TRANSPARENCY IN TRANSNATIONAL GOVERNANCE

Afshin MEHRPOUYA HEC School of Management, Paris, France

Marie-Laure DJELIC Professor, ESSEC Business School, Paris, France

CR 961-2013 ISBN : 2-85418-961-2

© Groupe HEC, 78351 JOUY-EN-JOSAS CEDEX, France, 2013 ISBN : 2-85418-961-2

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TRANSPARENCY IN TRANSNATIONAL GOVERNANCE Exploring the Institutional Construction of a Powerful Norm

Afshin Mehrpouya – Assistant Professor, HEC Paris, France - [email protected] Marie-Laure Djelic – Professor, ESSEC Business School, Paris, France - [email protected] Abstract Transparency has its roots in the Enlightenment, deemed a key precondition for emergence of the self-governing and liberal individual. During the past forty years, simultaneous with the global neoliberal push, transparency has fast emerged as a world society norm of information disclosure for public accountability and for functioning of the markets. In this paper, we show the institutional context under which transparency emerged as a world society norm in the 20th century. This study first provides an overview of the different paths that the democratic and market based information demands have taken from enlightenment to early 20th century. Through a study of the transnational emergence of transparency, it then shows how transnational organizations such as the International Monetary Fund, the World Bank and the OECD, brought together marketization and democratization under their broader neoliberal political agenda. It is in this context that the term transparency started to represent a wide range of information demands based on democratic and market-based arguments for both state and non-state organizations that were formerly referred to as “publicity principle”, “right to information”, openness and disclosure and this resulted in the birth of this dominant and highly performative world society norm.

Keywords:

transparency,

transnational

governance,

world

society,

democratization,

marketization

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Introduction

The European Food Safety Authority (EFSA) affirms that openness and transparency form an essential pillar of its culture and operating principles (EFSA 2005). The Democratic People’s Republic of Korea (DPRK) will strictly abide by relevant international regulations and usage concerning the launch of scientific and technological satellites for peaceful purposes and ensure maximum transparency, thereby contributing to promoting international trust and cooperation in the field of space scientific researches and satellite launches” (Korean Central News Agency, March 16th, 2012).

Those quotes point to two very different and striking examples of a much broader trend – calls for transparency are heard today in all spheres of life and society, in all corners of the world (Garsten & De Montoya, 2008). Transparency, it appears, has become a powerful structuring norm of contemporary world society (Meyer, Boli, Thomas, & Ramirez, 1997; Meyer, Krücken, & Drori, 2009). The demand for transparency crosses multiple boundaries – it invades our organizational and personal lives, it affects local and national politics but it also infuses transnational arenas of regulation and governance. In fact, over the past few decades, transnational organizations and arenas have arguably been the key locus and source of this global push for transparency. Many localized instances of the transparency imperative can be traced back, in one way or another, to transnational actors, standards or pressure. The progressive institutionalization of transparency as a world society norm has run parallel to the neoliberal transformation of our world over the last forty years or so. In fact, the contemporary progress of transparency could be reinterpreted as the institutionalization of a powerful instrument of neoliberal governmentality (Foucault & Sheridan, 1977). Contemporary transnational transparency is an important dimension of a broader drive towards a neoliberal “standards, surveillance, compliance” based mode of control (Garsten and de Montoya 2008; Wade, 2010). Transnational organizations such as the IMF, the World Bank, the United Nations but also many NGOs and transnational private organizations or standard setters contribute in a powerful way to the structuration of a global transparency and “audit society” (Power, 1999) that predominantly reflects and carries Western values.

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Despite the increasingly central role of transparency pressures in transnational arenas, no studies have as yet attempted to systematically explore and expose the genealogy of those pressures in the transnational context. Just like many other world society norms, transparency has had a tendency to become “transparent” to many actors and observers, particularly from the West. In a context where non-Western actors gain political clout and influence, opening the black box of transparency becomes all the more urgent. Those non-Western actors have often not been steeped in a transparency culture to the same extent as Western actors. It is important, therefore, to uncover the normative and value underpinnings associated with the contemporary western-turned-global concept of transparency. This normative “exposition” is an important analytical step if we are to understand the possible paths of conflicts, incoherence, decoupling or translation, on the ground, when global transparency pressures encounter local institutional and cultural conditions. The project in this paper is to work towards the construction of a historical and genealogical account of the emergence and stabilization of transparency as a world society norm. While we rapidly explore the enlightenment and liberal roots of the notion of transparency, we focus mostly in this paper on the period going from 1919 to the present. The first formal mention of transparency at the transnational level appears at the end of World War I, in Woodrow Wilson’s Fourteen Points speech. This speech paved was instrumental for the setting-up of the League of Nations in 1919. Working our way from there, we point to important steps and stages, mechanisms of diffusion and sources of resistance. We follow the conceptual evolution, through time, of the term transparency leading progressively to the contemporary neoliberal variant. Along the way, alternative standards and understandings of the notion of transparency lost ground or were in part integrated into what has come to be a relatively hegemonic norm associated with and sustained by increasingly sophisticated technologies and instruments. In the first section of this paper, we provide a broad survey of the conceptual origins of transparency, going back to its enlightenment roots. We set the conceptual stage, in other words, for the emergence of a preoccupation for transparency. This conceptual stage, we show, has two connected but clearly distinguishable dimensions – a political one centered on democracy and the citizen and an economic one with the market and the consumer at its core. The second section of the paper explores the early formalization of what was not yet called transparency in national

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politics and its timid forays before the 1960s into the transnational space. The third section follows the transparency thread since the late 1960s. On the one hand, we document wildfire diffusion of the notion and of the term of transparency – to many national polities in rapid succession but also into an increasingly dense transnational landscape. On the other hand, we show how different kinds of pressure for information disclosure increasingly converged under a broad and expanding neoliberal agenda. We uncover, in the process, some of the paths that were not taken – that is possible alternative conceptions of transparency associated with different normative underpinnings. The last section of the paper discusses the implications of this study and identifies directions for future research.

Enlightenment and Liberal Roots of Transparency The modern search for and positive valuation of transparency unmistakably has its roots in the Western intellectual revolution associated with the Enlightenment period (Garsten & De Montoya, 2008; Hood & Heald, 2006; Starobinski, 1988). We can characterize the Enlightenment as a desire for human affairs to be guided by rationality rather than by faith, superstition, or revelation; a belief in the power of human reason to change society and liberate the individual from the restraints of custom or arbitrary authority; all backed up by a worldview increasingly validated by science rather than by religion or tradition (Outram, 1995: 3). The Enlightenment man had to escape a “self-incurred tutelage” (Kant, 1965: 89) and to reject the veil of “ignorance” and “obscurity” that had long been imposed by stifling institutional authorities – the Church, nobilities but also the guilds, the masters and fathers. The self-directed man/individual of the enlightenment (Meyer, 1990) strove for knowledge – which he hoped to find through science. He (only later would this become a he or a she) also increasingly came to demand voice, choice and individual initiative –within the political as well as within the economic realm.

The Political Thread – Inventing the Public Sphere

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The modern demand for democratic representation in national politics was born through the Enlightenment. It came together with strong calls for increased transparency, as evidenced in the work of most Enlightenment thinkers such as Rousseau, Kant, Bentham, Voltaire or Tocqueville (Wetters, 2008). “Information rights”, the expanding role of the press, the structuration of a “public sphere” as a space of debate and deliberation, the “rule of law” as the ultimate political logic – de facto delegitimizing “royal fiat” – or the systematic institutionalization of counterpowers were all identified as mechanisms that would increase transparency and choice in the political process. Enlightenment thinkers reacted against a traditional society dominated by stifling institutionalized authorities such as the nobility, the church or the court and characterized by highly formal and mythical ceremonies and procedures aimed at maintaining and legitimating the superiority of those institutionalized authorities. Building upon the model of the Greek Agora, enlightenment philosophers were looking for the reinvention of a public space of debate. Starting in the 18th century, the Salons of the Bourgeoisie in France opened up a space for public debate. Coffee houses and later political associations in the UK, Tischgesellschaften (Table Societies) and reading societies in Germany all played the same role. The proliferation of literary, artistic, political and economic leaflets and publications pertained of the same logic – engaging private persons, multiple individuals directly into debates and deliberations on all kinds of issues. The emergent public opinion was the “enlightened outcome of common and public reflections on the foundation of the social order” (Habermas, Burger, & Lawrence, 1989: 86). This “public opinion”, formed through the mediation of the ”public sphere” was the new sovereign challenging traditional authority. Kant, Rousseau, Tocqueville or Mills all highlighted the importance of exposing political and state mechanisms to the “light” of the public sphere as a first step towards transforming the normative bases of state policies from class norms to the “rationality of the public opinion” (Wetters, 2008). We should not forget, though, that some of the Enlightenment thinkers also underscored a potential reverse risk – Mills and Tocqueville in particular warned against the risk of strong private influences over the public and political sphere with a “privatized” public opinion turning into a new politicized instrument of governmentality (Wetters, 2008).

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The new public sphere was a space where competing private ideas and influences interacted and where public opinion was formed. States and national policies soon started to feel the pressure as the emergence and deployment of a public sphere came together with increasing demands for information disclosure and for more political transparency (Habermas et al., 1989: 65). In this public sphere, different parties attempted to shape public opinion about themselves (representative publicity) while debating and attempting to influence public opinion on state policies (deliberative publicity) (Hood & Heald, 2006). The emergent “public opinion” was in general seen to reflect collective “rationality and reason” and the public sphere increasingly turned into a counter-power, an instrument of surveillance of public officials leading progressively to the idea of “public accountability”. As James Madison, one of the founding fathers of the American Constitution made it clear in a letter to William Taylor Barry (Senator of Kentucky) in 1822: [a] popular Government, without popular information, or the means of acquiring it, is but a prologue to a Farce or a Tragedy; or, perhaps, both. Knowledge will forever govern ignorance: And a people who mean to be their own Governors must arm themselves with the power which knowledge gives (Hunt 1910: 326). In a similar vein, Madison went on, claiming that "the advancement and diffusion of knowledge" is "the only Guardian of true liberty” (Hunt 1910: 330). While originally limited to the Bourgeoisie, the phenomenon of the politicized private actor expanded during the 19th century – leading to the broad and encompassing definition of the citizen as an empowered individual. This empowered individual was not only entitled to but he was also duty-bound to deliberation, choice, representation, education and information. Even women, in time, would come to be included!

The Economic Thread – Inventing the Market As economic exchange expanded well beyond local boundaries in the European middle ages, information emerged as an important factor for the management of distant commerce and exchange (Porter, 1995). The first regular dispatch of information between merchants was structured during the 15th century (Habermas et al., 1989:16). This later evolved into the first commercial newsletter exclusive to merchants and insiders – a “private correspondence 6

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commercially organized by news dealers” (Habermas et al., 1989:16). Information, in the process, became a significant “market commodity” (Fung, Graham et al. 2007). Public newsletters that could be circulated to a wider public emerged later, during the 17th century. The printing press was an important technological facilitator of this evolution, which naturally also inscribed itself within and was reinforced by the broad intellectual revolution of the Enlightenment. Starting with John Locke and Adam Smith, the liberal thinkers who set themselves within the broad Enlightenment tradition extended this consequential intellectual revolution to the economic sphere. All institutions that smacked of unjustified privilege (and hence of nontransparent processes) were strongly denounced. Adam Smith and his followers denounced the mercantilist politics of high tariffs that essentially reflected the power of different lobbies. They also denounced the role of guilds and organized orders, the meeting of “people of the same trade” where most of the time the “conversation end(ed) in a conspiracy against the public or in some contrivance to raise prices” (Smith, 2005: 111). Adam Smith also violently attacked the corporation – because of the powerful and unjustified privileges it enjoyed, thus distorting the competitive game, but also because of the absence of internal transparency that was bound to come with its management (Smith, 2005:55). The theoretical free market, by contrast, was supposed to be a sea of transparent and fair interactions – where self-directed individuals took decisions on the basis of rich and easily accessible information. Smith, however, did not expect such a theoretically ideal state to be easy to attain or to sustain. In his first book, the Theory of Moral Sentiments, published in 1759, Adam Smith suggested the self-destructive nature of a completely free market that would not be stabilized through a strong social infrastructure of “trust” and “sympathy” (Smith, 2002). He suggested also that this necessary social infrastructure depended in great part on the effective notion of an “impartial spectator” (Smith, 2002:12). The social fabric of a well-functioning market demanded that we had or were forced to have a regard to the sentiments of the real or supposed “spectator of our conduct” (Smith, 2002:13). This “impartial spectator” could naturally be the “gaze of God” but it could also simply be the structured and institutionalized “gaze of the others” – imposed through systematic transparency. The Panopticon or full transparency society,

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hence, we could argue, already appeared to Adam Smith as being the other (necessary) side of the liberal market.

Early Formalization and Diffusion of a Preoccupation for Openness This powerful Western heritage, which initially was born in only a small number of nations, has turned out to have, during the 20th century, an impact that went well beyond its countries of origin. The Enlightenment revolution has spread through diffusion, imitation and translation from a small core of Western countries to a number of other states and nations in the making during the 19th and the 20th centuries. Even more importantly, the Enlightenment tradition generated the intellectual clay for the construction of a transnational organizational space in the 20th century. The notion of transparency (if not the word) and its importance have been infused, in that context, at the transnational level, initially through Woodrow Wilson’s Fourteen Points speech and the setting-up of the League of Nations in 1919.

The Principle of “Publicity” in National Polities – A Limited Number of Early Pioneers Within the broad cultural context of the Enlightenment, Sweden was the first country to turn ideas into political practice. As early as 1766, that country adopted what is considered to be the first Freedom of Information (FOI) law – His Majesty’s Gracious Ordinance Relating to Freedom of Writing and of the Press (ACF 2012). The principle at work behind this law is known in Swedish as the Offentlighetsprincipen – the “Principle of Publicity” or “Openness” or “Public Access”, implying that all citizens have a right to know about the activities of those who govern them: In order that nothing should be lacking…we wish to extend the freedom of writing and of the press to the extent that all specific events or known incidents, in part secret and in part more familiar, that have occurred under past governments, either in this kingdom or elsewhere, may be made public, together with political comments on them (Ordinance 1766). Anders Chydenius was instrumental in drafting the Act and pushing for its adoption (ACF 2012). Chydenius was an enlightenment thinker and politician from a small town, Kokkola, in today’s Finland (at the time part of the Kingdom of Sweden). He is often referred to as the “Adam Smith 8

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of the Nordic countries” (ACF 2012). A major contribution of the 1766 Act was the abolition of censorship, with an exception though for those texts that would attack or disparage religion or the royal institution (Ordinance 1766). The scope of the Act was hence limited from the start and, in the following years, it would be further restricted or even suspended altogether for a period (1772-1809). Still this Act imposed the principle of publicity as a structuring principle that would return to be and remain central in both Sweden and Finland from the 19th century forward (ACF 2012). By the early 1960s, though, Sweden and Finland were still the only two countries with a legal formalization of the publicity principle. It was only after the United States adopted a FOI law in 1966 that the rest of the world would follow in rapid succession, as we will show in the next section. The United States had formalized the right to freedom of expression, at the creation as it were, in their Constitution, through the well know First Amendment of the Bill of Rights: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances (Bill of Rights 1791). The Bill of Rights integrated both the freedom of speech and the freedom to print. However, it did not clearly refer to a “principle of publicity” or “openness” or “public access” and hence to transparency as a necessary condition of enlightened government. This would be, on the other hand, the key contribution of the 1966 Federal Freedom of Information Act (FOIA): The 1966 FOIA provides that any person has a right, enforceable in court, to access federal agency records, except to the extent that such records (or portions of them) are protected from public disclosure by certain exemptions or exclusions. The exceptions and exclusions protect classified information, individuals' privacy, confidential information used for law enforcement purposes, and trade secrets (USDOJ 2012). The introduction of the Freedom of Information Act in the United States, in 1966, was the consequence of several developments. First, the increasing number and expanding role of government agencies under the New Deal had led to complexity, a degree of opacity and the desire both within Congress and parts of civil society to keep the government in check. Second, the civil rights movement and more generally the radicalization of American politics in the 1960s in the United States also played an important role (Ackerman and Sandoval-Ballesteros 2006). Third, the introduction of the right to information in a number of important transnational treaties 9

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since the late 1940s (as we document in the sections below) could not but have an impact. As the 1966 Act was being voted, President Lyndon Johnson made a clear argument for it, proposing that: Democracy works best when people have all the information that the security of the Nation permits. No one should be able to pull the curtains of secrecy around the decisions, which can be revealed without injury to the public interest (Johnson 1966). The introduction of the FOI Act at the Federal level was followed by the adoption of related “sunshine” laws in many American states – Florida in 1967, California in 1968, New Jersey or Colorado in 1973 and New York or Tenessee in 1974.

The Transnational Turn The Missed Opportunity of the League of Nations In January 1918, the President of the United States, Thomas Woodrow Wilson, delivered a speech to a joint session of Congress. This speech came to be known as the Fourteen Points speech – it was both reassuring the country and the world that the war was morally justified and defining a roadmap for the postwar period and the forthcoming peace. The first of the Fourteen Points in Woodrow Wilson’s program was the proposition that open covenants of peace (should be) openly arrived at, after which there shall be no private international understandings of any kind but diplomacy shall proceed always frankly and in the public view (Wilson 1918). This proposition was consistent with Immanuel Kant’s argument, in ”Towards Perpetual Peace”, calling for the open character of public Treaties (Hood & Heald, 2006:11). It was also clearly introducing “Transparency” as a key norm, rule and practice in the world of international relations, which until then had instead been characterized by opacity, secret negotiations and covenants. The last of Woodrow Wilson’s Fourteen Points called for the creation of a “general association of nations” (Wilson, 1918). In June 1919, forty-four states signed the covenant creating the League of Nations. The League integrated from the start the principle and mechanism of openness (the term “transparency” was not used) as a tool to enforce cooperation – with peace as the ultimate objective. In his attempt to convince the American Congress to endorse the covenant that created the League of Nations, 10

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Woodrow Wilson was extremely clear on the importance of openness to a stable world peace: If this covenant accomplished little more than the abolition of private arrangements between Great Powers, it would have gone far towards stabilizing the peace of the world and securing justice, which it has been so difficult to secure, so long as nations could come to secret understandings with one another…. Everything is to be open. Everything is to be upon the table around which sit the representatives of the world…. That is the promise of the future; that is the security of the future (Wilson 1923: 107). The association of the League of Nations with the principle of openness was symbolically illustrated in the open architectural competition, in 1927, for the building of a “Palace of Nations”. One of the projects that received most attention was the project of the Bauhaus architect, Hannes Meyer. Meyer proposed to use glass as a key material for the League of Nations building, adopting the modernist association of glass with transparency, fluidity, enlightenment. Describing his architectural project, Meyer insisted that there would be “no back corridors for backstairs diplomacy but open rooms for public negotiation of honest men” (Wise 1998: 25). Less symbolically and more substantively, the League of Nations saw information and transparency as key mechanisms that could contribute to global disarmament. The League thus developed a system of collecting and disseminating data on military matters in support, ultimately, of arms limitations efforts. However, the League was a missed opportunity. There were strong forces of resistance to the covenant in the United States and ultimately the country never joined the League. The absence of the United States significantly weakened the international organization from the start. The League dissolved as World War II was looming – the coming war was the vivid symbol of its failure.

Structuring the United Nations At the end of World War II, the idea of reviving the project of an international community of nations rapidly imposed itself. On June 26, 1945, at the end of the United Nations Conference on International Organization in San Francisco, the representatives of 50 countries signed the United Nations Charter. Today, the United Nations (UN) counts 193 members. The Charter came into force in October 1945. During its First Session, in 1946, the General Assembly of the UN adopted a number of resolutions, amongst which Resolution 59 can be seen as an important early step towards the institutionalization of transparency as a global norm. Resolution 59 made it 11

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clear that “Freedom of information is a fundamental human right and is the touchstone of all the freedoms to which the United Nations is consecrated”. Freedom of information, it went on, implies the right to gather, transmit news anywhere and everywhere without fetters. As such it is an essential factor in any serious effort to promote the peace and progress of the world. Freedom of information requires as a basic discipline the moral obligation to seek the facts without prejudice and to spread knowledge without malicious intent (UN59 1946). The Resolution ended in a call to organize rapidly an International Conference on Freedom of Information (UN59 1946). This Conference was held in Geneva in March and April 1948. Upon closing, it solemnly declared that Freedom of information is a fundamental human right; that each individual has a right to freedom of thought and expression; that he may hold opinions without interference and seek, receive and impart information and ideas by any means and regardless of frontiers (Whitton 1949: 74) The Conference targeted more particularly organized propaganda and censorship. The debates were extremely intense – the Eastern Bloc accusing the West (and specifically the United States) of imperialism and hypocrisy (Whitton 1949). It was quite clear, by the end of the Conference, that a key challenge forward would be to “find a bridge to close the gap between Eastern and Western concepts of freedom of information” (Whitton 1949: 87). On a side, and nevertheless important note, the work of the Conference was in part infused into the ongoing discussions around the preparation of a Universal Declaration of Human Rights. The Charter of the United Nations had affirmed in 1945 the “faith” of signatory members in “fundamental human rights” (UNCharter 1945). Article 68 required the Economic and Social Council to rapidly set up a Commission on Human Rights. This Commission met for the first time in January 1947 and it produced the Universal Declaration of Human Rights (UDHR). Forty eight members of the General Assembly endorsed this Declaration in December 1948, in Paris – eight abstained. The UDHR is clearly a document with intellectual roots in the Enlightenment movement. It owes a lot in its structure and phraseology to the 1789 French Déclaration des Droits de l’Homme et du Citoyen (DDHC 1789) and to the 1791 US Bill of Rights (Bill of Rights 1791). Articles 18, 19 and 20 of the UDHR re-affirmed the importance of freedom of opinion but also of freedom of debate and information. Those three articles were strongly inspired by Articles 10, 11 and 14 of the French Déclaration, by the American First 12

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Amendment in the Bill of Rights and by the work within the International Conference on Freedom of Information. The wording that was used in those three articles would in turn influence the writing of many transnational and national texts that were to be written in the following years. All in all, those three articles anchored the notion of freedom of information and the principle of publicity, openness or transparency (even though the latter term was not used then) into the emergent web of transnational treaties and organizations (UN-UDHR 1948). Lo and behold, the infusion of the information principle into the Universal Declaration of Human Rights went even further. It turned the right to information into a Human Right, hence laying strong foundations for the naturalization of “transparency” that would follow (Chydenius 2006: 80-81).

Inscribing Information Sharing in Economic Cooperation In the immediate post World War II period, there was another path through which the information imperative found its way into the transnational space. This happened through the preparation of the Marshall Plan and the concomitant structuration of economic cooperation at the European level. On June 5, 1947, General George Marshall, US Secretary of State, pronounced an historic speech at the Commencement Ceremony of Harvard University. Assessing the dramatic state of the world and, in particular the chaotic situation in Europe, Marshall called for an organized plan to foster European reconstruction. The purpose of this plan would be “the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist” (Marshall 1947). General Marshall pledged the generous help of the United States, on the condition though that the Europeans would take the initiative. As he made clear: It would be neither fitting nor efficacious for (the American) government to undertake to draw up unilaterally a program designed to place Europe economically on its feet (Marshall 1947). This implied a structured and organized cooperation on the side of Europe, where former allies and enemies alike should work together to prepare a coordinated plan – a mere aggregated shopping list would not do (Djelic 1998: 115). The French government took the initiative and managed to organize, as a first step, a Conference between the three European “great powers” 13

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and “winners of the war” – the UK, the USSR and France. This Conference took place in Paris from June 27th to July 3rd, 1947 and it brought together the Ministers of Foreign Affairs of the three countries – Ernest Bevin for the UK, V. M. Molotov for the USSR and Georges Bidault for France. The Conference was tense at the start and conflictual towards the end (CONF 1947). The main source of conflict had to do with the sharing of information. Having been briefed by the Americans, the French delegation insisted on a tightly coordinated European-level plan that would aggregate an assessment of resources, strengths, needs and projects of the different countries. There was urgency – such a plan should be ready by the early days of September and sent then to the American government and congress. Only if the latter were convinced that Europe was getting organized to help itself as a collective would there be a chance that the United States would pledge significant aid. France suggested the organization of a loose committee structure to organize the work – what would become 15 days later the Committee for European Economic Cooperation (CEEC) and morph into the Organization for Economic Cooperation and Development (OECD) in April 1948 upon the launch of the Marshall Plan. The idea was that each country that accepted to participate would present to the Committee a detailed account and assessment of its situation, of its production objectives and of its needs – following a predefined and common format (CONF 1947: 7). The Soviet Delegation reacted very strongly against this proposition – on the grounds that such open sharing of information between European countries and de facto also with the United States would be equivalent to a major infringement on the national sovereignty of the nations concerned (CONF 1947: 32). The French Minister denied strongly that this would be the case, insisting that “the proposal had only for objective to gather and coordinate the statistics and economic data or information that w(ould) be willingly provided by the Europeans nations desiring to be involved” (CONF 1947: 43). But the positions could not be reconciled and the Soviet delegation left the Conference determined not to participate. Later on, the USSR would drag into this refusal the other European countries of the Eastern Bloc. Looking at this episode with hindsight, it is quite clear that it significantly contributed to the materialization of the split between East and West in postwar Europe. We realize also that one of the important normative underpinnings of the Marshall Plan was detailed information sharing. The requirement for what we would call today “economic and financial transparency” 14

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was the main reason why the Soviet Union left the negotiation table and refused to participate in the Marshall adventure (CON 1947, Djelic 1998, Crawley 2007). The statistical management of progress, output and needs in European industries and nations was a structuring feature of the Marshall plan, even before it was even formalized, and it remained so once the Plan had become operational. The Marshall Plan, in other words, was the first development in history that put pressure on sovereign states (here European states) to generate detailed economic indicators and to open up and share all available information for the purpose of what we would call today “transnational accountability”. Since the Marshall Plan has been the “mother” of all Foreign Aid Programs ever since, the significance of such an orientation should not be minimized – from that point on, any form of transnational cooperation would come together with systematic information sharing, increasingly in the form of pre-formatted statistical data. And in fact, the OECD, which was an organization created for and through the Marshall Plan, but that survived it, has redefined itself through time as a major provider and carrier of such statistical openness and accountability. The OECD is undeniably today one of the main kernels of transnational transparency and this is an identity that it claims for itself: Promoting the openness, propriety, integrity, and transparency of business and governments and fighting against corruption remain key activities for the Organisation (OECD 2012).

From “Publicity” and “Information” to “Transparency” – Spreading like a Wildfire The developments we have followed above show that, by the late 1960s, the information, publicity and openness principles had settled and been anchored in a stable way within a small number of Western polities but more importantly, for the story we are telling here, in key international organizations and emerging transnational spaces. The seeds of “transparency” had been planted. We now turn to the period of rapid diffusion. We explore in turn some of the more striking moments or developments – the wildfire diffusion of freedom of information acts; the shift to the dominant use of the term “transparency”; the progress of markets and the evolution of “transparency” in the neoliberal turn; the generalized audit society shaping markets, private organizations but also public and semi-public actors, NGOs and international organizations alike.

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The Push for Democracy – FOIs and the Generalization of Openness and Public Accountability The push for democratization has been a characteristic trend of the past two hundred years, in spite of striking periods of backlash such as in the 1930s or in the immediate aftermath of World War II (Markoff 1996; Torfason & Ingram, 2010). Arguably, though, the push for democratization has accelerated over the last forty years or so. The fall of communism has been an important turning point. But many studies also focus on the all-important role of international organizations (the IMF, the World Bank, the United Nations…) and of transnational non governmental organizations (NGOs) in this acceleration of the diffusion process (Gleditsch & Ward, 2006; Torfason & Ingram, 2010). The underlying assumption behind the global diffusion of democratic information rights has been the superiority of the democratic social contract compared to other types of state/society organization and, additionally, the sense that information-based accountability mechanisms between the public and the state have global applicability and can possibly further the push towards democratization. Transparency, in that context, is a key prerequisite for democratic participation and deliberation (Habermas et al., 1989) and an instrument to ensure increased “public accountability”, which like “sunlight” can “kill infections” (Hood & Heald, 2006). After the United States adopted its Freedom of Information Act in 1966, and in the context of an inscription by the United Nations of the information principle into universal human rights, there was a rapid adoption across the western world of freedom of information (FOI) laws. Non-Western countries followed somewhat later and FOI laws have spread fast around the global over the last three decades. Those FOI laws all endorsed the importance of freedom of opinion, freedom of assembly but they have also integrated freedom of information and the publicity principle as described above. Hence FOI laws give citizens, other residents, and interested parties the right to access documents produced and held by the government without being obliged to demonstrate any legal interest or "standing" (Ackerman & SandovalBallesteros, 2006:6). In 1966, only three countries in the world had a FOI law – Sweden, Finland and the United States. There were 12 countries with such a law in 1990.1 As Figure 1 shows,

 Norway  and  Denmark  passed  their  law  in  1970,  France  and  the  Netherlands  in  1978,  Australia  and  New   Zealand  in  1982  and  Canada  in  1983.   1

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adoption was then particularly rapid and by 2010, close to 90 countries had a FOI law in place. Notable regional exceptions are the Middle East and Sub-Saharan Africa. Figure 1. Global adoption of Freedom of Information Act 1966 - 2009 Nations with a Freedom of Information Act in 1966 (dark shading)

Nations with a Freedom of Information Act in 2009 (dark shading)

Source: opengovernmentrecords.net Adoption at the national level of those legal instruments was all the more rapid as freedom of information was being inscribed in parallel in many different transnational organizations and codes. As indicated above, the information principle had been written into Article 19 of the Universal Declaration of Human Rights, making information a human right amongst others: Article 19: Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers (UN-UDHR 1948). The International Covenant on Civil and Political Rights that was signed by the UN General Assembly in 1966, even though it only came into force in 1976, strongly re-affirmed that every 17

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person shall have the right to seek and give information freely, in its own Article 19. The Maastricht Treaty, signed in 1992, inscribed in its Final Act and Declarations, not only the right to information but in fact a strong publicity and openness principle. It is notable that this was the first time a European-level public document used the term of “transparency” to refer to this principle: Declaration 17: The Conference considers that transparency of the decision-making process strengthens the democratic nature of the institutions and the public's confidence in the administration. The Conference accordingly recommends that the Commission submit to the Council no later than 1993 a report on measures designed to improve public access to the information available to the institutions (EU 1992). By 1997, in the amended version of the Treaty of the European Union, signed in Amsterdam, Article 1 had been modified to include the notion of “openness”, presented as essential to the Union identity: this Treaty marks a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the Citizen (EU 1997).2 The European Directive 1049/2001, promulgated in 2001 explained more precisely what was meant by this notion of ”openness” – laying out, through the principle of transparency in a generalized form, the rights of access for regular citizens to documents produced and held by European public authorities (EU1049 2001). In parallel, the Charter of Fundamental Rights of the European Union, signed in 2000, incorporated freedom of expression and information in its Article 11. Interestingly, the adoption of FOI laws within national polities across the world has progressed relatively independently of the nature of governments. This certainly explains that in spite of such rapid formal adoption, many external observers (the NGO Transparency International in particular) still consider many countries with formal FOI laws to be highly opaque. The swift adoption of FOI laws by a number of countries that remain in practice highly non-transparent is consistent with the findings of Hafner-Burton et al. that nations with the worst  Earlier  versions  of  that  Article  read:  “This  Treaty  marks  a  new  stage  in  the  process  of  creating  an  ever   closer  union  among  the  peoples  of  Europe,  in  which  decisions  are  taken  as  closely  as  possible  to  the   Citizen”   2

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human rights records are more likely to adopt the UN Human Rights charter in order to improve their legitimacy within the international community (Hafner-Burton, Tsutsui, & Meyer, 2008).The diffusion of FOI laws and of the notion of transparency as a tool for democratization has naturally come with a fair amount of localized translation reflecting the encounter between a formal world society norm and embedded institutions and practices (Roberts, 2000). This suggests that what appears at first sight as a single transnational formal standard (and we have indeed documented a lot of cut and paste) is likely to play out on the ground rather as a set of more or less connected and compatible localized standards of practice (or of absence of practice). This multiplicity of standards – or rather of variants of standards – should however not be necessarily seen as stable. Several socialization processes and normative instruments are at work that may push through in the direction of at least partial concordance if not homogenization. The international ratings of different states’ “transparency” levels by organizations such as Transparency International, Freedom House and the IMF are examples of potent normative instruments playing such a role. Western-type media and education and their worldwide diffusion are other important socialization mechanisms with possibly a long-term impact. May be even more importantly, we see the emergence and stabilization of a dense ecology of actors, organizations and networks bound together by the transnational fight for the “freedom of information”. We see, in other words, the emergence of a broad-based transnational community, where members share what can be described as a culture of “transparency” (Djelic and Quack 2010; Djelic and Quack 2011). The Freedom for Information Advocates Network (FOIAnet) was created on September 28, 2012. It defines itself as “an international information-sharing network of organizations and individuals working to promote the right of access to information” (FOIAnet 2012). As of April 2012, it counted 200 members, mostly civil society organizations. FOIAnet has established September 28 as a global “Right to Know Day” and celebrates that day every year through the organization of events in different regions of the world. Amongst the 200 members of FOIAnet, let us point to a few important nodes. Transparency International is one of the oldest such node. An NGO founded in 1993 through the initiative of Peter Eigen, a former high ranking member of the World Bank, Transparency International has become by now a global actor that monitors and renders public different forms of corruption across the world (IT 2012). Notable is the fact that Transparency International was the first organization to directly use in its self-definition the word and notion of “tranparency”. Freedominfo.org is a virtual 19

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network that was also launched in 2002 – in its self-description, it is a “one-stop portal that describes best practices, consolidates lessons learned, explains campaign strategies and tactics and links the efforts of freedom of information advocates around the world” (FIO 2012). The initial funding for this network was came from the Open Society Foundations, itself set up in 1984 and also a member of FOIAnet. The Open Society Foundations is better known as the George Soros Foundation. Article 19 (which takes its name from Article 19 of the UN UDHR) is an NGO based in London and created in 1987. Working with “90 partners across the world”, Article 19 defines its mission as “strengthening national capacities and building or reforming institutions to protect transparency and the free flow of information” (Article 19 2012). The Right2INFO.org is an information website that was launched in 2008 again by the Open Society Foundations. Its mission is to aggregate legal and constitutional information on the right to access information across the world, as well as to build a library of case law from more than 80 countries (Right2INFO 2012). We could go on, as the community appears to become more dense everyday.

The Progress of Markets – Transparency and the Neoliberal Turn As early liberal economists had already been keenly aware, markets and market logics come together with information demands. More or less in parallel to the developments associated with democratic disclosure and freedom of information, calls for transparency also emerged and expanded in the context of a revival of liberal economics (Campbell & Pedersen, 2001; Mirowski & Plehwe, 2009). The rapid progress of neoliberalism ever since the late 1970s has resulted in the expansion of markets and market logics in almost all aspects of economic but also of social life (Djelic 2006). In most parts of the private sector, production and consumption have been re-organized in order to allow for more market logics. Firms should “focus on their core competencies” and leave the rest to the market (Prahalad & Hamel, 2006). They should outsource some of their activities – including those traditionally associated with internal administration. Remaining activities should be structured so as to leave as much play as possible to “internal markets” (Halal, Geranmayeh, Pourdehnad, & Ackoff, 1993). Even more consequential, marketization has also been felt in the form of an opening of up-until-then “protected” spheres to market logics and competition. In many European countries, this came 20

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together with national policies of privatization and liberalization. It also reflected a certain form of “retreat of the state” – the latter divesting from many spheres it had previously been closely involved with (like telecommunication, post, health, education, culture….). Market logics have now colonized the organization of government and state functions in many parts of the world, the structuring of regulation through the proliferation of soft law, the functioning of justice through the progress of alternative dispute resolution types of mechanisms, health and social insurance provision through the expansion of private schemes and private service providers (Djelic, 2006). In fact, this marketization pressure is being felt deeply and broadly, including in our everyday personal lives. For example, Eva Illouz convincingly shows that very intimate spheres (like the self, friendship or love) have not escaped those pressures, far from it (Illouz, 1997). The progress of market logics has been visible locally, nationally but also transnationally. In the transnational arena, international organizations such as the World Bank, the IMF, the OECD but also multinational professional service firms of different kinds have been important mediators in the circulation and adoption of market structures and market logics across the world and across the board. Pressure for information and transparency in the economic sphere has significantly increased over the past forty years or so, in parallel to the globalization of markets and to the diffusion of the neoliberal marketization logic. The implicit assumption of international organizations such as the IMF or the World Bank, when they prescribe transparency for economic exchange, is the superiority of the Western liberal economic model based on principles of macroeconomic stabilization, deregulation and liberalization of foreign trade and capital flows (Elkins & Simmons, 2004). This model is defined as being globally applicable while contractual and information-based economic organization is championed as a superior global mode of market/economic organization. Market-based information demands reflect a conception of information as commodity and therefore generally target only the principal (or potential principals). The principal can be narrowly defined following particular contractual lines (often associated in our modern world with the “shareholder” population) or it can be more widely interpreted as integrating different “stakeholders”. Those two paths to transparency unmistakably point to significant differences and hence could again suggest various “standards” of transparency in the contemporary world.

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Forces at play in the global diffusion and associated translation of transparency pressures in the economic sphere are a combination of coercive (IMF’s conditional credit for instance), mimetic and normative instruments (international rankings of business friendliness for example). Socialization mediators, such as Western business and economics education and their global spread, structured transnational networks and communities (Djelic & Quack, 2010; Haas, 1992; Marcussen, 2006) are also quite significant. All these different mechanisms are reinforced and strengthened by the degree of connectedness of given countries and organizations to international capital markets and global supply chains. Countries that are highly dependent on foreign direct investment or debt are more inclined to abide by international capital market demands (Morgan, Whitley, & Moen, 2006) and countries that are dependent on conditional loans from the IMF are more likely to follow its recommended practices. One example of marketization-based transparency initiatives introduced by international organizations is the IMF’s Fiscal Transparency initiative, which sets guidelines for government fiscal transparency supported by normative instruments such as transparency ratings for states. On its website, the IMF states that “inadequate clarity on government policy had undermined market confidence” and recommends that “transparency in government intentions, based on higher quality data published timely, should be further advanced to provide market players with predictability” (IMF 2010). It is important to underscore at this stage that contractual and information-based economic organization is not the only available alternative for economic organization. Several studies describe alternative forms of principal protection and economic organization. For example, Geertz provides a description of how economic organization in Middle Eastern markets is based on dense, trust-based networks between market actors and exclusion-based sanctions for breach of trust, rather than on Western contractual and information-based mechanisms (Geertz, 1956).

From Statistics to Audit – The Managerialization of Transparency A surprising characteristic of the revival of markets in our contemporary era is that it has come together with the rapid development of managerialisation. This is surprising because, at least in principle, managerialization comes together with the progress of hierarchies while marketization should normally imply a preference for markets over hierarchies and managerial bureaucracies 22

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(Djelic 2007). This progress of the practice and mantra (if not “religion”) of management has strongly influenced, naturally, the private sector. But it has also made significant strides well beyond – with an impact on governments and state bureaucracies through the rapid diffusion of New Pubic Management (Hood 1995, Christensen and Laegreid 2010), on the health sector (Scott et al. 2000), on education (Mazza et al. 2008, Beckmann et al. 2009), on the police (Terpstra and Trommel 2009), on cultural industries (Zan 2006), on the church (Evans and Percy 2000), on the NGO sector (Hwang and Powell 2009, Maier 2010) and even on law and legal practice (Edelman et al. 2001). The widespread managerialization of our world has carried with it the progress of an “audit society” (Power 1997) where “audit is becoming a constitutive principle of social organization” (Power 1994: 299). Audit, as Michael Power documents is a powerful ”vehicle for the dissemination of distinctly ‘managerial’ values and ideas to all spheres of formerly professional autonomy” (Power 2008) The Audit Society comes together with a discourse on accountability and transparency. It suggests external scrutiny naturally but it is also dependent upon an ever thicker and denser web of internal mechanisms of self-control. Finally it implies that measuring and quantitative metrics become the basis of evaluation everywhere. This concretely means that activities should become or should be made ”auditable”, measurable through certain quite specific tools. Ultimately, “what is counted” usually becomes “what counts” (Miller 2001: 382). The early statistics of the CEEC have become complex sets of sophisticated measuring tools. An important channel of this “audit revolution” has been the accounting profession, which has become, in the process, increasingly global and powerful (Greenwood & Suddaby, 2006). Accounting disclosure as a cornerstone of the Western approach to market organization has been a key instrument of information demand for several centuries. Dutch and British East and West India companies all had sophisticated accounting disclosure systems (Baladouni, 1983). During the past three to four decades however, norms, organizational structures and even the accounting culture have become increasingly transnational if not global. The International Accounting Board (AIB) and the International Financial Reporting Standards (IFRS) now play a key role in the global liberalization agenda. Pushing for compliance with IFRS is now on the agenda of transnational organizations such as the IMF, the World Bank, Financial Stability Board or the Bank of International Settlements. Compliance with IFRS is also a key precondition

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for being a member of different world society communities with an economic base (Arnold, 2011; Bengtsson, 2011). Accounting disclosure demands have historically targeted shareholders and regulators rather than the public at large. However, the fast expansion of stock exchanges and listed firms as a new model to raise capital around the world over the last three decades has meant more demands for “public disclosure” of corporate accounting information by regulators, transnational organizations and investors alike. With the empowerment of shareholders and the shift from managerial to shareholder capitalism (Davis & Thompson, 1994; Dore, Lazonick, & O’sullivan, 1999), shareholders have put increasing pressure on firms for more disclosure not only of financial information but also of governance practices, corporate strategies and risk management strategies. In parallel to this “audit society” connected mostly with market pressures and a consideration of the shareholder and of the investor, there has been also a fast increase, over the more recent period, in the transparency and audit pressures reflecting the normative basis of the public accountability of firms. As multinational firms become large and powerful, they become targets for democratic claims and calls for disclosure on a par with states and governments. Civil society actors have organized themselves, increasingly at the transnational level, to demand information and data on the strategies and practices of those large firms that might be generating negative externalities for the society and the environment at large (Tarrow, 2005). Environmental accounting and pressures for firms’ increased disclosure of their environmental and social footprint has been a fast expanding arena especially during the past 30 years (Gray, 2010; Lehman, 1999). Environmental accounting has expanded to include multiple sets of norms and standards, transnational organizations and multiple transnational civil society movements (Kim & Lyon, 2011; Mason, 2008; Massie, 2001). The normative basis for demand for information is a mix of public accountability arguments similar to the transparency pressures governments have been facing and market based arguments pointing at the relevance of environmental and social performance for the financial performance and sustainability of firms. Environmental and social reporting increasingly makes use of the same tools of quantification, cost benefit analysis and audit as classical financial accounting (Lehman, 1999). Reporting standards such as the Global Reporting Initiative (GRI) or the Carbon Disclosure Project all consider auditing of environmental and social reports as key legitimizing processes. And the big four accounting and audit firms have seized upon this new market, launching audit 24

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operations for the environmental and social reports of their clients. In summary, environmental, social and governance transparency pressures have been integrated into the broader neoliberal logic of transparency, audit and surveillance along with financial disclosure (Gray, 2006; Lehman, 1999). On a side note, it is important to indicate that transnational organizations such as the IMF or the World Bank, which have played a key role in pushing market- and even democratic-based transparency pressures on governments and market-based transparency pressures on firms have stayed conspicuously silent on the matter of environmental, social and ethical accountability. Facing a multiplicity of transnational transparency pressures that reflect various logics and stem from different types of actors and constituencies, multinational firms generally find it necessary to establish, from within, their own platforms for “self-regulation” or “selftransparency” (Anton, Deltas, & Khanna, 2004; Levi-Faur, 2005). The term “transparency” is used across the board now. We have shown above that it has come to invade the sphere of democratic disclosure – whether targeting governments and public arenas or private firms. The term is also used in the context of market disclosure – whether in the financial audit language or in the environmental and social audit sphere. Some examples here include the Extractive Industries Transparency Initiative, the Carbon Disclosure Project, the Access to Nutrition Index or the Access to Medicine Index. All these initiatives highlight “transparency” as one of their key demands for firms and they will rate those firms according to their level or degree of transparency. “Transparency” is the key word (and ultimate objective) behind any kind of information demand that is being put upon states, public agencies, private organizations, or even non-profit and media organizations. As we suggested above, the “transparency wave” is even having an impact on individuals themselves – which are taken up, through a boomerang kind of effect, at their own standards of transparency. Politicians have to be transparent, so have personalities with a public profile in general. But managers increasingly are also called upon to live up to a certain standard of transparency and so are scholars and intellectuals of different kinds – who are all becoming “auditable” and “visible”. Such intense and multidirectional pressure, this explosion of standards, soft laws, principles, audits and platforms for self-transparency undeniably increase transparency pressures. But do they really mean that nothing much can escape the contemporary Panopticon? This remains debatable. Some observers argue that the multiplicity of norms, standards and pressures 25

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has resulted, in reality, in an overflow of information and data that has tended to hide rather than reveal and make transparent the impact of global firms and actors on human societies (Gray 2010). In the same way, the management of “personal” transparency” may increase rather than decrease the opportunity to hide behind a plethora of nicely groomed masks.

Discussion – Transnational Transparency and the Encounter of Two Normative Paths As we followed, in this paper, the thread leading to contemporary transparency, we showed that both democratic- and market-based information demands are deeply rooted within an enlightenment tradition. We also showed that, well into the second half of the twentieth century, democratic- and market-based pressures had followed entirely different paths. One was being pushed by a combination of civil society and enlightened political leadership. The other was being traced by the foreign aid and investment community, relayed in time by financial and accounting regulators. If we focus at the transnational level, we can identify those two different paths and explore important historical steps along the way. Table 1 provides a schematic and incomplete overview of the transnational ecology pushing, in each case for different types of transparency and openness.

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Table 1. Categories of transnational transparency pressures and transnational organizations for transparency

Market based information demands

Target

Examples of Transnational Organizations

Examples of Transnational Normative Instruments

Governments

World Trade Organization

IMF The Financial Sector Assessment Program (FSAP)

IMF

World Bank Business Friendliness Ranking

The World Bank Multinational Firm

Stock exchange regulators

Standard & Poors Financial Transparency Index

Investor coalitions

Governance rankings

The IMF

IR Global Rankings ("IRGR") for disclosure and corporate governance

Financial Stability Board Bank of international settlements The World Bank International Corporate Governance Network Democratic / public accountability based information demands

Governments

Transparency International

Freedom in the World Ranking

The World Bank - –e.g. Open Government Partnership Freedom House International

IMF Fiscal Transparency Ranking

The IMF – Fiscal Transparency Initiative Multinational Firm

United Nations

UN Global Compact Signatories List

Extractive Industries Transparency Initiative

GRI reporting compliance

Carbon Disclosure Project

Access to Medicine Index Transparency ranking of Pharmaceutical Companies

Transparency International

CDP respondents’ list

As we have shown in the historical thread we followed up until now, the same principle has been labeled differently through time. The idea that citizens should have an (relatively) open access to 27

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government processes, acts and documents inscribed itself in the Enlightenment revolution of the Rule of Law – where the “People” was ultimately (or should be) its own Sovereign. This principle was associated from the start with the right to free opinion and speech, the right to “write and print”, the right to peaceful assembly and to information. It was also associated with the strong criticism of and the desire to limit if not outright ban censorship. In the Swedish law of 1766, this principle was known as the “offentlighetsprincipen”. The Swedish word “offentlig” translates in English into “public” – in the sense of “open”. And the term “offentlighet” means “publicity” (to make, render public). Hence the notion of “offentlighetsprincipen” can be alternatively rendered in English as the “principle of openness”, the “principle of publicity”, the “principle of public access” or the “principle of open access”. This reference to “openness” was still quite present in the early part of the 20th century and it was clearly at the core of the selfidentification of the League of Nations. Starting with the United Nations Resolution 59, the term “openness” was much less present as such. Instead, reference to “freedom of information” or even to a (human) “right to information” became increasingly generalized and predominant. This could be seen in the transnational texts that followed as well as in the wording of early national Freedom of Information (FOI) Acts. Well into the 1970s, in any case, we find only scant and rare use of the term “transparency”.3 The use of the term “transparency” to refer to open access to government information and processes can only be documented for the past forty years, with the first references dating back to the early 1970s. Still, while the use of that term is a relatively recent phenomenon, it would come to spread like wildfire from the 1990s forward. The term was integrated in most transnational and national documents dealing with “freedom of information” or the “principle of openness”. But the term transparency, as we will show below, would also come to be used more broadly as the “principle of openness” came to be reframed into a “principle of accountability”. All institutions, all organizations – whether public, semi-public or private hence came to face a transparency imperative. Arguably, this imperative has had a tendency to have a boomerang effect also on each of us as individuals. While the “principle” of openness” was born from an

 An  interesting  exception  that  we  mentioned  rapidly  in  Section  2  of  this  paper  is  the  use  of  the  term   ”transparency”  in  the  theorization  of  modernist  architecture  (REF).   3

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enlightenment preoccupation to empower the individual, the notion of “transparency” today paradoxically also means the systematic scrutiny of individuals by public or private organizations and authorities (REFs). The success of the term can be documented and illustrated in different ways. A systematic exploration of the documents having to do with “freedom of information”, both national and transnational, shows that the term “transparency” progressively made its way into those documents in the 1990s with a real acceleration during the last decade. While the term was nearly nowhere in the 1980s, it is now included in all such documents. Within official European documents, we traced, above, the early apparition of the term to the Maastricht Treaty in 1992. In UN documents, the generalization of the term took place starting in the mid-1990s. During the 2000s, several organizations of the broad ecology we described above have produced “model freedom of information laws” – all those model laws now directly refer to a principle of “transparency”. Figure 2 shows, on the other hand, how the use of the term “transparency” has exploded within some of the mainstream “global” (in fact Western) press outlets: Figure 2. Citations of the term “Transparency” in the top five global newspapers and magazines - 1983 to 2009 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

0

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Source: Factiva - publications covered: The Financial Times, The New York Times, The Economist (United Kingdom), International Herald Tribune, The Wall Street Journal, The Washington Post Naturally, democratic- and market-based forces for transparency are likely to cross-fertilize and reinforce each other (Maravall, 1997; Nelson & Kochanowicz, 1994). In particular, transparency demands that are initially market-based are likely to result in more openness and information disclosure in general and to confront traditional power hierarchies with an alternative model – a supply and demand based race to economic merit and rewards. But beyond this possible complementarity through time, it is clear that another dynamic has been unfolding over the past decades. While the two paths – democratic- and market-based pressures – are identifiable and can be easily differentiated, we have also underscored, in the latter part of this paper, increasingly fluid boundaries and space for hybridization. It appears, in fact, that at the transnational level democratic- and market-based transparency pressures have increasingly been reconciled (if not converged) under a broad and expanding neoliberal agenda. Transnational organizations, particularly those clearly dominated by Western powers such as the IMF, the World Bank or the OECD (but arguably also the UN and its agencies) have been and remain key mechanisms and channels of this reconciliation. Within a neoliberal logic, many of the functions that the State previously controlled under its political mandate have been redefined as at least partly market-based functions. As a consequence, political actors are not only accountable anymore to their political constituencies but they also increasingly become economic actors accountable to market actors. While transnational organizations such as the IMF or the World Bank play a significant role in pushing these principles throughout the world, private organizations such as the (infamous) rating agencies have come to impose accounting rules on nation states in a way that was only applicable to private firms before. The current debt crisis in Europe has made this very explicit. It brings to the fore the fundamental conflicts that states and governments have to deal with between long term public accountability and short-term market pressures. For now at least, the balance is clearly weighing in one direction. As they inscribe themselves in a neoliberal transnational world, states and governments are having to face and deal with a powerful marketbased pressure for transparency while democratic or public-based accountability language is

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being de-emphasized. The IMF provides us with a clear case of such blurring of boundaries, where transparency is justified in parallel according to both logics – with the last word belonging to “financial markets”: The IMF also encourages its member countries to be as open as possible about their economic policies. Greater transparency encourages public discussion of economic policy, enhances the accountability of policymakers and facilitates the functioning of financial markets (IMF Governance and Accountability 2012). In a parallel but reverse trend, a dense ecology of transnational organizations and civil society movements have put increasing pressure on private firms – demanding transparency with respect to their social and environmental impact. Hence, private firms are not only held accountable as economic actors anymore. Within the broad movement of corporate social responsibility, private firms are being redefined as “quasi public” actors with, therefore, an associated public accountability. The way in which this public accountability is being operationalized, though, is very much through the tools of market-based transparency. Under the notion of sustainability, environmental and social transparency pressures are being framed as market information needs rather than as democratic accountability demands. The rationale goes this way - firms have to be transparent about their environmental and social behavior because investors think that those issues are material to the financial performance of firms. What is good, in the long run, for society and the environment is good for the financial and economic performance of the firm – and may be even vice versa. Hence, public accountability pressures that weigh in a serious way on global firms are in large part in the process of being redefined as market-based transparency and information demands (Gray, 2010). As an example, on the Website of the Carbon Disclosure Project (CDP), which is a global multi-stakeholder project aimed at imposing transparency on companies with regard to carbon emission, the head of the California Teachers Pension Fund is quoted as saying “CDP data is essential for our corporate governance engagement to boost long term value of the Teachers Pension Fund”. Along the same line, the Extractive Industries Transparency Initiative blurs the boundaries in the definitions of its principles. The Extractive Industry Transparency Initiative is an international multi-stakeholder initiative aiming at firm and government transparency around extractive industries – revenues to states and firms, payments to officials. The way in which it frames, though, this essentially democratic and anticorruption fight is strongly influenced by the language of market-based transparency:

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We underline the importance of transparency by governments and companies in the extractive industries and the need to enhance public financial management and accountability. We recognize the enhanced environment for domestic and foreign direct investment that financial transparency may bring. Hence, in summary, it appears that over the past three to four decades, democracy- and marketbased pressures for transparency have come to intertwine and combine. This blurring of boundaries has meant a convergence of language and normative instruments. It has also meant that all actors – whether public, private or civil society actors – are facing transparency demands that are rather similar both in form and substance. We see, in the process, the emergence of a broad-based dominant notion of what Transparency is and should be. This notion has shed away many of the characteristic elements of the historical tradition described above through the “principle of openness” while donning new features associated with the progress of an “audit society”. This emergent understanding of Transparency is turning into a powerful world society norm – a meta-rule of many “games” whether played at the transnational or national level. The eponymous transnational NGO – Transparency International – provides a clear definition of this emergent world society norm: Transparency can be defined as a principle that allows those affected by administrative decisions, business transactions or charitable work to know not only the basic facts and figures but also the mechanisms and processes. It is the duty of civil servants, managers and trustees to act visibly, predictably and understandably” (Transparency International 2012).

Conclusion – Transparency in the Global Audit Society: Hegemonic Trail or the War of Standards? We

have

shown

in

this

paper

how

the

convergence

of

democratization

and

marketization/managerialization forces associated with neoliberalism have together contributed to the emergence of Transparency as a powerful world society norm. Arguably, the strength of this norm reflects its capacity to encompass information demands of different types (democraticand market-based) and to impose them on public, private and not-for-profit actors alike. This high degree of legitimacy and normative clout explains that the term transparency is now regularly mobilized to call for all types of information demands. We mentioned above that the individual is sometimes the unwitting target of this expansion of the term. Recently, for 32

Submission to EGOS 2012 – Sub-theme 15: Multiplicity and Plurality in the World of Standards Working Paper – Please do not circulate or cite without the authors’ permission

example, the notion of transparency has been mobilized to call for openness and public access with regard the private information that is generated and stored through social media and other internet-based tools (Openbrands, 2012). The idea is that we live in an “OPEN” world and that the technology has been and is a key instrument of that – “OPEN” government, “OPEN” culture (Facebook), “OPEN” source, “OPEN” brands. Transparency should not be feared – rather it should be embraced willfully but even more importantly it should be strategically managed (Openbrands 2012). Along the same line, the Anders Chydenius Foundation recently awarded its annual “Transparency Award” to Linus Torvarlds, the creator of the Linux operating system and one of the key figures in the open source software movement. The Foundation believes that “transparency in innovation” can be a driving force for the fast emergence of publically useful and affordable technologies (ACF, 2012). From Anders Chydenius’ enlightenment fight to Linux, the meaning of Transparency indeed has evolved! For the past two hundred years or so, the idea of democracy has progressively come to impose itself. Over the last forty years, the push towards democratization has increased in scale and scope and democracy has become a world society norm – always mobilized and claimed, sometimes (or even often) decoupled on the ground from political practice. This spread of the notion of democracy over that period has come together, though, with a consequential shift in the nature of what we expect when we talk of democracy. To put it simply, the change has gone from an enlightenment understanding of representative democracy to a contemporary understanding of democracy where representative democracy is complemented or sometimes even displaced by more diffuse forms of deliberative democracy (Mörth, 2006). Both ideal types of democracy, in spite of their real differences, imply forms of accountability, hence demands for information and varying degrees of transparency. Since the 18th century, the idea of selforganizing markets as a source of collective prosperity has made its way. Ever since the late 1970s, the progress of neoliberalism has fostered a strong return to this “culture of markets” – where markets are understood to be of superior efficiency for the allocation of most if not all goods and resources, whether material or symbolic. Neoliberalism has also come together with a profound reinvention of the State and its role. It has generally implied privatization, liberalization and the move to a more hands-off ”regulatory state” (Levi-Faur & Jordana, 2005). It has also generated a managerialization of all economic and social spheres – whether private,

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Submission to EGOS 2012 – Sub-theme 15: Multiplicity and Plurality in the World of Standards Working Paper – Please do not circulate or cite without the authors’ permission

public or even not-for-profit. Here again, calls for information and increased transparency have spread in parallel to these developments. Both paths – the democratization and market paths – are now and in fact increasingly being played out at the transnational level. Transnational organizations, networks, communities, NGOs, firms or expert groups are all relaying calls for transparency along those two paths – contributing to the emergence of what can be labeled a global accountability and audit society (Power, 1999). Interestingly, at that level both paths increasingly tend to reinforce and crossfertilize each other. Global deliberative democracy is in itself a “market” for ideas and rules. Global markets imply broad based representation of and often deliberation between many different interests. The tools for transparency increasingly tend to be the same, therefore, at least formally. Facing an increasingly multilateral world where both the normative and economic hegemony of the West is increasingly questioned (and probably will be even more in the future), transnational organizations such as the IMF and the World Bank are at a key crossroad. While historically, backed by normative pressures and conditional loans, nations with different cultural and institutional backgrounds were receptive to Western-backed transnational norms, many nonWestern nations now vow for more presence and influence in the transnational arena. Recent transnational negotiations aiming at diffusing the norm of transparency to such non-Western governments such as IMF’s attempt at improving the transparency of the Sovereign Wealth Funds of Middle Eastern and Asian countries, have exposed this emerging dynamic (Mehrpouya, 2011). The future path for circulation, translation and adoption of western backed transnational norms and standards such as Transparency might not be in the future as smooth as it has been in the past!

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