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On low hanging fruits and revolutions: transparency at the G8

Written by Marta Foresti

The debate about what the G8 can deliver on transparency is heating up, with the UK coalition government under increasing pressure to provide leadership. But what are the issues at stake? And what, if anything, will summit talks between a group of political leaders from the world’s richest nations mean for the world’s poorest people?

There are some issues on which G8 action can make a real difference. For example, the G8 could play a major role in advancing the transparency agenda, including ensuring concrete delivery on the key issues at stake at the summit: for example, regarding tax, there is a need to increase transparency in beneficial ownership of companies and trust. As Kevin Watkins pointed out in his recent ODI blog, G8 countries could also clamp down on profit shifting and trade mispricing through improved information flows. On extractives, the G8 members could propose ambitious global standards modeled on the Dodd-Frank legislation in the US or on the recently approved EU regulations.

Viewed from a different perspective, there are limits to what the G8 can do – and there are problems with the current summit mindset. As Larry Elliot pointed out in Monday’s Guardian, the G8 represents the major donors providing the bulk of aid to developing countries and so the summits have become the ‘moment when the west "does its bit" for the poor’. This is where the troubles with transparency begin.

When it comes to aid, much of the debate around the relationship between transparency, accountability and governance still revolves around ‘old’ development narratives. Scratch the surface and there is a sub-text about what ‘rich countries can do to help the poor’, while studiously avoiding the power relationships and institutional complexities that have to be addressed to make transparency a force for development. I have been following the summit dialogue with a sense of uneasiness for some time, for three related reasons.

Firstly, there is a distinct apolitical flavour to the campaigns and debates about transparency and development, often assuming an unlikely benign relationship between information, power and incentives to take action. The implicit assumption appears to be that more information means that poor people will be better equipped to transform their lives. Advocates for greater transparency appear seldom to stop and ask themselves why some of the world’s most transparent governance systems operate amidst high levels of poverty and inequality – think of the United States.

Secondly much of the discourse around transparency is based on the fundamental assumption that availability of information to citizens leads to improvements in government accountability and, in turn, to development results. We seem to forget that in most cases, including in Europe, changes in accountability and power relations have not come about because of availability of information, but through political competition.

Thirdly, there is the idea that lack of transparency in itself can explain a number of structural/systemic development problems, such as inequality or corruption. My view is that a lack of transparency is more often a symptom rather than a cause of these obstacles.

Recent research has highlighted the complex interaction between transparency and wider governance issues. One study by IBP found that, while we have pretty robust evidence of what drives fiscal transparency in different countries – including some key political factors, such as democratic transitions and corruption scandals – we know very little about whether and how increased budget transparency leads to improved citizen participation. We know even less about the links to government accountability. These findings resonate with ODI’s own research on voice and accountability, and land acquisition as well as with recent World Bank research on community development and participation.

So where does this leave us on the G8 commitment, led by the UK, to greater transparency and new openness on land, open data and extractives? Recognising the complexity is not a reason to throw the baby out with the bathwater, by disregarding the potential of what the summit could achieve. The G8 is a real opportunity – but seizing the opportunity requires focusing on the right things, including:

  • Concrete commitments: the G8 governments need to deliver specific commitments to use transparency regulations to achieve changes in key areas where they have an influence:  illicit financial flows, tax dodging, regulation on extractive industries, avoiding land grabs. Generic calls for greater ‘transparency and accountability’ to ensure citizens’ participation in poor countries risk detracting the attention from the core agenda.

  • Realism and political feasibility: although international agreements and commitments ought to be ambitious, I think some caution is also in order. Overpromising is an old vice of the aid business. At times it can go unnoticed, but it can also do harm. Calling for a ‘transparency revolution’ in the fight against poverty, disease, malnutrition and hunger may not be the best course of action here.

  • Enabling environment: transparency can be an important element of a broader enabling environment for development, especially if meaningfully enshrined in national constitutions and norms. Where these conditions exist, the international community has a role to play in supporting implementation and capacity to deliver.

  • Data as a means: increased public access to data is vital. But if access is to be translated into informed action, careful consideration needs to be given to what information is made available when, to whom, and in what form. Indigenous people in highly marginalised areas seeking to protect their lands from encroachment may be unable to access or act upon information provided on the web in a language they don’t understand. And tax authorities in poor countries may not be equipped to decipher voluminous company accounts provided by multinational companies receiving state-of-the-art advice on tax evasion.

Finally, a call for greater transparency is worth pursuing by the G8 because, unlike commitments on, say, trade and climate change, it is a realistic and doable agenda – a low-hanging fruit, some might say. Surely a modest, realistic and politically viable international commitment is worth fighting for, provided the commitment offers practical solutions to real problems.