Transparency is Good for the Economy

Open Government Generates Growth in the Private Sector:

Day in and day out, the New Mexico Foundation for Open Government (FOG) is on the front lines, supporting the public’s right to know.  FOG has been educating, advocating and litigating for transparency and accountability in our government for almost 25 years.

So what?  Why should you care?  Isn’t access to public records a game of inside baseball that only political wonks and the press play?  If you care about the state of the economy, you should care about open government.  It’s not just about transparency and good government.  It’s also about jobs and economic development, say a growing number of experts and policymakers.

Journalists were the first to push for access to public records in the ’60s and ’70s to find out what government was doing and to hold public officials accountable.  However, today requests for public records are predominantly filed by businesses, outnumbering requests from the press by three or four to one, according to one nationwide survey.

Although we don’t have hard statistics in New Mexico, records custodians report the majority of requestors represent commercial interests-from landsmen in the Permian Basin to realtors in Santa Fe, from lawyers in Las Cruces to technology entrepreneurs in Albuquerque.  One state agency that has been tracking Inspection of Public Records Act (IPRA) requests in 2014 found that commercial IPRA requests were four times greater than IPRAs filed by journalists.

Open data in particular is changing the landscape of government transparency.  According to a benchmark study released last month by Socrata, a privately held cloud software company, a vast majority of respondents said reliance on government open data by private sector organizations is now established and can spark economic development.  A significant proportion of public officials responding to the survey said open data has led directly to economic development in their community with a large majority (75%) saying they have seen direct benefits in new businesses forming and 73% reporting an increase in jobs.  A smaller but still large majority (59%) also has seen increased tax revenues.

Another recent report by the consulting firm McKinsey & Co., said that open data’s economic potential is estimated at more than $3 trillion in the global economy.  According to the McKinsey report, government will play a key role in generating that economic activity and stands to gain significantly from it through increases in tax revenue, reductions in the cost of government transactions, increases in service efficiency and in the creation of jobs.

The late Peter Weiss of the U.S. National Weather Service observed that the largest information generator-the government-is an important input, like gas, coal or water to the economic process.  “The database and information retrieval industries in the United States are large and have grown exponentially since the beginning of the Internet revolution.  They are dependent to a great extent on free, unrestricted, taxpayer-funded government information, which covers everything from economics to statistics to agriculture to the weather,” Weiss noted in a research paper.

The case for engaging the private sector in open governance goes beyond performance and technical considerations.  Introducing transparency, accountability and trust into government-business relations will transform the business environment and the investment climate.  It can promote open public budgeting, clean up procurement and level the playing field for small businesses.

Thomas Jefferson once said that information is the currency of a democracy.  Today that is especially true, where government information can pay big dividends for the economy.  That’s why many in the business community join FOG in demanding transparency and openness in government.  We welcome all businesses and citizens in New Mexico to join us on this open-data frontier.

Susan Boe is executive director of the New Mexico Foundation for Open Government.  FOG is a member-supported, nonprofit, nonpartisan organization that is the state’s leading advocate for transparency.