Transparency

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= considered as form of Openness and Publicness

Description

West and O’Mahony:

“Transparency meant that the code was publicly available, that most of the software production process was discussed on public mailing lists or discussion boards, and that the software release cycle and goals were also provided on the community website.”


“The second type of openness sponsors considered when designing a sponsored community was the degree of accessibility — the amount of control sponsors would relinquish to the community. An accessible community not only provides visibility, but allows some outsiders to gain access to either the project’s code repository, community planning processes, or strategic decision-making.” (http://www.joelwest.org/Papers/WestOMahony2008-WP.pdf)


Discussion

Transparency in a P2P Politics

Alex Rollin:

Transparency as a concept covers a broad range of disclosure. When applied to a P2P Politics concept there are a number of immediately relevant implications. Because most P2P networks rely on disclosure of personal efforts within a network, we already have a form of transparency of interest. This means that we are working with an assumption of transparency that is potentially non-obvious to participants as a peer network becomes political.


Jason Lakin:

"A new article in the International Political Science Review, entitled “Transparency is not enough,” argues that to get from increased transparency to reduced corruption, societies must meet two additional conditions. First, transparent information must be publicized in a way that makes it accessible at low mental and economic cost to citizens (the publicity condition). Second, citizens must actually have some way to hold officials accountable for any misdeeds revealed by transparency (the accountability condition)." (http://internationalbudget.wordpress.com/2010/08/09/transparency-is-not-enough/)

More via http://ips.sagepub.com/content/31/3/301.short


Transparency in Business

Scott Reynolds Nelson, author of a book about the 2008 meltdown, interviewed at Thrivable.net by Todd Hoskins, about the relationship between transparency and economic crisis:


"Todd: You have recently completed a book called Crash, looking through history at economic crises. What can we learn from the past?

Scott: Well, crashes are more than financial downturns. They demonstrate a general sense of uncertainty about institutions, what I call semiotic doubt. Is this dollar worth what I think it is? Is this debt going to be paid? It’s a deep problem with objects that represent wealth as well as fears or concerns about the institutions that create them: banks, mutual funds, or states.


Todd: In what way is the current crisis different than the rest?

Scott: Well, it’s very different from 1929 but more like 1837 or 1819. In those crises banks were at the center of the controversy – there was a general sense that banks were not pillars of the nation but (in the words of one Senator from 1819) caterpillars. That is, institutions that ate up everything in front of them. Bank-centered panics tend to be much more about liquidity, and tend to draw much more concern about the future of banking as an institution. Now there is lots more rage at banks, too. There was a little of that in 1929, but not as severe as in this crisis.


Todd: You have written that transparency is often an outgrowth of a crisis. How has this happened in the past?

Scott: In the 1857 panic, Elizur Wright pushed most for transparency, and he’s really responsible for much of the transparency we see in business now. He was a socialist, abolitionist and an actuary (no lie) and he was one of the first to apply mathematical analysis to business firms. He coined the term “return on investment” in the US. He was angry about how opaque big insurance companies were and pushed Massachusetts to regulate them – effectively to list all their investments and make their books public. The companies resisted it, but he won his battle in the depths of the 1857 panic. In later panics his accounting requirements became generally demanded of all publicly-traded firms.


Todd: Transparency seems to be a buzzword, but it is often not clarified, “What are we being transparent about? And to whom?” What is called for now?

Scott: Openness of books, transparency, clarity aren’t just things that are nice to have – they can make or break any institution that relies on trust to function. That includes banks but also NGO’s, funds, etc. Much of the internal workings of banks for example had been invisible to most folks. The so-called “stress test” that the federal government used on the banks in 2009 exposed some of the problems with bank operations. It turned out that many banks had much higher reserve ratios than they claimed. Likewise many of the big banks were forced to take off-the-books vehicles back into their firms for accounting purposes. In banks, anyways, that transparency can remove that semiotic doubt.


Todd: Are oversight and legislation sufficient to address the system’s failures?

Scott: No, the institutions really have to change from within. Legislation can push an institution to make certain numbers visible, but we all know that books can be cooked. In Countrywide, for example, there were regulators, risk managers, and accountants who were supposed to prevent the firm from taking and reselling the “liar loans”. But the structure of that firm was such that the folks who were supposed to regulate were the last to find out about an operation. They had to sign off or be sidelined. Likewise the biggest banks like Bear Stearns and others found ways to pressure the “regulators” like the bond-rating agencies. That’s generally why open books are better than what firms call transparency and transparency is better than legislation-mandated rating organizations." (http://thrivable.net/2010/11/economic-crisis-transparency-interview-with-scott-reynolds-nelson/)

More Information

  1. Openness in Open Source Software Development‎
  2. Transparency Is Not Enough [1]