PRINCETON – Transparency seems to be the word of the day in a wide array of policy domains. But is greater transparency always good?
Ever since the financial crisis erupted in 2008, there has been a call for “greater transparency” in financial services. The financial-reform law passed by the United States Congress last month requires improved transparency from banks and other financial-services firms. Moreover, thanks to the hard work of Oxfam America and the Publish What You Pay coalition, the law also requires oil and mining companies – both US and foreign – that want to raise capital in the US to disclose their payments to the governments of countries in which they operate.
For many poor countries, wealth in natural resources is a curse rather than a benefit. Corrupt rulers can use the billions they receive from oil and mining corporations for personal extravagance, or to buy arms for troops to crush democratic resistance movements.
Of course, transparency alone cannot prevent this, but it will show everyone how much the rulers are getting, and who is funding them. This, one hopes, will change the attitude of corporations that enrich themselves by paying dictators for the right to extract valuable resources that belong to the whole country. Throughout the world, to receive what one knows are stolen goods is a crime – except, it seems, when the goods are stolen by dictators from the people they dominate.