The Meaning of Transparency – A Perspective (as reprinted from aidinfo.org)

Transparency has been one of the hot buzzwords in the international development field over the last decade, and one so hot that it dominates or influences many discussions and initiatives taking place in the industry.  For advocates of greater openness, it has been fruitful to watch and to borrow a phrase from the American civil rights movement it has been ‘a long time coming.’

Given man’s natural proclivity to look over his shoulder, it is possible to identify underlying drivers of why “transparency” is in vogue.  For example, in 1966, Lyndon Johnson signed the Freedom of Information Act. C-SPAN began gavel-to-gavel coverage of the U.S. House of Representatives in 1979. In 1986, in response to the Bhopal, India tragedy, the U.S. Congress passed The Community Right-to-Know Act that created a Toxic Release Inventory, a public record of pollutants released by manufacturers.  In the mid-1990s, the rise of the Internet and email communications allowed isolated groups and individuals to interact with alacrity on issues of mutual interest.  Over the past five years, the emergence of social media tools expanded and accelerated this reach.  And, perhaps of most relevance to international development organizations, in the aftermath of the Cold War, civil society focused more closely on the international financial architecture regarding its role in reducing poverty in developing countries, improving the environment and fostering the global economy.  (This list is by no means comprehensive, so please feel free to offer other events and opinions below.)

Transparency, however, has not historically been a natural inclination for development institutions. Development agencies have been instinctively wary of greater openness of information about institutional activities and actions. Internal actors have reasons and those reasons when put into perspective are not unreasonable. Public disclosure reveals mistakes as well as successes, but mistakes are much more interesting to scrutinize: Remember it is bad news that sells newspapers. And just as in any other type of bureaucratic institution, many employees are focused on long-term careers and personal security.  Exposure of missteps is an anathema.  From their perspective, transparency has other important shortcomings.  Bureaucratic players accrue power and responsibility over time and by increments.  Greater transparency allows additional actors to participate, thereby reducing the power and ability internal actors have to regulate policy and events.  Nor do they find comfort in how external participation may dilute and delay the decision making process. Over the years however, pockets of transparency advocates have grown within development agencies, working on the inside and at the forefront of the transparency debate to encourage their respective organizations to join the movement. Their involvement has been important in terms of influencing aid providers to adopt transparency measures and policy.

The counterfactual, in my view, is far more important for it focuses less on the gain or loss for the institution or the individual and focuses more on the gain or loss regarding the end objective.  When public institutions are free to make decisions behind a veil, then it will be less likely those decisions will be made with full information.  It will be less likely these institutions secure support for their objectives, because it will be harder for stakeholders to understand how and why those decisions were made.  Moreover, in the case of international development agencies, it will make the likelihood that policy or project implementation will be less successful if targeted audiences are simply recipients of aid as opposed to participants in the decision-making process: In other words, to increase their influence, international development institutions would better serve their constituencies and themselves if they are orchestrating rather than dictating.  Finally, it will be more difficult to determine accountability for decisions involving public funds that negatively impact stakeholders thereby reducing their trust of those institutions.

It has been suggested that greater transparency will result in development institutions becoming more risk-adverse.  This argument has validity.  By further opening the decision making process to public scrutiny, development agencies will take fewer chances in an industry where some risk taking is necessary.  Instead, these organizations will engage in safe or sure bets, institutionalizing incremental gains over protracted time frames in an environment where people living in abject poverty need help now.  However, one may also argue that greater openness would reduce the amount of decisions that lead to bad results.  These advocates would also suggest that over time, as greater transparency assimilates within a culture, it will evolve to be seen as an appropriate process for making decisions and allow greater risk taking over time.

In my 2010 book, The World Bank Unveiled: Inside the Revolutionary Struggle for Transparency, I offered a personal interpretation on the meaning of transparency.  “Transparency means openness and accountability, but it also suggests something else: Inclusion.  Without it, the rest of what transparency’s proponents seek to achieve is hollow.”  Please note, this did not suggest that I believed transparency was the end goal, but rather a means to an end.  I think of transparency as a three-sided paradigm: Openness, accountability and inclusion/participation.  When one side of the equation is missing, then the others are weakened and the paradigm becomes powerless.  Also note, I did not say everything should be open to public view or scrutiny.  In the international development field, it is appropriate that some information shared by and with government clients should remain confidential.  The argument, for advocates on all sides, is where that line in the sand should be.

Why then is transparency so important?  It leads, I believe, to better and more holistic outcomes.  James Wolfensohn, former president of the World Bank, offer his viewpoint on the subject.  “I have made fighting corruption a core activity of the Bank’s agenda during my tenure,” he once said.  “The key to fighting corruption is promoting transparency in developing countries.  Transparency reduces opportunities for corruption.  The reduction of corruption leads to good governance.  Good governance leads to development.  Transparency is the key.”  I think that it a useful interpretation on the value greater transparency provides.

In my next note, I will identify how transparency is interpreted by other actors in the development field and some of the key battlegrounds today.

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