 |
|
|
Subscription is free and allows you to receive email newsletters, alerts, and
to access a comprehensive member directory and network with other development professionals.
Sign-up here
|
|
|
|
|
| Special The requested resource (/editor/default/) is not availableReport |
|
|
|
The requested resource (/editor/default/) is not available
| |
Transparency Matters: The ‘Second Generation’ of Institutional Reform |
| |
Commentary from Daniel Kaufmann, Director, World Bank Institute Global Programs |
 Daniel Kaufmann, Director of WBI Global Programs, has helped pioneer new empirical approaches and survey methodologies at WBI that have resulted in action programs on good governance and anti-corruption capacity building. Previously a Lead Economist for economies in transition in the World Bank research department, he headed a Capacity Building team for Latin America and has published widely in leading journals regarding economic development, governance, the unofficial economy, and trade. Kaufmann is a native of Chile. |
|
|
| By Daniel Kaufmann |
| Sunshine is the best disinfectant. |
This popular saying encapsulates in a few words the importance of government transparency. Yet, given the broad — and at times vaguely defined — nature of the term, too often there is plenty of rhetoric (or elaborate writings) about the topic, but a paucity of concrete actions where it matters. Granted, over the years there has been progress in many countries in certain areas of transparency, such as in reporting on key economic statistics by the governments and central banks. Yet, even on these, there are many countries that are still lagging behind, while in other key dimensions of transparency, such as in political and institutional areas, there are enormous gaps. Through various complex mechanisms, insufficient progress on key areas of transparency is nowadays a major impediment for development.
While there is no one agreed upon definition of transparency, the various possible approaches to the term have much in common. In recent papers, the World Bank Institute has described transparency as the increased flow of timely and reliable economic, social and political information, which is accessible to all relevant stakeholders. And specifically WBI has stressed that there are four key components to this information for it to be regarded as transparent: i) accessibility; ii) relevance; and, iii) quality and reliability. (For details, see http://www.worldbank.org/wbi/governance/pdf/tarawish.pdf)
Transparency minimizes the risks of financial crises
Transparency is key to minimizing the risks of financial crises. Witness the lessons learnt from the absence of transparency leading to the Asian financial crisis of the late 90s, as well as the collapse of mammoth corporations such as Enron and WorldCom. Generally, where countries do not produce and report basic financial and economic information in a very timely fashion, the likelihood of a financial crisis is higher.
Transparency is also fundamental for enabling sustained development and growth. For instance, there is increasingly clearer evidence of the link between improved transparency and higher national incomes. This is due to a number of reasons. First, having effective information flows are important in ensuring that resources are efficiently allocated, that it results in more competition (and not monopolies), and more and better investments. As shown by recent studies, international investment flows are higher - and investments tend to be of higher quality — in countries with more transparent policy environments. Such transparency requires governments to provide timely and complete information about macroeconomic developments and policies.
Second, because “sunshine” is a major deterrent to corruption and capture of the state through grand corruption, i.e. where obscurantism and a “tight lid” prevail over information flows, in many settings a small cadre of potentates are enabled to “purchase” the laws, rules and policies of the state for their own benefit at the expense of society and poverty alleviation. Thus, transparency also promotes development indirectly, through better control of corruption and capture, which in turn we know are brakes to development and growth.
We also ought not to lose perspective on another very important dimension as well: an effective and transparent flow of information is also a basic democratic right. An electoral process can easily be manipulated where information is controlled and biased, and where access to information by the citizenry, as well as equal access to the media by all candidates, are absent. Indeed, freedom of expression and freedom of the press are important components of a transparent society, as is the broader notion of civil liberties. And the linkages between these political dimensions of transparency and developmental results need to be highlighted further. Our research at the World Bank has shown, for instance, that freedom of the press is associated with better control of corruption, and closer to “home”, we have also found that where civil liberties are better safeguarded, the effectiveness of World Bank funded projects is higher.
In this context, higher levels of transparency and effective information flows can be seen as major “empowering” tool for the citizenry and, through it, for redistribution and poverty alleviation since it exposes inequalities and abject poverty, and enables effective policy response. As the Nobel laureate Amartya Sen has potently pointed out, no country with a free press has ever experienced a famine; the challenge has not been overall unavailability of food, but unavailability of information as to what was really transpiring.
Freedom of Information laws
Access to government records and information is a necessary pre-requisite for enhancing transparency. Access facilitates public knowledge and discussion; it provides an important guard against abuses, mismanagement and corruption, and it can also be beneficial to governments themselves. Openness and transparency in the decision-making process can assist in developing citizen trust in government actions and maintaining a civil and democratic society.
Governments around the world are increasingly making more available information about their activities. Over fifty countries around the world have now adopted comprehensive Freedom of Information (FOI) Acts to facilitate access to records held by government bodies and over thirty more have pending efforts. Over a dozen countries in Latin America and Asia, for instance, have recently adopted laws or are on the verge of doing so. Openness is also starting to emerge in many southern and central African countries. South Africa enacted a wide reaching law in 2001, and alongside countries like Mexico and Bulgaria, are quite advanced nowadays with respect to access to information.
However, the enactment of a FOI law is only the start. It may be a necessary condition, but it is not a sufficient one for transparency. There are countries that have passed FOI laws and yet their effective transparency has not markedly improved. For it to be of any use, these laws must be effectively implemented, and complementary measures need to be taken. For instance, there are many governments that have adopted FOI laws, but have not joined the voluntary ROSC standards for transparent fiscal disclosure recommended by the IMF. Also, bureaucracies within governments need to change their internal cultures, quickly moving away from the old habits of controlling information to a mindset where one provides quality information in a quasi-automatic form unless there is a very specific exceptional provision barring such type of information being made public, say, due to national security reasons, justified in some detail. Further, civil society and many important NGOs working on these issues must put the adopted FOI laws through effective tests, demanding specific information, and publicly codifying the successes and failures in accessing to transparent information.
Exercising Rights to Citizens’ Access
Indeed, access laws will be ineffective if citizens and non-governmental organizations lack the capacity to exercise their right of access. In some smaller jurisdictions, for example, the media are less likely to use access laws because they cannot afford to hire skilled reporters or support lengthy investigations of public institutions. The mere existence of an act does not always mean that access is possible. In some countries Freedom of Information laws are in name only. The Zimbabwean Protection of Privacy and Access to Information Act, for instance, sets strict regulations on journalists and its The requested resource (/editor/default/) is not availableaccess provisions are all but unused.
In fact, in many countries, the implementing rules deliberately undercut the rights set out in the law. The Panamanian Government enacted a law in January 2002 and then promptly adopted a rule that requires that individuals show a legal interest, a deliberate contradiction of the law. Independent oversight bodies are weakened by lack of funds which prevent timely appeals. Excessive fees are often charged in some countries to prevent requests. In Ireland, the law was amended in 2003 to impose high fees for those appealing decisions. In Australia, the Commonwealth law’s fees for appeals are so high that few are able to afford to do so. To succeed, these restrictions must be absent. Civil society, the media and other political actors have an important role in publicly criticizing restrictions and bringing about pressure on government to change such regulations. Courts, parliaments (and their committees) and ombudsmen can also play an effective role rejecting government decisions that are anti-transparency.
The potential of transparency-related reforms has been under-exploited: these reforms are likely to be the key dimension in the ‘second generation’ institutional reforms, and thus central for progress in the next stage, and a key input to anti-corruption and improved governance. For instance, in countries where high level corruption is evident in the form of capture of public policy by a few economic potentates, traditional civil service reform or public sector management measures will not address the problem.
Transparency Advances Reforms
Instead some transparency-related measures could help make a dent, such as: i) wide dissemination of diagnostic data and indicators codifying and monitoring the challenge; ii) supporting media development and freedom of the press; iii) disclosure of assets and incomes of public officials and legislators (and their dependents); iv) disclosure of political campaign contributions by firms, v) transparent and pro-competition lobby laws, and, vi) ease of access to publicly available record of parliamentary debates and voting records. In some settings, introducing transparent competition based on governance performance across localities may result in more emphasis in working at the subnational level.
We need to be mindful that any example starts at ‘home’. The World Bank has made significant progress in terms of its own transparency as compared with ten years ago, be it in access and disclosure of project documents, or in publicly barring from procurement firms that have been found to be engaged in corruption in Bank-funded projects (the Bank is the only multilateral organization publicly delisting firms). The Bank has also made major inroads in terms of public access and dissemination of its vast databank on governance, comprising indicators for a vast array of governance dimensions for the whole world (more than 200 countries in fact) – illustrating the ‘power of data’ in introducing additional transparency and providing impetus for further governance reforms. Yet at the same time nobody should rest on ones laurels: in the next phase, at the Bank, some additional transparency-related measures could be potent in this context as well (such as already shown by the pioneering public debarment of firms and the public availability of the governance databank).
Further progress is desirable and feasible regarding the Bank’s effective access and provision of information and documents to the public. The recent exemplary country government cases of access to information reforms--such as in South Africa, Mexico and Bulgaria, for instance, which are by now ahead in some respects of some richer countries and the Multilateral Development Banks in terms of key access to information dimensions — serve as cases to emulate for many other countries and for multilateral development banks alike.
In this respect, it is always salutary to be rigorously monitored by civil society and NGOs. For instance there is a recent assessment pointing to the remaining challenges in terms of access to information in the multilateral development banks carried out by the Bank Information Center, a Washington, D.C.-based NGO which monitors institutional transparency. These types of initiatives, monitoring the prominent multilateral organizations, as well as increasingly for all governments, are important for continuing to involve the people and outside experts in deepening transparency in all public organizations, and should continue to be complemented by the production and public dissemination of worldwide governance and transparency-related indicators.
Resources:
World Bank Governance
Major Governance Databank
Keynote Presentation on Transparency, Mexico International Summit on Access to Information, February 2005 |
|
|
|
|
|
|
The requested resource (/editor/default/) is not available
|
 Rhoda Kadalie, executive director of South Africa’s Impumelelo Innovations Award Trust
Read  | |
 How did Development Gateway members respond to our Public Sector Transparency Survey questions?
|
| How does global transparency measure up? Charts and graphs on how transparency measures up. Click here. |
 |
|
|
|
|
|
Email this page 
Sign-up