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Last updated: Sep 13th, 2011


Transparency is an important concept in organizations, such as government and business, which captures the degree to which the workings of the organization are public knowledge. Transparency can apply to accounting and finances, decisionmaking, and also to other actions of an organization.

The information age has facilitated a massive increase in the potential for transparency, but in practice, many organizations, including ones which are in theory "supposed to be" transparent, are not as transparent as one might expect.

Benefits of Transparency:

The largest benefit of transparency is that it exposes problems so that they can be easily addressed and solved. Transparency in government helps to prevent or curb corruption, and transparency in business and financial markets can make markets more efficient by making it easier and less costly to identify vacant niches and business opportunities. Transparency in laws keeps legal costs low and is good for business, as well as ensuring better representation in a representative democracy.

Drawbacks to Transparency:

It can be argued that transparency is not universally good or beneficial to society. Transparency can be harmful in situations in which there is a party acting with malicious intentions, and it is necessary to withhold certain information in order to keep this party from influencing society in a damaging way.

As an example, google keeps their algorithms for assigning search rankings a closely guarded secret, and only periodically releases certain limited clarifications of the policy. This secrecy has the benefit of making it difficult for spammers to be able to manipulate their websites' rankings in google search results; thus, a lack of transparency provides a better service to people using google search. Another classic example of too much transparency being harmful would be in an intelligence agency. However, the question of how much secrecy is necessary or optimal is a tricky one, with no simple or clear answer.

Achieving Transparency:

Transparency can be achieved in a number of different ways. Transparency can be, to some degree, mandated by laws, such as reporting requirements on corporate accounting, campaign donations, or the structure of government entities and non-profit organizations. However, laws cannot force transparency when the individuals in organizations do not truly want to, as people can go to elaborate lengths to hide information or present false information.

Illegal means of achieving transparency:

Sometimes, the law may provide little in the way of legal avenues towards transparency, and may even protect secrecy, such as protecting government intelligence information, or trade secrets within corporations. In these scenarios, information leaks can be a means of achieving transparency in a way that violates the law. An example of an organization promoting this sort of approach to transparency is WikiLeaks.

Information overload as a barrier to transparency:

One major barrier to transparency is the sheer volume of information available in today's society, as well as the complexity of the information. Because our society moves so quickly, in order for an organization to truly be transparent, it is not sufficient for key information about the organization to be available, but rather, it is necessary that the information be easily accessible in a form that can be clearly interpreted.

Simplicity and Transparency:

Simplicity is one of the greatest ways to achieve or promote transparency, as it keeps information overload in check, and makes it easier and less costly to fully and clearly communicate the key information to the public. Some degree of simplicity can be seen as necessary in order to truly achieve transparency, as complexity alone can always provide some sort of barrier to true transparency.

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