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p. 8 of 34 BACK | NEXT Executive Summary Introduction Good governance defined The elements of good governance Accountability Participation Predictability Transparency Interlinkages among the elements of governance The Bank’s concern with governance quality The Bank’s approach to governance issues Promoting the elements of good governance in Bank operations The Bank’s modalities for enhancing governance in DMCs Resource implications Reporting arrangements

Governance: Sound Development Management : The elements of good governance

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Transparency

Transparency refers to the availability of information to the general public and clarity about government rules, regulations, and decisions. Thus, it both complements and reinforces predictability. The difficulty with ensuring transparency is that only the generator of information may know about it, and may limit access to it. Hence, it may be useful to strengthen the citizens’ right to information with a degree of legal enforceability. For similar reasons, broadly restrictive laws that permit public officials to deny information to citizens (e.g., an Official Secrets Act) need to provide for independent review of claims that such denial is justified in the greater public interest.

Access to accurate and timely information about the economy and government policies can be vital for economic decision making by the private sector. On grounds of efficiency alone, such data should be freely and readily available to economic agents. While this is true across all areas of the economy, it is especially relevant in the case of those sectors that are intrinsically information intensive, such as the financial sector in general and capital markets in particular.

Transparency in government decision making and public policy implementation reduces uncertainty and can help inhibit corruption among public officials. To this end, rules and procedures that are simple, straightforward, and easy to apply are preferable to those that provide discretionary powers to government officials or that are susceptible to different interpretations. However well-intentioned the latter type of rule might be in theory, its purpose can be vitiated in practice through error or otherwise.⁹

In practice, though, it may sometimes be necessary to place limits on the principle of transparency. In doing so, it may be helpful to distinguish information as a commodity from information as a process. For example, intellectual property rights may need to be protected in order to encourage innovation and invention; but decision making on the establishment of intellectual property and rights thereto (i.e., to whom they are granted and why) should be transparent.

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