Media Capture and Information Monopolization in Japan

In this paper, we investigate the unique institution of the Japanese press industry called kisha club system, which is deemed as the symbol of media capture by the government, and collusion in the media industry. By tracing through its history, we show how the institution has developed as a result of the government’s attempt to control the media, and the media’s incentive to use the alluring opportunity provided by the government to limit the rivalry within the industry. We find that the distribution of political power is a major factor behind the collusive press-politics relationship. By providing a simple model that links the distribution of political power and the media capture, we explain why this institutional arrangement has been so persistent in Japan. JEL Code: N00 ∗We appreciate a co-editor and an anonymous referee for their valuable comments. †Department of Economics, Northwestern University; [email protected]. ‡Department of Economics, Northwestern University; [email protected].