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Beyond transparency: What’s next?

Michael Jarvis's picture

Does transparency lead to development? Not necessarily. At least not when it comes to the oil, gas, and mining sectors. Transparency is important but far from sufficient to improve livelihoods. An ongoing discussion among practitioners on the Governance of Extractive Industries (GOXI) platform reveals a lack of clear answers to this question.

For example, Eva T. Thorne argues,

“Revenue transparency is a necessary yet insufficient part of the drive to attain sustainable development outcomes from extractive industries. Transparency must go hand-in-hand with competent public institutions and good public spending in the context of government leadership and commitment to using the revenue to promote sustainable development outcomes.”

While increased transparency is a reality in many countries, and globally, the challenge is whether citizens can and will use the information that is disclosed.

In many cases, those disclosures are made directly by producer country governments or to comply with international requirements, such as the Dodd-Frank Act. Yet, while it is relatively easy to put data in the public domain, it is far harder to build understanding, informed debate and action based upon disclosures. Without that, the value of transparency gets lost.

As Jed Miller of the Revenue Watch Institute fears, disclosure then becomes the end point, not the turning point.

We still lack clear evidence of development impact, even where there is a history of disclosure, such as through the Extractive Industries Transparency Initiative. This topic demands a strong empirical study. The Transparency and Accountability Initiative is looking at the impacts of transparency and accountability interventions. While its request for proposals is a good template, unfortunately, it does not cover extractive industries.

The question still remains: Can you reasonably link contract or revenue disclosure to sustainable development outcomes? Judging by the ongoing GOXI discussion, many have their doubts even though believing transparency is an important first step. The challenge is posed. All proposals welcomed.

Share your thoughts by joining this discussion, or by posting on GOXI.

 

Comments

Submitted by Heba Shams on
The question of how transparency contributes to sustainable development could very well be the wrong question to begin with. We at the Bank are often driven to try to establish this direct connection between all sorts of intervention and development or sustainable development. This is typically a mandate driven issue. A step perceived as necessary to justify Bank involvement. This approach is however dangerous. Because establishing the causal link between such primary interventions and the ultimate long term objective of sustainable development is not a realistic effort. Obviously development is not achieved by any single intervention. It is achieved through the interaction of many interventions and circumstances in many ways over a long period of time. A better approach is to identify a chain of causation and establish the link between this primary intervention and an intermediate outcome within the chain. Say for example, is it possible to establish a connection between Transparency and good governance in the sector. Good governance is the direct objective pursued through the introduction of transparency.At the same time, good governance is well accepted as a necessary condition for development. So why leap to establish connection between sectoral transparency and sustainable devlopment. Why not just explore the connection between transparency and good governance in the sector. Even the connection between between lack of transparency and bad governance can be good enough for discussion of impact.

Many thanks for your comment and I agree with you that part of the answer here is to refocus on intermediate outcomes for the reason you mention. The challenge is having those intermediate outcomes be acceptable to donors and investing in the infrastructure of tracking those intermediate outcomes.

Lack of transparency affects development When we observe a number of recent examples around the world, it seems that the lack of transparency is dangerous. Because the responsible people are not accountable they are able to take any decision having adverse effects on longer term, which will severely affect the sector itself and development in general. Lack of transparency in the use of public revenues from the mining industry is also dangerous as the revenues remain in the hands of a limited number of people and may not be redistributed to contribute to the development of the country. This is also against social equality, social cohesion and may generate conflicts which will greatly affect development. This explains the Kimberley process in particular

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