Transparency For What?

"Transparency" was probably the word of the year for 2009, at least in policy circles. At the federal level, President Barack Obama's memo on his first day in office promised "an unprecedented level of openness in Government ... transparency, public participation, and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in Government." Justice Louis Brandeis' line that sunlight is the best disinfectant went from insight to cliché and beyond in a short time.

The Web site recovery.gov has become the centerpiece of the government's effort to make every knowable bit of information about spending under the American Recovery and Reinvestment Act (the economic stimulus) available to the public and will be the centerpiece of Obama's transparency agenda. Other sites, such as data.gov, are opening up the vast amount of information the government has held for years. Transparency involves not just making information available, however; it also involves using the Internet, database technology, and graphic interfaces to make information accessible and useable for citizens to do their own research and make their own judgments.

The "transparency movement" encompasses far more than government spending and the data governments collect. Political reformers were among the first to push for total transparency of campaign contributions and spending; "report cards" on schools, doctors, and bank lending practices have been important mechanisms to further public goals without additional regulation. The push for transparency extends to the private sector as well, especially in the wake of the financial crisis -- after all, the context of Brandeis' original line referred to a proposal requiring disclosure of investment bankers' fees.

The transparency movement may also be one of the few initiatives in recent American political culture that is thoroughly bipartisan, or more accurately, cross-ideological. Because it challenges those in power who often control access to information, it has appeal on both ends of the ideological spectrum as well as to more centrist good-government activists and advocates for consumer protection. The basic theory of the transparency movement is Brandeis': "Publicity" prevents the corruption that is almost inevitable in closed processes (especially when money is involved); information allows citizens to participate in democratic decision--making; and this knowledge makes people better "consumers" of both public and private goods and allows voters more effectively to hold politicians accountable. From these forces, it is assumed, better public policies will emerge.

However, as we'll see below, as long as people differ about what they consider better public policies, they will give priority to different aspects of the transparency agenda.

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This cross-ideological alliance has been particularly influential when it comes to transparency in state budgetary decisions. While the federal government has always provided fairly robust budget information -- albeit not at the granular level of recovery.org -- which think tanks and advocacy groups aggregate and make accessible, state data is often obscure, even from legislators themselves. The notorious "three men in a room" who make budget decisions in New York state (the governor and leaders of the legislative bodies), the predawn votes in California and other states, and the provisions hidden in off-budget categories not only make it impossible for citizens to participate in government; they severely limit the ability of even elected officials to do their jobs and to create a broad constituency for better data. And the traditional means of obtaining and distributing information about state budget choices -- newspapers -- have been disappearing from the field at a rapid rate. An April 2009 study by the American Journalism Review found that the number of reporters covering state government declined by 32 percent over the previous six years.

To replace this loss, and to open the obscure and often closed process to public understanding, state budget groups such as the Massachusetts Budget and Policy Center, which are associated with the generally progressive, authoritative Center on Budget and Policy Priorities, have been leading the push for budget transparency for some years, setting out guidelines and best practices to make the information useful to citizens. In 2007, conservative anti-tax advocate and organizer Grover Norquist joined forces with Ralph Nader on a campaign to ask states to make all expenditures public on a single Web site, an effort sometimes referred to as Government 2.0. So far, 19 states have responded with some expansion of the budget information they make available.

The differences between the Norquist-Nader proposal and the best practices put forward by groups like the Massachusetts Budget and Policy Center are revealing of the differences in approach behind the unified facade of the transparency movement. Norquist and Nader's approach might be called micro-transparency: Their model legislation calls on states to dump every bit of data possible onto the Web. This includes, to quote the Oregon bill as introduced, having "each state agency ... maintain a copy of each monthly statement for all its credit cards" used by employees and requiring each month's statement to be made available on the Internet within 30 days after it was paid, with only the credit-card number deleted.

The language its sponsors used on introducing the bill reveals the assumptions behind such an approach: "Transparency is important because, in the end, there is no such thing as government money; it's only taxpayer money in government hands," said Gene Whisnant, an Oregon state representative.

This brand of micro-transparency is based on an assumption of corruption and waste. A blizzard of tiny data points, without context, does not improve government or help citizens make decisions. It can generate newspaper stories about small items of wasteful spending, but as Charles Sheketoff of the Oregon Center for Public Policy points out, "If the media could find $1 million of waste every day, it would still be less than 1 percent of the state budget." At a time of economic and fiscal crisis, when states have to make bigger decisions about spending cuts and tax increases, a focus on small items, along with the assumption that government is wasteful and corrupt, hardly increases citizens' ability to think about the choices ahead.

Advocates like Sheketoff tend to focus both on that bigger picture and on a different set of details than credit-card bills, such as complex tax provisions. Sheketoff says the goal of transparency should be to help citizens, advocates, and legislators put the budget "in perspective." He says he practices "social math" when he speaks to citizens' groups, asking them to make sure they know the largest source of state revenue and the largest spending categories and understand the difference between a million and a billion. The transparency legislation as enacted in Oregon incorporated many of the practices intended to increase understanding, not just data, including a requirement that the Web site created "should teach users about how state government works and provide users with the opportunity to learn something about how state government raises and spends revenue."

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Putting the budget in perspective also means focusing on more than spending -- in most states, tax expenditures, or spending through the tax code, rival other forms of spending and often aren't fully reported, even in the most general terms. While the U.S. Treasury has reported tax expenditures since 1974, most states only recently developed tax-expenditure reports, nine states don't publish them at all, and as the Center on Budget and Policy Priorities (CBPP) points out, most of those that do omit crucial information, such as how many households or businesses benefit.

Tax expenditures are a perfectly legitimate tool of public policy, but at both the federal and state level, they receive far less scrutiny than direct spending does. At the state level, almost all spending is determined by annual appropriations, forcing constant review of decisions. But tax expenditures usually become a permanent part of the state's tax code: Georgia, for example, spends $4 million a year on a sales-tax exemption for videotape rentals that has never been reviewed. And because of their complexity, tax expenditures can run out of control or help hidden beneficiaries without public scrutiny -- Sheketoff cites an alternative-energy tax credit passed in Oregon that benefited Wal-Mart, which got an $11 million tax credit in return for a $7 million investment. A similar tax credit in Arizona, for alternative-fuel vehicles, cost $680 million in its first year, although when passed it was estimated to cost $3 million to $6 million.

The Nader-Norquist model bill doesn't even mention tax expenditures. A more nuanced and useful approach to transparency would open up these often-neglected areas of budgeting, ensuring that citizens and legislators at least know about these arrangements. The best practices recommended by the CBPP?linked groups also try to put all spending, direct and through the tax code, in perspective: The Massachusetts group's recommendations, for example, ask the state to differentiate between permanent and onetime costs, to show historical information on each budget category, and to show whether budget changes represent the amounts needed to continue current services or a real increase or decrease in services.

The information produced by these initiatives has in turn helped feed a new medium for citizen access to information, in the form of state-level blogs that cover politics and government. Some, such as MinnPost, were founded by journalists and have a specifically journalistic purpose; others are more ideological in nature. The combination of state-government transparency initiatives, state-level think tanks that can make sense of the information, and the network of blogs and other outlets hold the promise of replacing, and perhaps even surpassing, the work traditionally done by journalists.

Earlier this year, Lawrence Lessig -- a legal scholar and recently a political reform advocate -- wrote an important article called "Against Transparency" in The New Republic. Lessig argued that much of the transparency movement in all its forms was more focused on "naked transparency" that was "not going to inspire change. It will simply push any faith in our political system over the cliff." Much transparency encourages cynicism, invades privacy, or actually obscures important facts in a sea of data points -- such as state employees' credit-card bills. The distinction between that form of naked transparency and the kind of transparency that encourages real understanding, civic participation, trustworthy government, and better policy, is illustrated by the unfolding debate over making state budgets more accessible.

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