Transparency as Precondition for Reforming Subsidies

Transparency as a foundation for reform

Transparency can influence reform in at least four ways (Hale, 2008):

1. by institutionalizing public discourse: the act of disclosure starts a dialogue between the discloser and

interested parties;

2. by compelling actors to tell the truth, making it difficult for discourse to be manipulated by one “loud,”

deceitful actor;

3. by cutting through the flood of information and often contradictory claims to focus attention on facts;

and

4. by promoting self-reflection within the organization or government, compelling actors to comply with

their own standards and norms.

In considering the extent to which improving transparency could assist reform, the key consideration appears

to be one of ensuring its relevance. For transparency to be useful, information users and providers must desire

disclosure of the information and see how such transparency can help meet their objectives.

Improved information about fossil-fuel subsidies, in particular, can help governments meet their reform

objectives. At the simplest level, information about the subsidy and its effects facilitates an assessment of its

costs and benefits and, therefore, of the implications of reform. Making this information publicly available

increases awareness of the effects of existing policies and allows public input to decision-making (Wolfe and

Helmer, 2007).

Many governments understand the economic, social and environmental problems created by subsidies, but

are under political pressure to maintain them. Transparency can expose those winners and losers created by

subsidies and therefore help to broaden support for reform (Victor, 2009).