I was recently asked if I thought increased transparency leads to better budget decisions. This question gave me the opportunity to pause and be thoughtful about the budget process in the public sector.
Speaking from a purely academic standpoint I would say that more transparency is always better than less as it regards to public budgeting. However, from a practical standpoint I think we need to look at quality over quantity to determine if increased transparency truly leads to improved decision making.
Chapter 16 of The Years of Lyndon Johnson: Master of the Senate by Robert A. Caro outlines the 1951 Senate Armed Services and Foreign Relations Committee meeting in a closed session to discuss President Truman’s dismissal of General Douglas MacArthur. These Senate hearings were particularly challenging because public opinion was very pro-MacArthur and anti-Johnson. The hearings needed to be handled with care because the public was likely to disagree with the decision of the committee if it was not in MacArthur’s favor. Senator Russell, chairman of the committee, instituted a new system for releasing information to the public. At the end of each day of testimony the committee released edited transcripts to the public. Transcripts were edited to exclude any information that would endanger American soldiers. The result of this system was that when the committee completed its’ investigation public opinion was on the side of President Johnson.
As in 1951, there is a significant amount of transparency today. However, I would assert that the information available to the average citizen is too great for the average citizen to make an informed opinion regarding the state of public finance. Indeed, to preserve our sanity there are many citizens who simply “check out” of the legislative process saying things like “I just don’t have the head for this politics stuff.” Because of this, I think it’s easier than ever for governing bodies to operate “in the shadows.” Ultimately, there is such a thing as too much transparency.