Can Transparency Be Legislated?

by Dr. Paul Eder

January 5, 2015

In May 2014, President Obama signed the DATA Act into law. The crux of the law is simple: Make financial data across government available in a standardized format. As a result, stakeholders will speak a common financial data language.

This is an important step toward government consistency, but not necessarily a culturally transformative event. Let's step back for a second and think about what "transparency" truly means. Imagine a clear plastic screen replaces the wall between your office and your co-worker's office. Day in and day out, you are able to see the interactions of your nearest work neighbor. In some ways, your neighbor's actions are transparent - you can see her every move. However, you are still missing a key component - context. Why is she talking to those people? Why is she visiting that website? You can certainly use contextual cues to make an educated guess, but your guess and others' guesses would probably not mesh completely.

In a similar vein, data availability in government answers one key question: What? What are the data? The "whys" and the "what ifs" are still missing.

Many possible conclusions can be drawn and decisions can be made based solely on knowing the "what" of data, especially if you can see trends about how that "what" has evolved over time. Think about a corporation with a beautiful spike in profit compared with prior quarters. It's great to know that this quarter was better than others. However, the data may fail to fully explain any potentially transient nature of the numbers. Some individuals looking at the data may possess the needed contextual knowledge and be able to interpret the data accordingly - but truth should not be an idiosyncratic phenomenon.

Similarly, data in government is also a slave to its context and its interpretation. One can draw any potential number of conclusions from data in its raw form. In government, many of these conclusions will be tinged by political orientation or other less transparent motivations. Therein lies the rub. The data may be transparent but the correct context and interpretation remain unclear.

Transparency of motivations and interpretations is a cultural phenomenon over and above availability. Data is objective: It is what it is. But interpretations are less clean. Sometimes, people do not reveal their understanding of data, either because they don't fully form their opinions, or they are actively hiding their thoughts. Either way, with every additional person who hides their interpretation, the truth becomes a little less trustworthy.

So, logically, we must ask whether transparency of motivations and interpretations can be achieved. The answer is a hazy "yes." A culture is communicated and reinforced by strong leaders and consistent application of organizational values. In this sense, cultural transparency is a leadership issue, rather than a legislative issue.

Laws like the DATA Act are important, but they are only a start. Transparency, as a cultural issue, extends beyond data availability and standardization. Making standardized data available is step one. Developing leaders who drive a culture of motivational and interpretational transparency around the data is step two - and this is a much bigger hill to climb.

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