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Living in a Volatile World: The Case Against Open Government

by Andrea Di Maio  |  May 7, 2010  |  16 Comments

Recent events that have shaken stock exchanges throughout the world have not only shown how fragile the economic recovery is, but also proven that technology can help accelerate and amplify dangerous phenomena that lead to financial and possibly political instability.

  • A clerical mistake by a trader – who typed a “b” rather than an “m” while selling P&G shares – instantly made the Dow Jones take an all-time plunge, and creating about 15 minutes of panic in Wall Street and around the world.
  • Announcements by a rating firm, which have been later retracted, about the vulnerability of sovereign countries to excessive debt have impacted the markets and severely hit stocks in the financial services sector.
  • Last week information about the unemployment rate in Spain passing the 20% mark has been issues by the statistical institute before the government could put it in context to defuse ensuing excessive worries.

The first example is quite interesting: the consequences of interconnected systems that drive market behaviors with a degree of automation that far surpasses our ability to control them offer food for thought.

But it is the broader issue of the mass of information that is available to everybody that worries me most.

Let’s imagine that, in the current delicate situation, most governments had already implemented their open plans, achieving unprecedented levels of transparency. I would argue that people in Europe may look into the details (and severity) of their countries’ domestic and foreign debt, mash up data concerning economic growth, employment, consumption, demographic trends, and possibly conclude that the future is much bleaker than what politicians and central bankers officially say. How would those voices contribute to handling the situation, or rather make it worse?

The same may apply in case of an environmental threat, a public safety incident, or just in examining alleged corruption cases involving politicians. Would the wisdom of the crowd converge toward solutions that aim at the common good, or would it just boost uncertainty and fear, making the situation actually worse? Would it turn us into doctors and good Samaritans, or rather into judges or crooks?

What if the crowd were engaged in helping solve the problem of their defaulting country? Would they orderly collaborate to a solution or would the outcome still be riots and strikes? Would revealing lots of data about a nuclear power plant accident close to home make people more comfortable and not jump into their car and run away?

In a world that is much less certain and more volatile than ever before, also thanks to the quantity and speed of information, we may actually have more rather than less need for institutions to trust. Because, when the worse comes to the worse, we always turn to government for a job we don’t have, a surgery we cannot afford, an emergency that needs to be solved.

Open government is great, but it’s fraught with risks. All of us who work in the field have faith that benefits are much greater than risks. But there are risks. Keeping people in the dark is not what a democracy should do and it is not even an option today, as there is so much information available from multiple sources. It is a government responsibility to make sure its information is accurate but also that people who use that information – in whichever shape and form – do understand the context in which it is collected and created.

Anticipating how information will be used and policing possible misuses will soon become core competencies for open government. But also, sometimes being less rather than more open may not be such a bad thing.

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Category: web-20-in-government  

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Andrea Di Maio
Managing VP
19 years at Gartner
33 years IT industry

Andrea Di Maio is a managing vice president for public sector in Gartner Research, covering government and education. His personal research focus is on digital government strategies, open government, the business value of IT, smart cities, and the impact of technology on the future of government Read Full Bio


Thoughts on Living in a Volatile World: The Case Against Open Government


  1. Nick Pacella says:

    I agree and the thoughts are quite insightful but, in the end, who polices the police? We cannot be so naive anymore to think that most politicians (I didn’t say government) are looking out for all their constituents best interests and not just the heavy hitters.

  2. Max Claps says:

    Andrea, I think you make a great point here “It is a government responsibility to make sure its information is accurate but also that people who use that information – in whichever shape and form – do understand the context in which it is collected and created.” For example, all of the information about the economic situation (debt, deficit, growth… See More, inflation,…) is already available, even if one needs to navigate pdfs from 15 different sources. Making it more transparent, accurate and practical to use does not solve the problem, unless people can connect the dots and connecting the dots depends on education – in the broadest sense – and the government officials that are accountable for open government I doubt are the same that oversee education policies… it might be a bit too ambitious for an open government program

  3. Walter Neary says:

    Very thought-provoking post. One does have to put these sentiments in the cycle of democratic history though. Your question has less to do with open data and more about the nature of democracy. Somebody would have said the same thing once the ancient Greeks started sharing information in their marketplace debates. A Greek named DiMaious might have asked, \Will it really do any good to discuss the risks of war in public? Won’t it make people panic/less likely to go to war/more likely to go to war?\

    But he might have gone on to phrase a damn good question that challenges all of us involving in public policy: \Would the wisdom of the crowd converge toward solutions that aim at the common good, or would it just boost uncertainty and fear, making the situation actually worse?\

    The increasing availability of open data has its limits in terms of making the world a better place. People have always wanted to see what they think they know and what they expect. People have always acted in disbelief of consequences. Examples: How many people smoke despite a fairly sure connection between smoking and cancer? And if I believe all this stuff about nuclear plants is nonsense, I won’t evacuate or I’ll drag my feet – even if you put all the risk data in bronze and drop it on my lap.

    Open data will improve the odds that people will have ‘good’ information. Information: good. Ignorance: bad. Will the availability of open data improve decision-making? History replies.

  4. A year ago, I was in Vancouver, BC, where news stations were covering a story on earthquake risk for the \Cascadia\ area, which includes Seattle and Vancouver. Scientists were noticing trends along fault lines that suggested the area might be in for a large earthquake in the near future (the next couple of weeks). The public was advised to recheck their earthquake/emergency packs and have a plan for their households should an earthquake hit.

    I traveled home to Seattle, and I checked my emergency \go bag,\ made sure I had enough bottled water, and left it at that.

    But I was shocked that the story wasn’t ANYWHERE on Washington State media or government sites. The government, and the press in Washington, had decided they didn’t want to \panic the public\ so they didn’t share/report on valid scientific research to the public. –How arrogant and paternalistic, especially when citizens lives could be on the line. Lucky for them, the pressure on the fault lines dispersed and there wasn’t a massive quake.

    If there *had* been, Washington’s lack of transparency would’ve been called in to account, and citizens would’ve been furious with the lack of advance warning.

    My point is, worry over transparency, with the exception of national security, is arrogant, and perhaps a more dangerous option than obscuring public information. If government is really so concerned with the public’s reaction to public information, perhaps it should focus its efforts on education of the population, not information security.

  5. Bowen Moran says:

    I think your post is thought provoking, but you miss a key point. Open Government isn’t the problem with any of the scenarios you’ve prevented – the lack of coordination and communication that leads to the scenario is.

    Take your nuclear power plant example – if I live in downtown Chernobyl, open government isn’t going to want to make me move. The on-fire nuclear power plant however, should probably inspire a rapid departure. If I don’t have access to the plant’s safety record, or can’t find out if there’s a problem – like the plant is aflame- then not only am I in danger, but I have no idea I’m in trouble until I’m hastily evacuated without warning or drop dead. Being an ostrich doesn’t help.

    However, maybe I live in downtown Candu next to one of the safest nuclear reactors in the world. Having access to those safety records allows me to not run for the hills everytime I hear about Chernobyl. Open Government allows me to make smart decisions, free of hype, watch-this-next-piece-after-the-commercial-or-you-will-die-journalism, and goverment spin. In your examples, Open Government isn’t the problem, it’s actually the solution.

  6. Gerald David says:

    Andrea you do present a well reasoned contrarian view. Yes, the world is volatile but that is the way life is. Volatility may not manifest itself in the form of earthquakes and geopolitical upheavals, but it’s present in most of our lives every do in one form or another.

    If you are inferring that people cannot draw their own conclusions regarding a situation when you state “…people in Europe…possibly conclude that the future is much bleaker than what politicians and central bankers officially say.” Is only the “official” government word the correct answer? I don’t think so and I believe that barring classified information – real classified information – the more open the better.

    Not only can we handle the truth, how else do we hold our elected officials accountable if we don’t have a true picture of what’s going on? Isn’t that one of our duties as a citizen?

  7. Andrea,

    Of course there is the possibility that some information is best not released. But all the examples you mention are not examples of governments releasing information. I think your point is much too general to be useful. Yes, by definition, excessive openness is – well excessive.

    It’s only when you not only provide clear examples, but then work them through that you can enlighten us.

    You use this example.

    Let’s imagine that, in the current delicate situation, most governments had already implemented their open plans, achieving unprecedented levels of transparency. I would argue that people in Europe may look into the details (and severity) of their countries’ domestic and foreign debt, mash up data concerning economic growth, employment, consumption, demographic trends, and possibly conclude that the future is much bleaker than what politicians and central bankers officially say.

    But that’s what’s happening right now. Government won’t be able to suppress enough financial information to stop that kind of speculation and anxiety. That genie is well and truly out of the bottle. In the specific example you mention, in financial terms, greater transparency is almost always better than lack thereof. Greece would have been better off if its shonky off balance sheet funding had been better known earlier.

  8. […] network for government connecting nearly 30,000 federal, state and loc… 2 Tweets Living in a Volatile World: The Case Against Open Government 2 Tweets Gulf Coast oil spill map 2 Tweets Manor, Texas, […]

  9. Sanchezjb says:

    Andrea, contrary to earlier published reports, it has not been definitely established that “a clerical mistake by a trader – who typed a “b” rather than an “m” while selling P&G shares – instantly made the Dow Jones take an all-time plunge.”

    Your post implies that people’s actions will be based, for better or worse according to your premise, on the information that’s available from government. I submit to you that while that is correct, government information will not be the sole source for people’s actions. As you stated, “there is so much information available from multiple sources.”

    A classic example of this is what’s going on with the Gulf oil spill where people, using Web 2.0 technologies, are not only sharing community-sourced information but also communicating the impact of the BP oil spill on their environment. This is a significant change from the Exxon Valdez oil spill where people relied on government to provide information and communicate the impact of that incident.

    Government has a responsibility to provide information and context but it should also recognize that additional information and context is coming from other sources. This perspective should serve to provide an impetus for government to make sure that it’s information is timely and accurate. It can’t control the context but it can influence the context.

  10. I kind of knew that I would raise quite a few comments when I posted my cautionary statements about openness. All comments here are quite thoughtful and I agree with them al. As I said in my post, openness is great and obscurity is not even option (nor would it be a desirable one).
    This being said, I remain concerned with how many of us seem to understate the risks.

    @Walter. Indeed we should always learn from history. However the main difference with respect to ancient Greece (where I guess I’d been named DiMaios, as DiMaious sounded more Lain :), is that there was a single agorà where people where discussing issues. It was the equivalent of a town council brought closer to the people. What happens today is that we make up our minds on the basis of information that comes from multiple sources. Those who are better off among us will see this as an advantage, as they will be able to compare and contrast different views (pretty much like those who read more than one newspaper and do not just trust government-run TV news). Others, though, will happen to trust or react to information that is fueled by open data but is packaged by third parties who may have vested interests in influencing investment behaviors, real estate prices, market valuations, and so forth. All I am saying is that, as governments fuel transparency and innovation, they also have an obligation to anticipate, monitor and – where necessary – police irresponsible or criminal behaviors in using that data.

    @Sarah, great example, but nothing happened. How do you know that public safety agencies did not make an assessment of the trade off between probability of an event and the disruption which could be caused by alarming people? What if the decision about whether to evacuate were left to the crowd? Are you sure this would necessarily lead to less people getting hurt? Orson Wells taught us a great lesson about how people may react to inaccurate information.

    @Bowen – You assume that the average citizen would be able to interpret the safety records from a nuclear power station and make a balanced assessment of risks. I would argue that those open records are most likely to be accessed through intermediaries that mash those up with other information (such as safety records from similar plants in other parts of the country, or occurrence of certain types of cancer, and so forth). My contention is that the quality and trustworthiness of the “masher” have little to do with the actual openness and quality of the raw data.

    @Gerald @Nicholas As I said, I am not advocating obscurity, but – as Lawrence Lessig clearly pointed out in his article “Against Transparency”, people need the right context to assess information. If I pick the Greek situation, as Nicholas points out it would have been better to know earlier about Greece. Well, would it? Greece unexpectedly (at elast for me, who spent a few years in Brussels working on the final stages of the common currency) joined the euro, which was good for its own stability and growth at the time, as it was for other countries in the region. I am pretty sure that full openness on the balance sheets of several countries would have had nefarious impacts much earlier that today. Of course on hindsight I agree with you that we should have known earlier, but would have Greek and other European citizens be better off back in 1999 or 2001 not joining the euro, or would have those economies spiraled down as a consequence?

    @Sanchezjb – Thanks for reminding that non government information is becoming more relevant than government information. My point stands though: for this very reasons governments have a responsibility to monitor the possible misuse of their own open data as well as to keep an eye on how accurate this crowdsourced data is.

  11. […] earlier post on the downsides of open data has raised a number of interesting comments, all in defense of […]

  12. Sanchezjb says:

    We agree. The last statement in your response and my last two statements are in synch.

  13. Thanks Andrea,

    I don’t really follow your point about Greece. In most advanced countries governments don’t have major things to hide in terms of their basic accounts – how much they owe, what their expected revenues are etc. It’s pretty inconceivable to me that anyone could argue that this is even close to the kinds of situation that Lessig talked about where he talked about extreme openeness and what I’d call ‘the problem of factoids’ or things flying around that prejudice issues where people don’t have the context to judge.

    Of course obscurity and obscurantism can buy you a few months or years while you cook the books, but that’s a pretty bad argument for restricting achievable openness. Modern commerce no less than modern government finance is built from the ground up on transparency and where it isn’t disaster isn’t far away.

    The latest episode of the GFC illustrates the point perfectly. It’s true that there can be private advantage from constraining transparency in finance, but it’s very hard to find examples of social good being done. I can’t think of any. Can you?

  14. @Nicholas – As I said, I do agree with you about the importance of transparency. I guess you would agree that there are different degrees of transparency, since modern finance has shown pretty consistently over the last several years that there are always ways not to be transparent enough.
    My point about Greece concerns how accurate and transparent their information about debt was when they joined the euro: had they been a glassbox they wouldn’t be part of the euro and, presumably, their situation today would be far worse.

  15. Andrea, I’m having real difficulty with almost every step of your argument.
    1) I presume you are saying that Greece tricked its way into the Euro zone – ie greater transparency would have prevented it from joining, which it wanted to do. You seem to saying it is a good thing that it got in. If so then presumably you don’t mean that it was good for the Euro zone but that it was good for Greece.

    2) But I don’t know too many economists who think that it’s good for Greece. It was good in the short-term because it enabled Greeks to piggyback on Germany’s reputation for sound monetary management, so they got to borrow at unjustifiably cheap rates. But it turns out that the cost is huge pain all round. As explained in a piece by Krugman (link below), if Greece had a flexible exchange rate it’s likely what it’s suffering now would be a nasty recession rather than the horrible decade or so of deflation that seems indicated as a member of the Euro zone.

    http://krugman.blogs.nytimes.com/2010/04/30/why-isnt-britain-in-more-trouble/

  16. @Nicholas – I am not sure what the consequences of not joining the euro would have been. Would have Greece been able to keep funding its debt if that was denominated in dracmas? Or would a devaluation of the dracma against the euro make that problem far worse (and earlier)?
    I do agree there are in pain now, but still they can share the pain with eurozone countries, whereas if they were outside the euro I am not sure their partners would have agreed to bail them out.



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