Describes how developing nation governments are leapfrogging developed nation governments in transparency. Example of budget transparency is given with screenshots from the beta Timor-Leste transparency portal. Argument made for transparency to increase citizen and business confidence and kickstarting economic growth.
The digital world eliminates physical barriers and enables more efficient movement of goods. Globalization favours this efficient movement creating local and global competition. It also increases the information available to businesses, citizens and civil society. The hyper-competition thanks to globalization and digital technology means that businesses have choices. They seek out high growth but stable markets. This reality is driving government reform.
It doesn’t matter how well governments control the press or control the message. Technology enables citizen surveillance of government. These means millions of eyes trained on governments where mobile technology has become the game-changer. For example, texting was used in Sudan to reduce election fraud
The recent financial crisis has developed in what Mohamed El-Erian of PIMCO calls the “new normal”. One way that we know that the world is no longer developed country centric comes from the automobile industry – many established brands were acquired by (or had offers from) companies in BRIC countries.
The theory of technology leapfrog has been applied to Internet, mobile, e-business and e-government. The notion is that less developed countries often have less entrenched technology vendors and that some stages can be skipped – for example skipping wired Internet and moving rapidly to wireless. It enables countries to focus on what is important and learn from what works in other countries.
The Government of Thailand is attempting e-government technology leapfrog. Why would countries want to improve transparency?
Tim O’Reilly, who created the “Web 2.0” term, promotes the notion of “government as platform”. In addition to the benefit of transparency to improve governance, government data can lead to economic development. Governments around the world invest in infrastructure such as roads and airports as a foundation for business. This can be extended in the virtual world. Mr. O’Reilly makes a compelling argument of how technology brought into the public domain has created economic growth and innovation: global positioning and the Internet. There can be many ways in which data can generate economic growth. Resource companies can use the data to uncover opportunities. Demographic data can help companies plan stores or factories.
This begs an interesting question. Why would developed countries – with head starts – be ripe for leapfrogging?Monopolies and large telecommunications companies place pressure on governments to slow down the pace of change.Many government organizations receive revenue by selling data. Providing this data free reduces this revenue and there is no real connection with the downstream benefits of more tax revenue.Many countries are reluctant to use international standards.Developed country governments tend to focus on complexity – they seek best practices and rethink initiatives rather than publish data and learn.Of course, market integration in developed countries means that they are often under less perceived pressure from globalization, and are more focused on regional issues like the Euro crisis.
Our recent FreeBalance International Steering Committee survey demonstrated some leapfrog opportunities.
An example is budget transparency. Governments in developed countries have improved budget transparency,
With many producing reports in PDF format and a few providing interactive data. Developing country governments can leapfrog,
with interactive drill down into government data
with 10 years of budget execution data with drill down through the government chart of accounts
export to numerous machine readable formats, plus tracking the entire budget cycle: original budget, budget transfers, commitments, obligations and actuals
It’s no wonder that all FreeBalance international customers surveyed claim to be committed to public financial management and transparency and most are adopting international standards.
Standards enable more effective comparisons and generate confidence. There are additional opportunities for developing nation governments.
Developing nation governments can leapfrog by recognizing the power of social media rather than the traditional publish model – more current information, vetted by the community and enabling unexpected economic usages.
Which brings government from being out of network – or broadcasting
To in-network, or participating with citizens, civil society and businesses. This creates a network effect.
There are challenges. Developing nation governments need to build infrastructure. They often have to coordinate donors who require different methods of reporting, adding to “transaction costs”. Many governments are still concerned about hard ROI justifications. This is often impossible given the network effect where data from multiple sources are used to generate economic growth. And, governments need to be more collaborative in releasing data and getting feedback for improving data accessibility.