Archon Fung on the Dynamics of Transparency

Interviewed by Molly Lanzarotta on June 25, 2013

Transparency is often thought about in terms of disclosing information that the public needs or wants, for its protection, or for its own good. But with rapid and frequent changes in technology and the ways in which people consume information, how we understand transparency and its uses is also changing. Archon Fung, Ford Foundation Professor of Democracy and Citizenship, examines the impact of civic participation, public deliberation, and transparency on public and private governance. He is co-director of the Transparency Policy Project at Harvard Kennedy School’s Ash Center, and co-author of a new paper published in the journal Science, “Targeting Transparency.”

Q. In the past, when we’ve heard about the need for transparency, it’s usually been in the context of governments or corporations being compelled to act. But you’ve been studying a sort of “bottom-up” or crowd-sourced transparency. Say more about that.

 

Fung: In the private sector, lately we’ve seen all sorts of examples of decentralized transparency in which individuals, usually as consumers, participate in online forums and rating sites — like Amazon product ratings or TripAdvisor, ratings of hotels or airlines, or ratings of books and movies like Netflix — and that kind of transparency helps others understand what people like them think about a particular experience.

Those are examples from the private sector of decentralized and individually constructed transparency. Now we are beginning to see some examples of decentralized transparency, or what we are calling socially-networked transparency, in the public sector, applied to public problems.

Let me give you a few examples of those. One of the earliest and most prominent examples is called Ushahidi. Ushahidi is a website created in the late 2000s to monitor election violence in Kenya. There were too few election monitors and too few journalists to cover a fairly large country in which there was a perception that violence was widespread around the elections. So some social and political entrepreneurs created Ushahidi where individuals could document incidents of election violence. The platform generated a map of all of the reports of violence occurring after the elections in Kenya. That platform, Ushahidi, has since been deployed dozens of times for all sorts of purposes, including disaster relief.

Another interesting example comes out of some enterprising developers and entrepreneurs at the MIT Media Lab. Following the Fukushima nuclear disaster in Japan, there was widespread concern about radiation levels. The Safecast project at MIT developed some portable radiation monitors and distributed them to volunteers all over the area in Fukushima so that people could collect ground level radiation samples. Through Safecast, they provided a map of radiation levels at the ground level all around the Fukushima area. According to some reports, what they saw was at some variance with government reported radiation levels. This tool provided a way of holding government accountable by creating a different source of measurement and information in that circumstance.

Q. How should we understand transparency as a policy tool today? Is transparency always good?

 

Fung: I think the debates around transparency come from people concerned with two different problems. Some people favor transparency because they worry about government action — either governments being corrupt, spying on people, or supporting politicians and campaigns with undue contributions and exercising some undue influence. So a big part of the transparency movement is concerned with opening up government and making government more transparent in order to make it more accountable. And that’s a very good thing; it’s important for government to be transparent and to be accountable to citizens.

Another part of the transparency movement that reflects different concerns and operates in quite a different way is transparency proponents who are concerned with the accountability of private sector actors — primarily private sector corporations, but perhaps also non-governmental organizations and foundations, and so on. And here the worry is that corporations can do all sorts of things that create risks for consumers and investors and citizens: making unsafe products or providing services that don’t perform very well and create risks for people, or even deception in the case of financial services and products and home loans. Here the idea is that consumers will be able to defend themselves and avoid risks with greater private sector transparency.

Now, there is no reason in principle that we can’t have both more government transparency and more private sector transparency. Indeed we can have both, but they can come into tension because the main way in which we make private sector corporations transparent is through the laws and policies of government. So one blind spot of the current open government policies and debates is that they create transparency systems for government that focus on government messing up, but don’t register when government is doing well. Government accountability through transparency these days is a lot like an Amazon rating system in which government can only get one or two stars because the transparency focuses on government making mistakes and not so much on government doing well, or ways in which government actually aids transparency in the private sector through laws and regulations.

Q. What about voluntary disclosure? How much does the government need to be involved in requiring disclosure of information? Is relying on self-disclosure – for environmental or regulatory purposes for example – ever realistic?

 

Fung: Transparency of the private sector often begins in the wake of some scandal or disaster that puts pressure on private sector actors to become more transparent, through an environmental disaster or the recent very tragic factory fire in Bangladesh in which so many workers were killed. In the wake of a disaster like that, the corporations and other actors who were involved often come under pressure to become more transparent. And that pressure can take two different forms. Sometimes it takes the form of laws and policies. So for example, after the Union Carbide disaster in Bhopal India in 1984, a law was passed in the United States that required chemical companies to become more transparent about what kinds of chemicals and pollutants they were releasing into the atmosphere. Sometimes however, the private sector actors respond to that pressure by voluntarily becoming more transparent. For instance, in response to complaints and worries about child labor and sweat shop labor, apparel manufacturers have become a little more transparent about where their products are being manufactured all around the world and sometimes what factory conditions are like in those places.

Voluntary transparency is certainly an advance over no transparency at all; however, voluntary transparency does have its limits. In particular, voluntary transparency is often limited to the private sector actors, the corporations that face the most pressure to be transparent. Other businesses and companies in the same industry can choose not to become transparent when they don’t face that type of pressure. The advantage of regulation and building upon voluntary transparency is that it creates uniform standards and requirements for everybody to be transparent and to make that information available in a way that is standardized and uniform and lots of people can understand and work with the information.

Q. What needs to happen moving forward to ensure that transparency systems are effective?

 

Fung:In order for transparency systems to be effective there are two kinds of problems — there are political problems and there are policy problems.

The political problems all stem from the fact that transparency systems that are effective and do some good for the public almost always impose costs and hurt somebody else. In particular transparency systems oftentimes hurt the parties that are being made transparent, whether it’s some agency of government or some type of private sector corporation that is compelled to disclose information that they otherwise would not disclose by some transparency law or policy or requirement.

The actors that tend to lose from transparency will organize themselves to block transparency requirements or water them down. One of the cases that we point to is the case of public safety restaurant disclosures from Los Angeles County. In Los Angeles, every restaurant is required to post a letter grade on its front window — an A, B, or C grade that reflects the health and safety inspection rating of that restaurant. This is an extremely effective transparency policy because consumers care about whether or not they are going to get sick if they eat at a restaurant, and so they act on the information conveyed by that A, B, or C report card. Many other cities do not have those report cards in part because restaurant associations have blocked those kinds of reforms or watered them down. Restaurant disclosure on the web is much less useful I think than restaurant disclosures in the form of a report card on the front door. So that illustrates the general political obstacle that people who stand to lose will organize in order not to be more transparent.

One critical step in making transparency policies effective is organization on the other side, because transparency policies that are effective oftentimes generate benefits for a much larger group of people — consumers or investors or even citizens in the case of government corruption — and the one key to effective transparency is for that much larger group of people to organize themselves to advocate for transparency policies.

Besides the political problem for transparency, there is the policy problem. The challenge is to create and design transparency policies that actually work for people and don’t just waste time or create a bunch of information that’s difficult to understand or make organizations go through the fairly expensive processes of collecting information that nobody then goes on to use. The policy challenge has to do with designing transparency policies so that they produce information that is actually highly valuable to people and that people can take action on. So the L.A. restaurant example is an effective transparency policy because the audience for that information — the people who go to restaurants — can do something with the A, B or C grade. They can go on to the next restaurant. So that’s really important — that there be an audience for the information and that that audience be able to act on the information in socially beneficial way.

Another challenge for policymakers is to design transparency policies in real time, in a dynamic way, because transparency policies always run the risk of being obsolete because times change, technologies change, and the issues that are important for transparency policies and information that is relevant today will no longer be as relevant tomorrow. Transparency policies need to be updated to reflect that obsolescence in real time. For instance, financial regulations that require a certain kind of disclosure at one point in time will face the challenge that new financial instruments and new techniques and practices come into play. Regulators of financial transparency need to recognize those changes and update the laws and regulations as the financial industry itself evolves and develops over time.

Q: Where the do the Assanges and Snowdens of this world – the people who force transparency in very controversial ways – fit into the picture?

Fung:The issue of national security poses great challenges for both advocates of transparency and privacy and those who are concerned about security. In the Transparency Policy Project, we haven’t looked directly at national security policies. However, as a scholar of democracy and as a citizen of a democracy, I think it’s important that however we strike the balance between transparency on the one hand and privacy and security on the other, that the principles governing the tradeoff between transparency and national security be made in a way that is democratic. The reasons behind those decisions need to be clear to people and a majority of the democratic public at large needs to understand and endorse the point at which the balance is being made between privacy and security.


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