A few years ago, I sat at a table in a Washington think-tank with a group of mid-level Japanese officials. They were spending several weeks in the United States on a study tour, and I was meeting with them to give a talk on governance and access to information. Japan had recently passed, but not yet implemented, a sweeping freedom of information law, and the bureaucrats were puzzled about how they were to implement it. Or even whether they should implement it. After all, as one earnest young woman asked, if the government starts giving people information, they might want to do something with that information. “And what if they use it the wrong way?”

That question, and the fear that lies behind it, has come to cast a dark shroud over what had become a powerful movement in the world: the trend toward greater transparency. Inspired in part by long-standing US arguments about the value of openness and transparency as the bedrock of democracy, the driver of prosperity, and even a guarantor of security, citizens around the world are demanding that their governments open their files. And governments are responding. From Mexico City to Johannesburg to London to Tokyo to Beijing, governments have adopted new laws and regulations on access to information.

This trend toward transparency holds great promise for improving the state of the world. It is indispensable for reducing corruption—indeed, many of the citizens’ movements that have campaigned for the right to know got their start as anti-corruption efforts. But the benefits of transparency extend well beyond enabling citizens to clean up dirty governments. Even honest officials make mistakes that need correcting, and transparency is the most effective error-correction system humanity has yet devised. Transparency can contribute to efficient and effective governance by providing feedback channels, enabling officials and citizens alike to evaluate policies and adjust them accordingly. It provides a means of detecting, and thus correcting, errors in the policies of governmental and inter-governmental institutions—errors that in the era of global integration can wreak havoc on bystanders if left uncorrected.

Moreover, as democratic norms spread, it is harder and harder to maintain societal consensus on decisions reached in secret by small elites. Publics in some countries have proved willing to accept painful economic reforms, but only when they have been fully consulted and kept fully informed. Increasingly, transparency is seen as an essential component of democracy itself, part of the empowerment of ordinary citizens so that they can take meaningful part in shaping the decisions that affect their lives. In theoretical terms, transparency is valuable because it makes it possible to overcome what social scientists call “agency” problems. In any large society, principals, such as citizens or shareholders, delegate decision-making responsibility to agents, such as a government or corporate management. Problems arise because the principals are never able to perfectly monitor their agents. The whole point of having agents, after all, is that it is too costly and time-consuming for the principals to keep themselves fully informed. The principals necessarily know less about the situation the agents face and the actions the agents take than the agents themselves do. And the agents have strong incentives to keep their principals in the dark, both to protect themselves against being accused of making mistakes and to reap personal gains.

In short, transparency often requires that agents act against their own interests, disclosing information that can be used against them. Consequently, it is not surprising that increasing the level of transparency usually requires a struggle. Sometimes this is to hide nefarious evil-doing, but often the motives of those who prefer secrecy are actually good. Government officials argue that they need to have their decision-making processes protected from excessive scrutiny to avoid having that decision making bog down in a morass of special interest pleadings. Corporate leaders fear that competitors will steal trade secrets if too much is too widely known. Law enforcement officers cannot hope to catch the bad guys if the bad guys know too much in advance. And clearly, in times of war, nations need to hide military secrets from their adversaries.

Demands for Transparency

There is a long history of demands for open flows of information in both politics and economics. Sweden got off to a relatively early start with a law passed in 1774, but it took nearly two centuries before other countries started following suit. But the importance of public access to information was often noted. One of the framers of the US Constitution, James Madison, wrote compellingly on the importance of information in a democracy: “A popular Government, without popular information, or the means of acquiring it, is but prologue to a farce or a tragedy, or perhaps both. Knowledge will forever govern ignorance, and a people who mean to be their own governors must arms themselves with the power which knowledge gives.”

In the private sphere, corporations have found themselves facing demands for disclosure of financial data for almost as long as publicly held corporations have existed. Great Britain experimented with disclosure laws starting in the mid-1800s. In the United States, starting in the early 1900s, large numbers of small investors proved they were able to put substantial political pressure on the government to institute corporate disclosure standards that would protect them from deceit and insider dealings.

After World War II, with the expansion of governmental bureaucracies in many countries and with the emergence of multinational corporations and large inter-governmental organizations came new concentrations of power able to withhold information from people whose lives they affected. At the same time, the Cold War led to the rise of a highly secretive national security complex in the traditional bastion of transparency, the United States.

Counter-pressures to such secrecy were limited, although there were some. One notable victory for transparency came in the form of the US Freedom of Information Act, first passed in 1966 and strengthened in the post-Watergate reforms of 1974. In the 1980s, transnational networks of civil society activities launched campaigns demanding information from inter-governmental organizations, particularly the World Bank. East and West negotiated some arms control agreements that included verification provisions that made the security establishments of the two sides increasingly transparent to each other.