1. Philip Keefer Economic Advisor Institutions for Development
Transparency and the million dollar question: Do facts change behavior?
Philip Keefer
Economic Advisor
Institutions for Development

2. The information problem
Our business: to lend money to governments to accelerate development.
Assumes: governments have the best interests of citizens at heart.
Makes sense if citizens replace the governments that don’t.
But what if citizens don’t know:
What governments can do?
What governments actually do?
Effects on their well-being?

3. Are citizens uninformed?
Information gaps are real
Colombia: parents don’t know what meals their kids should be getting from the Programa de Alimentación Escolar
Philippines: Households don’t know that municipalities have large pots of money to spend on local infrastructure
Denmark: half of voters do not know the unemployment rate
US: Half of 1990 survey respondents don’t know: who nominates federal judges nor which party favors more spending.
Lots of work examining decisions of uninformed people
Behavioral: what cues, whose opinions, how stable?
But what do INFORMED citizens do differently?

4. Transparency and Collective Action
Two assumptions behind information interventions
Citizens have incentives to collect, receive, process information about government
Governments work harder for informed citizens.
But why should any individual:
exert any effort to be informed?
exert any effort to change a malfeasant government?
Why exert private effort when benefits flow to everyone else? Let other people do it!
Example of the collective action dilemma:
Rational to vote for the politician who governs badly, but provides me with private benefits
Let everyone else vote against him (her)!
But if everyone thinks like this: we are all worse off.

5. So . . . When will transparency work?
Behavioral
If Citizens care about the issue,
or care about each other,
or feel guilty about putting themselves first,
they ignore their individual costs and benefits.
Evidence: yes . . .but not large groups; effects deteriorate over time.
Institutional
Organizations to solve collective action problems: parties, NGOs, etc.
Independent government agencies to respond to citizen complaints (Controlarías, Fiscales de la Nación)
Then, individual citizens CAN make a difference.

6. So what do we know about information?
Philippines: Information about the existence of government programs
Short run: increases vote buying!
Long run: Increases use of the programs, reduces corruption
Information about malfeasance of public officials
Brazil, Puerto Rico: Incumbents lose, education and corruption improve
Mexico: Reduces voter participation; no clear impact on incumbents.
Italy: Information about government competence and service delivery: incumbents do better
Denmark: Information changes beliefs when it´s more credible (comes from a central bank) than less (comes from a party).

7. Programa de Alimentación Escolar, Colombia
Problem: Significant corruption, many kids not getting any or the right meals.
Lots of media and government attention.
Convoluted procurement system and cumbersome contract oversight
Operator discipline: via possible criminal prosecution Only.
Govt: request: fix it but. . . no money, no legal change.
Text messages to parents: what food children should have received that day.
Audits
Nutrition majors from local university do light audits.
Kids’ meals? Storeroom supplies?

8. Both are transparency! Will citizens react?
Both provide salient information to parents that was previously unknown.
Reasons why these would NOT matter
Parents dispersed, operators are powerful
(Low) salience?
kids’ education one of many family problems;
school lunches just one of many school problems.
Costly to protest – even though each school has a school feeding committee.

9. Operators are connected . . . .

10. What about other actors?
Audits have no legal or contractual standing.
But strong Controlaría in Colombia!
They might also find the information useful
Reason to start an investigation
Some operators already investigated, jailed.
So what do we find?

11. Auditors active . . .but can’t audit everything

12. Significant improvement in compliance

13. Including the most expensive food type

14. Audits, not text messages responsible

15. Lessons - Behavioral
Don´t assume citizens will pay attention Or that if they do, they will react.
Think about behavioral angles
Interesting presentation (lower costs of information gathering)
Raise salience of issue (“your kids’ meals are important”).
Stories of success (“citizen action can succeed”)
Stories of reciprocity (“what citizens have done for each other”)
And KEY: stories showing that other citizens are informed, fed-up, ready to act (spontaneous action is posible).

16. Lessons - Institutional
Think about institutional angles
Which parties, independent agencies, NGOs might act on information, even if citizens in general do not?
Don´t assume they will
Plenty of clientelist or caudillistic parties, plenty of NGOs that are only contractors, plenty of fiscales that prefer the easy life.