Economic benefits of open data

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This wiki pulls together resources that attempt to define why transparency is worth the investment. While it may be too soon to tell what all the effects of transparency and open government initiatives are, there are a number of questions that are important to framing the discussion of these movements. Some questions include:

  • How does increased availability of government data change behavior, make government more efficient, save money, or create accountability?
  • Does oversight, which is enabled by transparency, really reduce fraud, waste, and abuse? 
  • When transparency initiatives are implemented, how much do they cost the government compared to how much they save?
  • Which transparency initiatives provide the most value for the input required?
  • Which transparency initiatives increase citizen engagement with government the most, and do badly implemented initiatives deter engagement?

While it is relatively impossible to quantify the value of 'better policy,' the following resources help provide answers to some of these questions, and can inform how we measure the value and impact of transparency and open government efforts.

This article looks at public sector information (PSI) use in the EU. It builds on a 2006 study (MEPSIR) that estimated the PSI market in the EU25 + Norway at EUR 27 billion and concludes that was a low estimate. It estimates gains from opening PSI at EUR 40 billion: "aggregate direct and indirect economic impacts from PSI applications and use across the whole EU27 economy are on the order EUR 140b."
This paper investigates the effect of open government provisions on public corruption in the United States. Using a simple reduced-form model, we show that strengthening FOIA laws has two possible effects: reducing corruption levels and increasing the probability that corrupt acts are detected. Guided by the model, we conduct an empirical investigation of the impact of switching from a weak to a strong state-level FOIA law on corruption convictions for state and local government officials. We find that corruption conviction rates approximately double after the switch, which suggests an increase in detection probabilities. However, corruption conviction rates gradually decline from this new elevated level as the time since the switch from weak to strong FOIA increases. This decline is consistent with offcials reducing the rate at which they commit corrupt acts by over fifty percent, and it is still apparent as long as 10 to 15 years after the change in FOIA laws. There is no concomitant change in the corruption convictions of federal officials in these same states.
The relation between transparency and trust is a heavily debated topic: proponents argue that transparency will lead to more trust whereas opponents argue the opposite. This normative debate is not substantiated by a thorough empirical understanding of this relation. Relatively few studies have investigated the relation between transparency and trust and a general shortcoming of these studies is that they investigate population-wide effects. This study extends our understanding of the relation between transparency and trust by investigating certain citizens‟ characteristics as moderating factors. On the basis of theories from social psychology we propose that (1) the general predisposition to trust government and (2) prior knowledge about the specific issue mediate the relation between transparency and trust. Our experimental research demonstrates that prior knowledge indeed affects the relation between transparency and trust: no effects were found for knowledgeable citizens whereas citizens with little prior knowledge develop less trust in the competence of government but more trust in its benevolence. The predisposition to trust government does not alter the relation between transparency and trust in a government organization: the effect of transparency is the same for high and low trusting citizens. An analysis of the interaction effects of prior knowledge*disposition to trust shows that the changes in perceived competence occur mainly in the group of citizens with high trust and little knowledge whereas the changes in perceived benevolence occur predominantly in the group of citizens with low knowledge and low trust. These findings highlight that transparency can enhance trust when citizens have little knowledge and low trust but it can undermine trust when citizens have little knowledge and high trust.

Plus Sunlight's coverage of the report.

Surveys in Philadelphia, San Jose, and Macon show that those who believe city hall is forthcoming are more likely than others to feel good about: the overall quality of their community; the ability of the entire information environment of their community to give them the information that matters; the overall performance of their local government; and the performance of all manner of civic and journalistic institutions ranging from the fire department to the libraries to the local newspaper and TV stations. 
In addition, government transparency is associated with residents’ personal feelings of empowerment: Those who think their government shares information well are more likely to say that average citizens can have an impact on government.

Plus Sunlight's reaction to the report.

The ability to see how government uses the public purse is fundamental to democracy. Transparency in government spending checks corruption, bolsters public confidence, and promotes fiscal responsibility. 
State governments across the country have been moving toward making their checkbooks transparent by creating online transparency portals – government-operated websites that allow visitors to see who receives state money and for what purposes. Forty states provide transparency websites that allow residents to access databases of government expenditures with “checkbook-level” detail. Most of these websites are also searchable, making it easier for residents to follow the money and monitor government spending.
The Open Knowledge Index has been designed to measure and track progress in opening up information, data and knowledge in a broader sense to the public. The Open Knowledge Index captures three dimensions of knowledge – the ability to access knowledge (capability), the availability of knowledge and data provision (legislation) and the capacity to use the data and feed it back into the open data eco-system (open society).
There is a range of arguments for increasing public access to official information, including the argument that it is a basic democratic entitlement and the argument that access to information will promote better quality public administration. However, this paper specifically develops the economic rationale for expanding and strengthening Ireland's freedom of information (FOI) law. The first aim of the paper is to demonstrate that the fees regime does not lead to any cost recovery and is in fact likely to add to total administrative costs. The second aim of this paper is to comprehensively defeat the argument - which is aired from time to time - that Ireland's freedom of information law is 'expensive' or a luxury than could be dispensed with. This paper will illustrate how FOI has in all probability saved significant sums of money for the public. The third aim of the paper is to show that FOI is essential if Irish enterprises are to exploit the business potential of reusing public data, a market which has an estimated value of 83-399 million pounds per annum.
We investigate the effects of fiscal transparency and political polarization on the prevalence of electoral cycles in fiscal balance. While some recent political economy literature on electoral cycles identifies such cycles mainly in weak and recent democracies, in contrast we show, conditioning on a new index of institutional fiscal transparency, that electoral cycles in fiscal balance are a feature of many advanced industrialized economies. Using a sample of 19 OECD countries in the 1990s, we identify a persistent pattern of electoral cycles in low(er) transparency countries, while no such cycles can be observed in high(er) transparency countries. Furthermore, we find, in accordance with recent theory, that electoral cycles are larger in politically more polarized countries.
Book
There is a growing consesus in development literature and practice, worldwide, that transparency is a necessary condition for enhancing public accountability as well as improving service delivery outcomes. In India, the transparency discourse has largely been framed in the context of the demand for and subsequent enactment of the Right To Information (RTI) legislation. The RTI Act, passed in 2005, was driven by civil society activists who radicalized the notion of transparency as the key to realizing rights and entitlements as well as holding government to account. The right to information movement, through its activism, developed a transparency and accountability mechanism known as social audits to mobilize citizens and create a public platform through which citizens could demand accountability. Alongside, many NonGovernment Organizations (NGOs) in India began to experiment with innovative ways of using government information for accountability. This included efforts to develop citizen report cards and undertake budget analysis. The underlying assumption behind these efforts was that transparency can catalyze citizens to mobilize and demand accountability from the state. This in turn can create requisite pressures to ensure government accountability.
Despite the broad consensus and proliferation of transparency initiatives,the specific links between transparency, citizen action, and accountability and how they lead to change remain a largely open empirical question. In both literature and practice, transparency is often conflated with accountability and the black box of how information is used and what effects it could have on accountability remains to be unpacked. This paper is an effort to address this empirical gap by studying the effects of an experiment with social audits, under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in the southern Indian state of Andhra Pradesh (A.P.).
Within a society based on democratic self-governance, the press serves an important role in holding government accountable, requesting public records, and enforcing freedom of information laws. As traditional news media in the United States struggle with declining revenues and reduced staffing, some access scholars and industry experts are concerned that journalists might be failing to exercise their right to request government records. Applying gatekeeping theory, the study examines individual and institutional predictors of public records use by journalists. A survey of 442 U.S. journalists indicated that individual factors, such as age, gender, and region, have little to do with one‟s use of records, but institutional factors, such as work experience and beat coverage area, do predict access. Also, half the journalists had never requested a record under the federal Freedom of Information Act, a quarter indicated that they don‟t request records because of lack of time, a third because they don‟t know how, and 17 percent because “nobody really cares.” The feeling among some journalists were that agencies have been increasingly denying requests and that media companies are less likely to litigate access denials than they were two years ago. Implications for journalism, public affairs reporting, and democracy are discussed.
This paper follows the debate over accountability and the place that it occupies on the quality of democracy indexes. Here, I will argue that access and disclosure of public information is an important dimension of all various accountabilities (vertical, horizontal, social and transversal). Therefore, I identify the different stages within these various accountabilities where access and disclosure of information play a pivotal role. Afterwards, I compare these findings to the quality of democracy indexes to verify how thoroughly they include information and transparency indicators when evaluating accountability in democratic regimes.
Recent scholarship on transparency has been voluminous. In the absence of clearly defined parameters for what constitutes ‘transparency’ and what does not, however, misuse of the term is diminishing its analytical utility. What, exactly, is “transparency”? This paper addresses this question and a fundamental gap in the literature. The first part sets out parameters for identifying transparency, drawing on the word’s original literal and figurative meanings to outline two necessary conditions: 1) Visibility, the degree to which information is complete and can be easily located, and, 2) Inferability, the degree to which information can be used to draw verifiable inferences. The second part of the paper lays out a supply-and-demand framework for explaining the quality of transparency. The demand for informationoften tends to drive the quality of transparency’s first dimension, visibility, while inferability chiefly depends on the supply of transparency: the incentives of the supplier and how information is mediated. Optimally, transparency is visible and inferable in the sense that it includes raw, verified and simplified information. Using examples from a prominent work on the effectiveness of transparency systems, FullDislosure: The Perils and Promise of Transparency, and highlighting the increasing importance of the open-data movement, the paper offers a vocabulary and a framework for evaluating the quality of transparency.
This study explores the importance of government information usability in promoting citizen participation in public administration. Rather than an emphasis on the volume of information released by government, the notion of information usability calls for greater emphasis on information quality. To begin, we examine the definitions of transparency and government information usability. A set of criteria on useable government information are identified: accurate, accessible, complete, understandable, timely, and free or low cost. These criteria are applied to two cases: USAspending.gov and the 1-800-MEDICARE helpline. We develop a typology illustrating the relationshipbetween government openness and information usability. The typology is a combination of the range of information usability and the distinction between openness and secrecy. Finally, how information usability links transparency and citizen participation is discussed. This study bolsters the argument that the ultimate purpose of releasing government information is to enable the public to hold government accountable.
This cross-national study used a vertical accountabilty model to examine the extent to which eight information-communication indicators would influence perception of corruption in 150 countries. The model appeared strong, given that all of the indicators were negatively and significantly correlated with perception of corruption and were individually supported in the literature for their inverse relationships with corruption. That is to say that corruption perception was strong in the absence of an access to information law and low media rights, electoral pluralism, political participation, political culture, length of time of the political regime and low cellular phone and internet subscriptions. The study found that low news media rights, short duration of the polity, weak political culture and low internet and cellular phone use were significant explanatory indicators for corruption. However, the presence of access-to-information legislation did not impact corruption.
This article examines the impact of Freedom of Information on English local government compared against the impact on central government. Based on findings 2 years into a 28 month ESRC funded study, it examines to what extent FOI has achieved its objectives at local government level. FOI seeks to increase transparency and accountability and improve decision-making, public understanding of decisionmaking, public participation and public trust. It also examines whether FOI has impacted upon how authorities work in terms of leadership, service delivery and partnership work. FOI at local level in England is shaped by rising numbers of requests, the diversity of local authorities and the fact that FOI was preceded by other access legislation.
It concludes that FOI has made local authorities slightly more transparent, having been given an extra push by recent innovations in online disclosure of data. It has also created greater accountability and had some impact on public understanding, particularly over small issues. It has had no effect on decision-making except occasionally in particularly sensitive issues. It has not increased participation and has had no impact upon trust. In terms of how authorities work, sources of tension concern requests for information held by businesses working on behalf of authorities and requests from the media. The study highlights the importance of context in determining impact and the role of political leadership in promoting openness.
We test the commonly stated but rarely investigated assertion that making political institutions more transparent may be an effective method for combating corruption. This assertion is confirmed with cross-national data, but also specified and qualified in several respects. Most importantly we find that looking only at average effects as earlier studies have done gives a misleading picture of the significance of transparency for corruption. Just making information available will not prevent corruption if such conditions for publicity and accountability as education, newspaper circulation and free and fair elections are weak. Furthermore, we find that transparency requirements which are implemented by the agent itself are less effective compared to non-agent controlled transparency institutions such as a free press. We also argue that the interaction between transparency and free and fair elections may provide an explanation to some ambiguous results found in previous research on democracy and corruption.
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In the panoply of European institutions that have been criticized for their secrecy and lack of accountability, the European Council of Ministers certainly ranks near the top of the list. The Council and its subordinate institutions debate largely in private, and they often arrive at decisions without taking a formal vote. Critics of Europe’s democratic deficit have called for reforms to make the Council more transparent in order to promote the development of democratic politics at the EU level (Follesdal and Hix, 2005). Other scholars suggest that the secrecy of the policy process within the EU is exaggerated, and that the public already has access to plentiful information about decision-making (Moravcsik, 2002). In this paper I consider empirical evidence that may help us identify to what extent secrecy of the EU Council of Ministers is costly, and to what extent secrecy might actually be beneficial. I also examine the effect of efforts made by the Council since 1993 to become more open in its proceedings. My task is inevitably complicated by the fact that because it is a secretive institution, there are limits to the information available about behaviour within the Council of Ministers. As I show, there are nonetheless several recent empirical studies which can be used to draw inferences about the effects of Council secrecy, in addition to a number of enlightening examples.
Reporters at U.S. daily newspapers routinely turn to local, state and federal government websites to hunt for data that they can use in their stories, a recent survey by the Reynolds Journalism Institute found.
Overall, the reporters contacted said that they looked for data on the government sites three to four days a week and were generally successful in finding what they needed. However, many of the 600 reporters surveyed by the Center for Advanced Social Research (CASR) at the Missouri School of Journalism said they found information that was outdated, poorly documented or incomplete.
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