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Transparency: What is the Best Approach?

Published on August 13, 2010

by Dicken Chaplin

We all like to know the truth, and we like to think that the more we know the better.  With the revelation of the internet over the last 15-20 years, access to information has never been easier.  But what crosses the line of TMI (too much information)?  One might say that perhaps in modern times nothing is “too much” to be posted on the web.  This ethos has paved the way for the generation of transparency.  Recently this idea has come under scrutiny the world over, especially with the new publications on the website WikiLeaks, featured in a recent New York Times article.

The web-based organization WikiLeaks endeavors to reveal “unethical behavior” by governments and corporations by disclosing “secret” documents to the public.  In recent weeks the website has posted tens of thousands of classified military field reports, an action which has sparked an intense debate about whether transparent information is a right that the public deserves, or whether it has a time and place. For me, another important question to raise is what is the best approach to achieving transparency?

MFTransparency, in some ways, has similar goals as those of WikiLeaks. Although MFTransparency is not publishing classified documents about military operations, it is trying to liberate information that is valuable to a range of industry stakeholders who currently lack access to it. Where WikiLeaks seeks to strengthen democracy by making information held by the government available to the public, MFTransparency seeks to strengthen the microfinance market for all stakeholders by making clear, comparable product pricing information available to all.

There is an important distinction to be made between the two, however, in terms of the types of transparency that MFTransparency and WikiLeaks are providing.  The difference lies in the methodology of the collection of information.  MFTransparency uses information and data that is voluntarily submitted to them by microfinance institutions, thus providing self-regulated transparency. Typically, the willingness to be transparent is already there but the knowledge and platform for doing so are not.  WikiLeaks, by contrast, provides externally imposed transparency by disclosing “secret” documents that have been “leaked,” and the publication of these documents is far from permitted. WikiLeaks seeks to empower the public by providing them with information they can use to challenge the government. MFTransparency seeks to empower all actors in the microfinance industry, giving them the information they need to make better decisions and facilitating the functioning of healthy competition.

So when is it appropriate to make information transparent? Externally imposed transparency certainly does have a place.  By disclosing classified documents it unquestionably reveals unethical behavior and corruption, and it can also enhance democracy.  For the microfinance industry, MFTransparency believes that self-regulated transparency is a better approach. Revealing information without consent is a negative approach that is sometimes necessary. Encouraging the voluntary contribution of information is a positive approach through which different groups can come together to build the industry they work in. MFTransparency believes that with broad industry buy-in, transparency is more likely to have a bigger, more lasting impact.

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