customised explanatory model – referred to hereafter as the Industrial Equilibrium Model – that employs elements of historical institutionalism and a variant of the Industrial Organisation Model, also known as the Structure-Conduct-Performance Paradigm (SCPP). The SCPP is a model in industrial economics that is commonly applied in

economic analyses of mass media and other oligopolistic industries (see e.g. Wirth and Bloch 1995; Chan-Olmsted 1997; Hellman 1999). The analytical contribution of the SCPP lies in its ability to analyse forces that produce institutional changes in an industrial organisation that operates under the imperatives of a dynamic market, together with its capacity to establish a causal interrelation between the broadcasting market, media policies, broadcasting institutions’ strategies and their performance. By establishing a causal link between the broadcasting policies and industry structure;

institutional conduct; and the performance of a broadcasting institution – manifested above all by television output, the SCPP also facilitates the use of television output as concrete evidence of institutional transformations.

The general methodological approach used by industrial organisation researchers focuses on three concepts: 1.) industry or market structure, which is defined by factors like barriers to entry to the market (political or economic); number of competitors in the market; size of companies; concentration of ownership;

homogeneity or heterogeneity of products (channel concepts or programming strategies), i.e. product differentiation; number of suppliers (e.g. independent producers or acquisitions opportunities) available in the market; concentration of ownership; method(s) of financing broadcasting; subsidies; etc., 2.) industry conduct, i.e. strategies that firms pursue to gain competitive advantage, which is expressed by operating (or business) strategies, programming policies and production strategies and arrangements (e.g. investment in production facilities) of broadcasting organisations; and, 3.) industry performance, which refers to values like profitability, efficiency of operations, quality of service and fulfilment of institutional goals, and is ultimately manifested by the television output of the broadcasting organisations in our case (Wirth and Bloch 1995: 16-17; Waldman and Jensen 1998: 6-7; Hellman 1999:

18). The essence of the most widely accepted approach to industrial organisation analysis is that company performance is determined by the conduct of the firm, and that firm conduct is determined by various industry structure variables.

Early versions of the SCPP treated this causality in a rather simple, linear manner:

since structure determined conduct, which in turn determined performance, it was

unnecessary to examine conduct, but analysis of industry structure would explain performance (Porter 1981: 611). These early versions of the SCPP, however, came under an increasing criticism for the reason that they did not properly depict the relations between the different elements of the model. They lacked internal dynamism and treated the industry structure as exogenous, although performance and conduct often affect industry structure (Porter 1981: 611-7; Wirth and Bloch 1995: 17-18;

Ramstad 1997: 46). Stemming from this criticism, the classical SCPP model has been revised to allow for greater dynamism between the elements of the model. The revised SCPP model recognises that there are feedback effects of firm conduct (strategy) on market structure: for example, firm conduct has impact on the degree of product differentiation in the market. Similar feedback effects are also possible from firm performance back to conduct, and from performance to structure (Porter 1981:

616; Lipczynski et al. 2005: 7). The influence of public policy has also been incorporated to the model: policymakers may manipulate the structure of a market to improve firm conduct and ultimately market performance through structural remedy, or they may directly influence firm conduct by constraining firm behaviour through the establishment of behavioural regulations, or conduct remedy (Wirth and Bloch 1995:

16-18; Ramstad 1997: 46). Finally, the revised SCPP model accepts that each market has various basic conditions pertaining to supply and demand that also influence the industry structure (Lipczynski et al. 2005: 7). These conditions vary across industries and market areas. Supply conditions, referring to the willingness of producers to provide a given quantity of output at a given price, include factors such as underlying technological base and cost structure, resource availability and economies of scale.

Demand conditions refer to the willingness of a customer to pay a given price for a given quantity of a good or service. In broadcasting, customer may refer to audiences or advertisers, depending on the method of financing of a broadcasting company.

Factors pertaining to this category include tastes, preferences and media consumption habits of audiences, advertisers’ ability and willingness to spend money on television advertising, the availability of substitutes (e.g. alternative platforms) and the size of the market area.

The Industrial Equilibrium Model combines key elements of historical institutionalism and the SCPP, thus forming a customised model that has better capacity to analyse change than those provided by historical institutionalism alone. It features the potency of historical institutionalism to treat broadcasting organisations as institutions that constrain and shape behaviour, and the merits of path dependency in examining consistency and change in institutional settings with the benefits of the SCPP in analysing the operation of industrial organisations, such as broadcasting companies.

The key contribution of the Industrial Equilibrium Model is its sharper analytical lens compared to that provided by historical institutionalism or the SCPP alone. Industrial organisation researchers who utilise the SCPP, in turn, commonly use game theory in their analysis, which overlooks the influence of institutional factors in constraining and shaping behaviour. The Industrial Equilibrium Model is better able to identify and analyse institutional changes that are produced by more subtle changes in the broadcasting environment that do not necessarily meet the criteria for abrupt external

‘shocks’ or crises. Consistent with the historical institutionalist position, the model believes that actors’ behaviour is constrained in, and shaped by, institutions. The institutional context also shapes the strategies and the goals actors pursue (Thelen and Steinmo 1992: 8). Institutions usually exist in a state of equilibrium, with their operation in this equilibrium state following the logic of path dependency. Institutional change can be triggered by ‘triggering events’ or forces that punctuate the institutional equilibrium and initiate the process of institutional change. These events or forces may be relatively small, but if they occur at the right moment, they can have large and enduring consequences (Pierson 2000: 263).

Figure 3.1 provides a schematic representation of the Industrial Equilibrium Model and its elements. The institutional equilibrium is presented here as scales of equilibrium, representing the status quo in broadcasting institutions. The causal relationships between the elements of the model (as per the SCPP, with institutional performance being determined by the conduct of the firms in the industry, and with firm conduct being dependent on various structural variables and manipulated by the basic conditions of supply and demand and public policy, of which the latter also regulates the industry structure) are represented by red arrows. The feedback effects;

from performance to conduct, from conduct to structure, and from performance to structure, are presented by dotted arrows. It should be noted here that the lists of

‘factors’ in boxes representing industry structure, conduct and performance, are not exhaustive.

Figure 3.1: Schematic representation of the Industrial Equilibrium Model used in this study

In terms of the model, punctuations emanate from changes in the broadcasting environment, i.e. public policies, the industry structure or basic conditions. When powerful enough, these changes represent shocks that render old institutional configurations unfit for the conditions of the new situation arisen from such changes, and thus increase pressures for institutional change. Figure 3.2 presents an example of such a shock. In this hypothetical case, a change in public policy – the government’s decision to grant a broadcasting licence to a new broadcaster – represent the shock that punctuates the institutional equilibrium of a broadcaster, as it results in an intensification of competition in industry structure. This punctuation is powerful enough to render the broadcaster’s existing strategies and programming

policies impotent, as they can no longer address the changed market conditions effectively. This is eventually reflected in the performance of the broadcasting institution, with its viewing share shrinking, income declining and profitability deteriorating.

Figure 3.2: An example of punctuation in the institutional equilibrium emanating from a change in public policy

Since ‘institutional survival depend[s] […] on a process of institutional transformation, to accommodate powerful new actors and to adapt the institutions to address new imperatives, both economic and political’ (Thelen 2000: 105), broadcasting institutions need to respond to the imperatives set by the new situation by changing their conduct, i.e. established institutional strategies and practices, in a way the actors involved in the process deem suitable to address the situation. This change may be rapid or incremental-evolutionary (punctuated evolution). In both cases, actors’ logic in such a situation is driven ultimately by desire to minimise loss in institutional resources and power. As Campbell (2004: 176) put it, since ‘institutions are settlements over the distribution of resources or power that are reached through struggle and bargaining’, ‘anything that threatens to upset this distribution is a problem that could trigger new struggles and bargains and eventually institutional change.’ Changes in conduct will logically also influence performance of the

organisation – i.e. the television output – that represents the observable end product of a broadcasting organisation.

Figure 3.3 presents a visual representation of a hypothetical institutional response to punctuation that the institution takes to regain the state of equilibrium. The institution attempts to address the conditions of the new situation arisen from the punctuation outlined in figure 3.2 by changing its conduct. In this case, the institution amends its organisational strategies and programming policies. These changes are translated to changes in the broadcaster’s performance, i.e. changes in its viewing share and profitability, amongst others, with changes in the television output representing the visible outcome of the changes in the broadcaster’s conduct. If the actions are successful, the broadcasting institution will increase its viewing share and its profitability will eventually recover. It is noteworthy, however, that the actions are not necessarily successful, at least in the way the institution expected. They may not be sufficient to recover the viewing share or increase its profits. Once the institution has performed the changes it considers necessary to counter the impact of the punctuation, the institution returns to the state of equilibrium which it retains until the next punctuation. Thus, while institutions seek to regain the state of equilibrium, the model considers that institutions never reach a permanent state of equilibrium, but are in a perpetual state of flux.

Figure 3.3: An example of an institutional response to regain the state of equilibrium and the feedback effects it creates

Rather than treating institutions as passive subjects of change, the model accepts that industry structure is not exogenously determined since the conduct and performance of broadcasting companies often affect industry structure (Wirth and Bloch 1995: 17-18). Thus, the model allows for the impact of the feedback effects on industry structure. Similarly, the model accepts that the conduct of a broadcasting organisation is affected by its performance: it may come under pressure to change its institutional strategies if it fails to meet certain targets it has set for its performance in terms of e.g. audience share. An example of such a feedback effect is presented in figure 3.3. In this case, changes in institutional conduct and performance represent a feedback effect on the industry structure, which results in increasing homogeneity of programmes and intensifying competition. As other institutions need to adapt to the conditions of the market, these feedback effects may set off further punctuations in other institutions’ equilibria, thus generating a chain reaction that may result in extensive changes in other institutions in the market.