The Information Market
It was pointed out earlier that information is part of the political market just as it is in the commercial market). Equal access to information is a necessary condition of optimality. A greater supply of relevant information to the actors in the policy decision process improves the quality of that decision from the public interest point of view. According to conventional welfare analysis, governments should intervene where they can alleviate market failure. This can be extended to the policy process including lobby groups. Information has significant merit good characteristics so that some degree of government intervention in its provision could constitute a welfare improvement where under-provision exists. if transaction costs vary for different groups then access is likely to be unequal.
While individual organisations would not like information on the adverse effects of measures from which they individually benefit to be disseminated, it may still be possible to obtain agreement to a general policy of information dissemination to improve transparency (Martin 1989, p.5). The provision of such information will to some degree increase the political cost of those forms of assistance which are preferred by lobby groups merely because their costs are not immediately evident. The establishment of an institution which acts to enhance the transparency of policies in operation, such as the Industry Commission in Australia, is one means of increasing the available information about the issues involved in a particular decision yet to be made by government. In New Zealand, the Official Information Act is a limited means of obtaining information held in the bureaucracy, but is not a substitute for full public discussion (and hence equality of access).
Government departments are large holders of information. They have a role to educate and inform the public of the issues involved. They can balance the power of different interest groups with the information they hold. However, they may also be influenced by industry associations that help to determine their policy viewpoint. Departments also have access to Ministers and indeed have to guide Ministers on many points of detail and law.
An independent transparency agency may increase the Supply of public information, but have little direct part in the decision process. The situation could develop where the independent agency is frustrated by the obscurities of government decision making. In fact, political decision makers still have to look at all the alternatives in front of them including re-election prospects, previous promises, unwritten rules and previous case law (written rules). There is still a role for public scrutiny of these decisions.
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