In response to my “earlier post on the latest WikiLeaks developmen”:https://themonkeycage.org/2010/11/a_conversation_about_wikileaks.html, Monkey Cage reader and UCSD professor “Eddy Malesky”:http://irps.ucsd.edu/faculty/faculty-directory/edmund-malesky.htm sent me the following email:
bq. There is a great 2005 piece by Andrea Prat in the _American Economic Review_ (“ungated overview”:http://ideas.repec.org/a/aea/aecrev/v95y2005i3p862-877.html; “gated”:http://pubs.aeaweb.org/doi/pdfplus/10.1257/0002828054201297) about when transparency can be harmful for policy-making and governance. His bottom line is that transparency can be damaging when the agents understand the connection between behavior and outcomes better than the principal. In those cases, transparency will lead to conformist behavior on the part of the agent when information is revealed in the course of the policy-making process.
bq. In a “recent paper on legislative transparency”:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1642659, we saw some behavior that seems to fit the Pratt Model. I wonder if WikiLeaks will have the same impact on diplomats and ultimately undermine successful foreign policy.
One nice feature of the Pratt article is that it opens by illustrating how the question of transparency in principal-agent relations is common to both politics (states and citizens) and economics (corporations and share holders). This is in turn led me to wonder whether it is inevitable that we’ll eventually see some sort of WikiLeaks phenomenon surrounding economic data as well. As I mentioned previously, the leading of diplomatic cables has made it much less clear what it is WikiLeaks is trying to accomplish (other than demonstrate it can publish classified information), so I don’t think it is out of the realm of possibility that WikiLeaks itself could move towards publishing corporate data. But even if WikiLeaks itself doesn’t, I’m guessing some “Corporate WikiLeaks” type site is likely to come along as well.