We’ve been tweeting from 27th. Annual International Consortium on Governmental Financial Management (ICGFM) conference in Miami. You’ll find the chronological “storified” version of these tweets from each presentation posted on our storify site We’ve also summarized some of the themes from the conference.
Government open data advocates are shooting themselves in their collective feet. Skeptics suggest that there is little value in some, many or all open data initiatives. These pragmatists and curmudgeons demand to see the Return on Investment (ROI) calculation.
What do they get from open data advocates?
Anecdotes. Often the same anecdotes.
I had intended to review a recent study on open data. But, it’s just a bunch of attractive pictures with anecdotes. Some anecdotes stretch to an entire page and are presented as “case studies”.
A page does not a case study make.
I also got the impression that the information was stretched out to fill the page. Of course, with just enough information to determine that the conclusions are dubious.
Should it be surprising that governments in developing countries are adopting transparency measures? Many are surprised that developing country governments adopt transparency portals and open data mechanisms. Yet, we see great interest in leapfrog transparency among our customers. It has been a major theme for discussion in the last 5 FreeBalance International Steering Committee (FISC) conferences. There are important incentives. We hope to document some of these over the next few weeks, first by reaching out to experts on Twitter. Then through discussions with Public Financial Management (PFM) professionals attending FISC in Ottawa.
We’ll be collecting comments here. And, we’ve “storified” the tweet stream on the subject
GRP or Integrated Financial Management Information Systems (IFMIS) can be cornerstone to anti-corruption
Doug Hadden, VP Products
We were asked last week about how FreeBalance software contributes to reduced corruption in developing countries. There can be a significant effect on reducing corruption.
What is the linkage between “anti-corruption” and GRP?
Governments implement Government Resource Planning (GRP) or Integrated Financial Management Information Systems (IFMIS) to improve fiscal management and governance as part of Public Financial Management (PFM) reform
GRP has a significant effect on financial institution and investor corruption and is enabler for reducing corruption by executives. Based on the World Bank study in 2000 , GRP has a possible positive effect on more than half of attributable corruption in developing countries.
What are the corruption effects on public finances?
Decentralization: of functions to impede centralized corruption
Payments: eliminate cash payments through secure cheque printing and electronic funds transfer making financial transactions fully traceable and reducing cash fungibility including use of the Treasury Single Account to prevent manipulation
Reporting: knowledge that fraud patterns can be uncovered in reporting or audit changes the behaviour of politicians and public servants
Segregation: of duties for processes across many people reduces the ability of any one person to commit fraud
Countries with low perceived corruption enjoy higher human development
What forms of corruption are restricted through the use of GRP?
Accrual Accounting: prevents hiding arrears and assets that are possible in cash accounting
Briefly, exo means outside; exopolitics therefore, for our purpose, politics outside politics. Because politics outside politics is emerging as the core phenomenon of American culture. And on the scale at which we are experiencing it it is novel.
Phenomena like the tea party and occupy movement are exopolitics symptoms. Social media, open data and Government 2.0 enables exopolitcs, according to Cameron.
Observers like Evgeny Morozov see technology more as tools of repression than any kind of democratic enablement. And, Morozov questions any concept of technology determinism. Cameron is among the current thinkers like Jeff Jarvis and Clay Shirky who have a broader understanding of the effects of technology on society. (Of course, Harold Innis, Marshall McLuhan and Friedrich Kittler provide a much better perspective on technology and change covering centuries.)
Technology provides opportunities for organization outside traditional organizations. It’s no surprise that the traditional opposition in Egypt was a surprised as the regime with the Arab Spring. This technology doesn’t immediately have effects. It takes some time for the medium to become the message. So, traditional methods of political interaction will remain dominant while pressure for transparency mounts to a tipping point.
Representative Democracy and Demigods
Here’s where I differ with Cameron. Cameron suggests that representative democracy should remain the primary vehicle for change. He points to how direct democracy has failed such as the ballot system in California that limits fiscal options or the way in which Napoleon manipulated plebiscites. This is a pretty thin argument in my opinion. Why? There is always the tendency to think that traditional methods will be used in new eras.
It’s true that various methods of “Government 2.0″ outreach have resulted in support for marijuana legalization. We can’t expect traditional thinking to immediately change thanks to new technology. Look how long it has taken for the obsolete medium known as newspapers to finally see subscription reductions.
My view is that Government 2.0 will open up new “exopolitics” avenues – not so-called “direct democracy” but richer citizen to government interaction because:
Open data and social media will provide more evidence-based debates (eventually – maybe not in the current US Presidential election)
Social tools will enable interaction with citizens on important matters, particularly with expert networks at first rather than traditional crowdsourcing
Instant organization around important subjects will disintermediate traditional power structures such as lobbyists (but not immediately)
Effects will be seen more in local government where there is a more direct relationship with citizens
This will take some time. Governments will continue to struggle open data and culture change. Traditional media will continue to polarize citizens. And, representative democracy will be the main avenue for political change. But, these time are achangin’.
The American television network, NBC, has exclusive broadcast rights to the 2012 London games. Broadcast coverage by NBC has generated the twitter hash tag of #NBCfail. The use of social media, including twitter has generated an undercurrent of satire and ridicule for:
The problem for NBC as for other media is that it is trying to preserve old business models in a new reality. To experiment with alternatives when billions are at stake is risky. But so is not experimenting and not learning when millions of your viewers can complain about you on Twitter.
From Broadcast to Always On
What’s changed from, say 1996? There was tape delays during the 1996 Atlanta games, in the United States, for events like the Men’s 100 Meter Dash [see below].
Broadcast electronic media enables control. Control of the message. Control of the advertising revenue. But, there is limited control in cyber space which is always on. Where people in stadiums and those watching in other countries can post results.
NBC executives seem to think that American citizens need the context presented. As if Americans are not bright enough to understand what is going on (or find out through a search on the Internet.) This is an patronizing attitude by elites is described in full by John Ralston Saul.
Lessons for Governments
Public servants need to consider that they do not have all of the answers or the best answers. Governments can leverage citizen cognitive surplus.
Citizens view delays of information as indicative of incompetence or hiding something so transparency can increase citizen trust.
Governments cannot stop information flow to citizens, so it’s better to be proactive with open data rather than wait for access to information requests.
Governments will be satirized and ridiculed – as they have been for centuries, just on cyberspace. Get used to it. Adjust.
Transparency will reveal incompetence, corruption and inefficiencies. Embrace these to improve government effectiveness.
1996 100 Meter Dash
I watched the event on CBC. There was a lot of tension given the strong field. After watching the stress of false starts and the eventual win by Donovan Bailey, I flipped to the American channel (we can do that in Canada, although there doesn’t seem to be much reciprocity) to find that the network was setting up the event. Providing context. Here’s British commentary from the event. Wasn’t this enough tension? Isn’t it better than reality television?
Di Maio has been critical of enthusiasm in light of poor open data business cases of high costs with unproven returns.
I have to report that Di Maio was proven right at the Open Government Data Conference. Enthusiasm was high and open data business cases were primarily anecdotal. (I’ve curated tweets below on these subjects.) My sense based on the conference is that most of the four issues, with the exception of proven return, were addressed effectively:
Digital divide continues to narrow, there are emerging techniques from reaching the poor (i.e. visualization on walls) through intermediaries and costs for civil society to reach the poor is going down
Information complexity is being sorted out thanks to semantic technology and better user interface design
Costs can be sustainable through automation, cloud computing and lessons learned in scaling up open data
Is there an evidence-based business case for open data?
I moderated an “unconference” discussion about the open data business case for financial data. My thinking was that it’s best to narrow down the domain in order to get more concrete ideas. Some progress was made. We identified areas for financial open data (budget, procurement, revenue, human resources, audit, aid, grants and performance).
We developed a framework to describe direct effects such as open procurement leading to increased competition and reduced costs and indirect effects such as increased trust through open budgets that leads to more investment to build more economic activity that generates tax revenue. There really wasn’t enough time to build out a full framework – but that’s what we need to do. Then we can validate this framework through real cases and provide effective business cases.
Why do we need a business case framework?
Technology disrupts how organizations operate. The business case for previous technology is often inadequate to effectively measure long term costs or returns that were not available in the previous technology. An open data business case will address potential new effects such as:
Return on the network effect where each new data set can add value to a previous data set
Return in taxes and economic development through the notion of government as platform – in a measurable way
Reduction in costs by eliminating IT functions that are no longer necessary in the age of open data
Return from better government decision-making through crowdsourcing
Return from better personal decision-making through open health, weather and financial data
In particular: we need to be able to prove these suppositions.
According to the Brunswick Review, a transparency implication for government is:
“Citizen empowerment: New ways of communicating are shifting power from the ruling elites towards networks of organized citizens. The role of social media, mobile and Al Jazeera during the Arab Spring shows the power of media in the hands of those hungry for change.”
Transparency driving four principles of the open world
Tapscott sees the transparency push coming via the web fueled by demographic changes, the financial crisis and a social tsunami “perfect storm”. He observes that the printing press led to the end of the feudal system towards the industrial age. The Internet enables anyone to be a producer. Tapscott points out that this is not the “information age”, it’s the age of networked intelligence. The result:
Collaboration where social media becomes social production – what has been thought as leisure improves productivity and innovation
Transparency where institutional fitness is not longer optional because institutions are becoming “naked”
Sharing where information in the commons rather than holding “intellectual property” creates the most value and new business models are created
Empowerment were the distribution, decentralization and disaggregation becomes powerful
Implication to governments
Tapscott connects transparency and trust in business. This idea applies more in government where there is a trust deficit – some want smaller government, others want more accountability, many think that politicians are corrupt.
“I’ll give it to you in a sentence. Trust in business is the expectation that the other party will have integrity and transparency. The expression, “What are they hiding?” shows the relationship between transparency and trust.”
Transparency closes the trust deficit. The standard for openness in government will only increase. It’s inevitable.
Crowdsource or be crowdsourced. Governments need to collaborate with citizens to improve results. As Tapscott points out, the Arab Spring and Occupy movement shows us that social media drops the cost of dissent. Governments need to harness the wisdom of citizens to leverage “cognitive surplus” to improve public policy.
Democracy matures from “thin” democracy: elections to something more substantial where citizens and civil society are more empowered and influential. For example, citizen audit may become a civic duty.
Sustainable transparency doesn’t mean government business as usual plus transparency. The key mistake made by open data skeptics is that governments cannot afford the long-term costs for transparency. That’s only true if the government “business model” doesn’t change. As, I’ve pointed out before, there is a transparency value proposition.
Governments can innovate to cut costs and improve productivity through transparency. And, in the global economy, countries cannot fall behind in the transparency arms race. Businesses have choices. As I’ve pointed out before:
Developing countries are adopting processes and technology designed to increase citizen trust while leveraging citizen and civil society cognitive surplus to improve public policy. If the Arab Spring, Tea Party and the Occupy movement has taught governments anything it’s crowdsource to improve public policy – or be crowdsourced.
Auditing is expensive. Very expensive in developing countries. That’s why citizens, civil society and businesses are encouraged to help governments. For example, there is nothing better to uncover procurement fraud or poor procurement decisions than competitors.
As I’ve pointed out before, performance management in the public sector is more complex than in the private sector. Private sector organizations have a bottom line: profit. There are established measurements like market share, and return on assets. Output measurements like the number of customer complaints handled, and outcome measurements like customer satisfaction survey ratings are factors that influence financials – profitability. If all the KPIs are green and the company is not making a profit, than the indicators are likely incorrect.
There is no bottom line in government. Outputs and outcomes are the results. Financial – in this case, budgets, is the input. This makes it very difficult to determine whether the KPIs are correct. There could be false positives and false negatives.
Social media in government, or Government 2.0, can engage citizens and civil society to report on outputs or outcomes. For example, the Ushahidi platform is used to monitor elections, disaster response and corruption.
The next stage in citizen engagement is crowdsourcing through expert groups or the public. This shows promise when managed correctly. For example, an effort at the White House generated some unexpected ideas. The principle of using citizens to propose and vet solutions reduces the burden on governments and may generate ideas to solve important problems.
Participatory Budgeting to go virtual?
Participatory budgeting is a process originally developed in Brazil to engage citizens to improve budgets. Adoption of participatory budgeting has grown particularly at local government. My sense is that the immediacy of service delivery in local government can create a critical mass of participation. The use of neighbourhood and civil society meetings and government outreach may not be sustainable in large regional governments and many national governments.
There is some sensitivity in governments to crowdsource policy because policy is considered the purview of political wonks. There is a notion of budget confidentiality in Canada that may restrict the kind of openness enjoyed in developing countries.
Open Government Costs
Many argue that open government, social media, crowdsourcing etc. just costs money. I’ve summarized the business case for open government in a previous entry. A recent Transparency Camp Brainstorm identified the following benefit categories for open government:
Revenue, primarily in the form of increased tax collection through increased economic activity
Efficiency, effectiveness and productivity through reduced cost per unit of work including cost avoidance
Outcome improvements such as achieving higher levels of service delivery or improved health statistics
The resistance to social media and open data in developed nation governments contrasts to the attitudes from many developing countries. I find a greater acceptance of the value proposition of open government in countries like Timor-Leste, whose transparency portal is an amazing achievement, than in G8 countries. The commitments for the Open Government Partnership show that these countries are innovating beyond expectations. This could result in a more engaged population with a deeper form of democracy than we enjoy in Canada today.
As I’ve written before, social media will be transformational for Public Financial Management. The key driver in developing countries is the need to sustain reform. This doesn’t mean sustaining the PFM “status quo”. Or, tweaking processes. This means continuous modernization and reform. Catching up to developed countries. Leapfrogging developed countries. This effort requires citizen engagement.
Let’s hope that governments at all levels in Canada do not hold back and get leapfrogged.