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ABCDE 2012 -- Transparency & Accountability matter

  • Economists strive to measure transparency
  • Political economy issues defy simple theories
  • Testing the honesty of elected officials can pay off

May 9, 2012— Do transparency and information increase accountability among both elected officials and service providers? Can political accountability trigger better institutional quality? What role does better information — including about land tenure and property rights — play in avoiding socioeconomic unrest? How important is the role of the media in ensuring better delivery of publicly provided health, roads, electricity, forest protection and other services?

These and other questions were explored at the 2012 Annual Bank Conference on Development Economics (better known as the ABCDE) from May 7-8 in Washington D.C.

The event kicked off with a keynote by Hernando de Soto, President of the Institute for Liberty and Democracy. He spoke about the power of publicizing knowledge, financial information, and property rights data.

According to de Soto, a lack of transparency and accountability on Wall Street was the match that lit the fire of the 2008 crisis. The lack of information about subprime mortgages and derivatives compounded the meltdown. In addition, the state of the balance sheets of many big investment banks was entirely non-transparent. Thus, policymakers had to react with limited information to avoid a full-scale freezing up of credit.

Hernando de Soto
Using another powerful example, de Soto observed that, if greater clarity and transparency about the rights of informal vendors in Tunisia had existed at the outset of the conflagration that sparked the Arab Spring, fewer lives would have been lost in the upheaval, and the transition to democracy would be less agonizing.

During the second ABCDE keynote, Timothy Besley, Professor of Economics and Political Science at the London School of Economics spoke about the evolving fields of behavioral and political science, welfare economics, as well as macro- and micro- perspectives on understanding state capacity and the cohesiveness of institutions. Besley highlighted the need to understand the frameworks within which government systems and political voice work. He argued that economists should use every tool at their disposal — whether measuring capabilities a la Amartya Sen or using rational choice theory — to explore both policy outcomes as well as quantitative effects of government programs.

Tim Besley
When Professor Besley worked at the Bank of England as an external member of the Monetary Policy Committee, he had to focus on macroeconomic rationality and policy outcomes and be a practitioner and pivot away from a ‘micro’ perspective. Ultimately, Besley said, “The most powerful thing an economist can do is to influence or transform the narrative.”

Other ABCDE sessions featured leading researchers who presented on topics ranging from the impact of introducing political competition and the role that the incentives can have on the management of government land and logging; the role of democracy and community participation on school quality, and; empirical evidence on political accountability, politicians’ rents, and score cards in countries as different as Brazil, India, and Uganda.

The final conference session focused on the role played by technology and media on the provision of public services.

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