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Transparency: A Fundamental Ingredient for Government and the Economy

Submitted by on 14 Apr 2011 – 14:12

By Dr Don-Terry Veal, Director of Auburn University’s Center for Governmental Services

The leading issues surrounding the need for increased public trust in government continue to get attention from citizens, academics and government officials around the world. This is largely the result of dealing with recent tragedies, such as the coordination failure of governments following hurricane Katrina in New Orleans, the category 4 Cyclone in Myanmar, the Haitian earthquake rescue efforts, the mega earthquake that led to the tsunami and nuclear disaster in Japan, and the list goes on and on.

A Tool for Engagement with Governments

The need for better relationships among people and with communities is eminent in crises resulting from challenges surrounding the pro-democracy movements in Egypt, Tunisia, and possibly Libya. Such challenges continue to crystallize the demands for more transparency in order to increase public trust in government. The overall condition is that citizens want to feel confident that government is defending their interests.

Due to these recent crises, citizens and leaders worldwide are putting the issue of transparency at the forefront and endorse it as a vehicle for good government. Transparency is the growing signature ingredient for progressive dialogue when citizens attempt to engage with their governments.

When a government is transparent its citizens (and other observers) can see its inner workings—its processes, procedures, budgets, priorities, and plans. In a transparent government, citizens can also obtain the information they need to understand how important decisions, that affect their welfare, are made. Facts, timelines, records, documents, and other important informational artifacts are made available for public inspection when transparency is in place.

Exceptions for Transparency

There are practical exceptions to transparency, however. In the United States, for example, the Freedom of Information Act (FOIA) requires the government to keep secret information that, if disclosed, might harm national security, reveal the identity of law enforcement informants, or undermine a criminal investigation. Agencies also can withhold materials, such as records that reveal their decision-making behind the scenes, or matters of personal privacy.

Notwithstanding the FOIA, a transparent government is conducted so all can see what is going on, and knowing what’s going on inside of government is clearly the demand from citizens around the globe. In the end, transparency is viewed as a step in the right direction for it leads to a healthier economy through eliminating the corruption, which strengthens investments to communities, and raises public sentiments for government, which increases public trust.

Good for the Economy

Transparency is also good for the economy as a useful tool in countering corruption that hinders foreign investment. As communicated by the World Bank, when investors believe that a government operates on the basis of bribery, they are highly unlikely to enter that country’s market and risk heavy financial losses. Lack of foreign investment may lead to less innovation and eventual stagnation among local producers. As a result, consumers pay higher prices for products and suffer the possible harm of inferior products. To prevent financial loss, governments have to provide appropriate frameworks for greater transparency.

In the case of financial institutions, the lack of transparency on Wall Street led to irresponsible lending, greed and poor risk management causing a financial crisis that resulted in massive hardships for millions. Transparency is the necessary ingredient for accountability in financial institutions.

Whether dealing with challenges on Wall Street, or other vital national and international problems, the need for increased public trust is often linked to the need for increased transparency in government. Citizens have a right to know what is taking place within their governments in democratic societies.

A recent example of transparency as a global movement was exhibited when newspapers quickly criticized the government in Japan for its slowness. In this case, newspapers continued to demand greater transparency from government after the tsunami disaster. Similar demands were made for more transparency during the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. When transparency practices are not in place, the criticism stretches even to governments that are unaccustomed to participating in an open environment, such as the case with Japan, to governments that have mandates for transparency and fail to meet them, such as the case surrounding the Deepwater Horizon oil spill.

Citizen Support for Transparency

Governments with appropriate transparent institutions are more likely to produce positive reactions from citizens during a disaster. Now more than ever, cutting edge training for elected officials on transparency mandates, as well as on the principles of appropriate decision-making, is necessary in order to meet the expectations of modern day citizens. A goal of transparency should be to place decision makers in an open environment, so that ethical decisions will be made for their constituents, as well as to protect the integrity of the careers of governmental officials.

When trust, or transparency in government is high, opportunities for economic growth and progressive relationship building have a better chance of linking to sustainable jobs and greater opportunities for all people. In other words, a country’s economic future becomes more secure through transparency in government. We can never do enough to ensure the safety and trust of our citizens.