Why did transparency on farm subsidies fail?

Remember what the Queen and Nestlé have in common? They were both involved in a big public debate (at least in Germany) in 2009 on agricultural subsidies. And remember what sparked the big public debate? The publication of each individual recipient of farm subsidies in Europe! It showed that the Queen received about 700.000 US$ and Nestle nearly 2 million US$ in farm subsidies from European tax payers in 2009.

For me, the publication of this data was an eye-opener. From one day to the next every European citizen had gained access to critical information relating to 40% of the overall budget of the European Commission. The response in the media and in public discussions was immense. I remember thinking back in May 2009 “What would happen, if we could see exactly how aid money was spent around the globe? What if you and me could track the money flowing from the German ministry of development cooperation through the different implementing organisations and to communities or administrative bodies in partner countries?” Such a transparency would make a great difference in development cooperation is characterised by a lot of discretion, as Stephen Howes puts it in his great overview of the aid effectiveness debate. So obviously, I was thrilled to find out about the International Aid Transparency Initiative (IATI), that was trying to achieve just that.

But have you looked at European farm subsidies in 2010 and 2011? Unfortunately, the European High Court has ruled that the publication of individual names infringes on privacy rights, so now it is only possible to see subsidies going to companies. But even with the limited data available it seems that not much has changed since 2009. Farm subsidies paid by European tax payers are still not promoting sustainable agriculture, family farms or the development of rural communities, but large agro-industrial companies and extremely rich individuals.

So what happened? Did the transparency of farm subsidies and the subsequent public outcry not have any impact? Does this tell us something about the impact of transparency in general?

In the last weeks I have been trying to understand better the theory of change of aid transparency. What are our assumptions on how aid transparency works?  I think, the theory of change underlying much the discussions around aid transparency has six main elements. All of these elements need to be in place for aid transparency to make a real difference to aid effectiveness.

• Open Data: First of all, information has to be made available. It would be possible to distinguish between open publication formats as defined by the OKFN and less open formats. But for reasons of simplicity lets assume qualitative or quantitative data is being published in an open format.
• Accessible Data: In a second step this data has to be made accessible to a wider audience. Databases with long columns of structured data and APIs may be beautiful to programmers, but most of us need more accessible data presentations, contextualisations and visualisations to be able to use information published, e.g. about development cooperation. If an organisation, for example an NGO, wants to make data accessible it needs capacity, resources, time and an appropriate communication strategy that fits the intended audience.
• Access of Data: If people actually access such data once it is accessible depends on many different factors. The most important factor is probably interest – do people, NGOs, parliamentarians, journalists, etc. have a strong enough interest to access information about development cooperation? Interest in turn is largely dependent on an individuals' current social, economic and personal situation, on the relevance of aid projects to stakeholders, on the general socio-economic and political situation and on the resources (time, money, capacity) required to access data. So for example a citizen with health problems will have a strong interest in the service provision of health centres. A healthy person will still be interested in the service of health centres, but maybe less so. The interest of citizens in projects with rather abstract goals like protecting biodiversity is probably only limited. How much effort is needed to access data and whether the target group has the time and capacity to access information are other crucial factors.
• Feedback: A well designed website, a community meeting or repeated radio shows on development cooperation may reach a large audience of people passively taking in information. Only a fraction of this audience will be inclined and able to actively respond to this information. The threshold for stakeholders in development cooperation to provide feedback on transparent data is high. It requires a strong interest of stakeholders, capacity, time, resources and possibly networks. The more effort it requires to give feedback, the less feedback will probably be given. Consumers can react to information given on products easily by their purchase choice. Many service providers ask their customers to rate their service and few respond. Feedback on the allocation of farm subsidies would require a lot of effort and initiative. However, the provision of feedback is not sufficient to fix the feedback loop.
• Changed incentives of decision makers: Feedback also needs to be efficient – i.e. it needs to reach the appropriate authorities, for example project management and local government administrators and be taken into account by them. Imagine a project manager receiving a visit from civil society representatives who share their grievances about a project. This visit may lead to lasting and substantial change in the project. But it may also be without any effect whatsoever. The degree to which feedback changes the incentives for decision makers depends on many different factors: the overall system of incentives, the quality of the feedback, the credibility of the feedback, the type and scope of the problem addressed in the feedback and the personal exposure of decision makers. For example, in the expenses scandal of UK parliamentarians the degree of exposure of individual parliamentarians was very high and the degree of adjustments in the regulations probably minor. In the case of European farm subsidies nobody is personally responsible for the allocation of subsidies and the problem addressed is far from simple.

If the effects of aid transparency follow this theory of change up to this fifth element, the feedback loop is working. We have decision makers in donor agencies, in projects or at partner country level, who have an interest to change the way they make decisions. The priorities of these decision makers are changed. However, I suggest, that there is a second loop, which is probably even harder to establish than the feedback loop. I would call it the decision making loop.  

• Better aid: In this second loop the changed priorities of decision makers are confronted with a) project related constrains, b) with other interests and priorities within the aid agency or the government administration and c) with interests and priorities of other stakeholders. So in the decision making loops our decision makers with changed priorities enter three different negotiation arenas. In situations with strongly conflicting interests and diverse and powerful stakeholders feedback given to one decision maker is not likely to result in better aid. Feedback suggesting minor changes is more likely to have an impact, than feedback requiring major changes. If this theory of change is reflecting the reality, it is easy to see, how transparency and advocacy on farm subsidies is a much more arduous and long-term undertaking then transparency of UK parliamentarian expenses.

At this point it is quite easy to see how the transparency of farm subsidy allocation did not result in better agricultural policy. In European agriculture there are many different stakeholders, diverse national priorities and at times strong interest groups. Those lobbying for a different allocation of subsidies, for example the green movement, has not been strong enough to challenge the existing system.

Interestingly, it seems that transparency is not the only “change tool” that faces this tremendous challenge of the decision making loop. Until recently, the most common tool to improve aid effectiveness has been evaluation. Carol Weiss, the godmother of evaluation theory, has studied the influence of evaluations on policy making for several decades and came to very similar conclusions. Evaluations, she found, tend to have an impact on policy making, if their findings require small scale and uncontroversial changes (Weiss 1980, 1999, 2000). Too bad, that many issues in development cooperation are controversial, difficult and touch on conflictive interests. So should we stop lobbying for aid transparency? Is it just a new hype without real power to change the aid system? I don't think so, for two reasons.

First of all I think that the availability of open and accessible information in the public sector is a right, irrespective of its usefulness. Even if I cannot change the allocation of farm subsidies at the moment, I still feel it is my right to know who receives them, because I pay the taxes that make farm subsidies possible.

Secondly, the fact that the impact of transparency is dependent on many different factors does not mean that there is no impact. For the case of evaluations, Carol Weiss pointed out, that evaluations do have an impact on policy, but the impact is only visible in the longer term. Looking at the theory of change of transparency, it is obvious that transparency is not a magic want. But it is also obvious that transparency can play a substantial role in changing the incentives of decision makers.

While I see some similarities between transparency and evaluation as tools for change, I also think that transparency is different from evaluation in one very significant aspect. Evaluation is supposed to provide more information to some of the stakeholders in decision making processes. The input of information has no impact on the kind of stakeholders involved and their interests.

Transparency, however, combined with capacity, adds a new stakeholder to negotiating processes. If civil society stakeholders have access to information, resources and strong networks to enter the arena of negotiation, the system is changed. Only a fundamental change in the system can bring about fundamental change in the outcome. This is why I believe in aid transparency.