Tuesday, January 24, 2012
The Case for Government Transparency and Openess
The recent CPIB probe of high-level Home Affairs officers (the SCDF commissioner and the CNB chief) [See: MHA's statement] has resulted much mockery of the idea of that good (high) pay keeps people honest and un-corrupt. That idea makes sense, but one must do the math, and the math is all about risk and reward. The smaller the risk of being caught and the larger the reward, the more likely someone is to be corrupt. At a high enough level, one would actually face a lower risk of being caught. This is also why a past Minister of National Development was investigated for accepting $1M in bribes (in 1981-1982 dollars) (he committed suicide before being charged).
This presents a strong case for government transparency. When decisions are made with sizeable economic consequences (such as urban development plans), such information should not be kept secret for too long. (For property development, that might mean 1 to 2 weeks; for financial information, that might mean immediate release.)
Without such transparency in place, the ones to benefit would be crooked corporate interests in corrupt public servants, and there is no reason why crooked parties and corrupt public servants should be the main beneficiaries of information of economic value.
Transparency would improve economic efficiency. Economic interests with the capacity to take advantage of this information would compete for the business that that information generates. This would mean higher capacity, lower prices for consumers, the pressure to innovate, and an virtuous cycle of positive economic outcomes.
Postscript: To those who argue that we should trust "our own people", I am not convinced that we should rely on a large number of self-interested individuals to all be un-corrupt. There is bound to be some number who think they can get away, and a decent fraction of those who do. Instead, the system should guard against this through disincentives. I advocate strong institutions in almost all areas of government and business.