Freeman

IDEAS AND CONSEQUENCES

Two Cheers for Transparency

Private Think Tanks Inform Citizens on State-Government Spending

MAY 21, 2009 by LAWRENCE W. REED

Filed Under : Government Spending

If citizens knew more about how their governments really worked and what they spent other people’s money on, it would not only make for better-informed citizens but for better (and hopefully less) government at the same time.

That’s the theory behind a growing movement spearheaded by think tanks from coast to coast and in Canada. It’s called “transparency.”

Back in the 1980s this notion was the subject of an episode (“Open Government”) of the British television sitcom Yes Minister. The following exchange among three bureaucrats illustrates just how difficult this whole business can be.

A: “What’s wrong with open government? I mean, shouldn’t the public know more about what’s going on?”

B (with a look of disgust): “Are you serious?”

A: “Well, ah, yes, sir. I mean, it is the minister’s policy after all.”

B: “But it’s a contradiction in terms. You can be open, or you can have government.”

A: “But, but, surely the citizens of a democracy have a right to know.”

C: “No. They have a right to be ignorant. Knowledge only means complicity and guilt. Ignorance has a certain (pause) dignity. You don’t just give people what they want if it’s not good for them! Do you give brandy to an alcoholic?”

B: “If people don’t know what you’re doing, then they don’t know what you’re doing wrong.”

A: “I’m sorry, but I am the PM’s private secretary and if that’s what he wants, then . . .”

C: “You’ll definitely not be serving your minister by helping him make a fool of himself. Look at the ministers we’ve had. Every one of them would have been a laughingstock in three months had it not been for the most rigid and impenetrable secrecy about what they were doing!”

As governments at all levels have mushroomed in recent decades, shining light on their activities presents no small challenge. One of the earliest transparency initiatives, I’m proud to say, came out of the organization I headed for 20 years, the Mackinac Center for Public Policy in Michigan. In September 2001, Mackinac launched the website “MichiganVotes.org” (MVO)—a one-stop shop for finding out what the state legislature is up to. The site’s database now contains more than 16,000 bills, 15,000 roll-call votes, 12,000 amendments and 3,400 laws—all described in pithy, plain English and easily searchable.

What’s in the Sausage is on the Website

More than 30 years ago, then-California state senator H. L. Richardson penned a memorable little book with the revealing title What Makes You Think We Read the Bills? In Michigan the Mackinac Center started reading all the bills in 2001, hasn’t stopped since, and has trained site managers and editors to do the same thing for think tanks in nine other states. It has also posted on the web every collective-bargaining contract from every one of the state’s public school districts. It pushed many of those districts and some municipalities into posting their check registers online so people can see how and where their tax dollars are spent. While it’s debatable whether all this has yet made very many Michigan governments better or smaller, it has certainly made them more accountable—and controversial, too. Thousands of public comments on the MVO site suggest that citizens are increasingly unhappy with the sausage their political meat grinders are turning out.

Michigan governments aren’t the only ones coming under new scrutiny. The Texas Public Policy Foundation launched its superb transparency portal, TexasBudgetSource.com, about a year ago. It houses all the budget and spending information of state and local governments within the Lone Star State. More than just an online warehouse for this vital data, it also includes original analysis and commentary to illustrate trends in state spending. The Foundation estimates that the transparency efforts it has helped the state put in place have led to changes that are on track to save Texas taxpayers more than $8 million by the end of this year.

In Illinois, a state rocked by high-level government corruption and secrecy, the Illinois Policy Institute (IPI) is coming to the rescue. CEO John Tillman says, “By creating a culture of transparency, it will no longer be necessary to learn what the government is doing through a wiretap, as we did with (impeached) Gov. Rod Blagojevich. Online transparency is the first step to cleaning up Illinois once and for all.” IPI has recruited and trained 120 volunteers to promote transparency in their school districts, village boards, city councils, county boards, park districts, and every government body operating off tax dollars. It has tracked dozens of “transparency wins,” which it lists on its special website, OpenIllinois.org, and it is collecting pledges from elected officials to support putting all government spending online in a searchable database.

The Evergreen Freedom Foundation in Washington state publishes the “Hey, Big Spender!” index that keeps track of all increased taxes and fees proposed or cosponsored by every legislator. The Foundation ranks legislators and compares their records with each other, which has some at the top of the big-spender list squirming and squealing in embarrassment.

The Sam Adams Alliance, based in Chicago, sponsors the government transparency website SunshineReview.com. In its first year of operation this wiki-style project generated more than a million page views. Nearly all 3,140 counties in the United States have been evaluated against a ten-point transparency checklist on the site, which is becoming a standard that government transparency projects are measured against.

Virtually every member organization of the State Policy Network, the trade association of state-focused “free market” think tanks, is now leading or encouraging important new initiatives to pry government open. With the support of Gov. Mark Sanford, the South Carolina Policy Council has scored notable victories in getting the legislature to record the votes its members cast. The North Dakota Policy Council uses transparency arguments to advance tax reduction from its legislature in Bismarck.

A Lousy Record, Eh?

Transparency is becoming a cause célèbre in Canada too. The Fraser Institute produces powerful studies that inform people about the limits of the public sector. Its “Government Failure” series has exposed hundreds of instances of cost overruns, inaccurate reporting of financial information, unnecessary spending, improper program management, and violations of their own regulatory guidelines by governments themselves.

Fraser estimates “conservatively” that repeated government failure at the federal level alone cost Canadians over $100 billion in recent years. Says Niels Veldhuis, Fraser’s director of fiscal studies, “Armed with a more realistic understanding of the motivations of politicians and bureaucrats, the rent-seeking nature of interest groups, and the institutional constraints of government bureaucracies, readers are less likely to fall for what economist Harold Demsetz characterized as the ‘Nirvana fallacy.’ That is, they are less likely to compare market results with wildly idealistic outcomes that governments actually almost never produce.”

Private think tanks are serving the public interest by offering information citizens need to know. But that raises the questions, “Do citizens want to know?” and “Will they hold their leaders accountable for misbehavior?” Time will tell, but this much is clear now: You can’t act on information you don’t know.

ASSOCIATED ISSUE

June 2009

ABOUT

LAWRENCE W. REED

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s. Prior to becoming FEE’s president, he served for 20 years as president of the Mackinac Center for Public Policy in Midland, Michigan. He also taught economics full-time from 1977 to 1984 at Northwood University in Michigan and chaired its department of economics from 1982 to 1984.

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