Abstract
This paper proposes “the revised Lipset hypothesis” – “Higher freedom of the press can promote democracy” to explain the process of democratization recently. When we discuss the relationship between freedom of the press and democracy in the literature, we find one question: “It’s government to decide the degree of press freedom and democracy. What’s the incentive for government to supply higher freedom of the press and democracy?” We then present an equilibrium model of the interaction between corrupt government officials and people to show that “Increasing people’s personal knowledge in providing freedom of the press privately is the reason for freedom of the press being an instrument to promote democracy”. We also give an empirical model to test it. We find the evidence of a significant relationship between more freedom of the press and higher degree of democracy. Simultaneously increasing degree of freedom of the press and democracy is induced by the extension of the market. Besides that, we also test the institutional effects in the political structure. It shows that political structure is also an institutional factor between corrupt government officials and people. This result is robust to specification and the relationship is not sensitive to the choice of a particular measure of these variables, such as democracy, economic freedom and political structure.