Article by Mariano Mosquera at Edmond J. Safra Research Lab: “There has been an important development in the study of the right of access to public information and the so-called economics of information: by combining these two premises, it is possible to outline an economics theory of access to public information.
Moral Hazard
The legal development of the right of access to public information has been remarkable. Many international conventions, laws and national regulations have been passed on this matter. In this regard, access to information has consolidated within the framework of international human rights law.
The Inter-American Court of Human Rights was the first international court to acknowledge that access to information is a human right that is part of the right to freedom of speech. The Court recognized this right in two parts, as the individual right of any person to search for information and as a positive obligation of the state to ensure the individual’s right to receive the requested information.
This right and obligation can also be seen as the demand and supply of information.
The so-called economics of information has focused on the issue of information asymmetry between the principal and the agent. The principal (society) and the agent (state) enter into a contract.This contract is based on the idea that the agent’s specialization and professionalism (or the politician’s, according to Weber) enables him to attend to the principal’s affairs, such as public affairs in this case. This representation contract does not provide for a complete delegation,but rather it involves the principal’s commitment to monitoring the agent.
When we study corruption, it is important to note that monitoring aims to ensure that the agent adjusts its behavior to comply with the contract, in order to pursue public goals, and not to serve private interests. Stiglitz4 describes moral hazard as a situation arising from information asymmetry between the principal and the agent. The principal takes a risk when acting without comprehensive information about the agent’s actions. The moral hazard means that the handling of closed, privileged information by the agent could bring about negative consequences for the principal.
In this case, it is a risk related to corrupt practices, since a public official could use the state’s power and information to achieve private benefits, and not to resolve public issues in accordance with the principal-agent contract. This creates negative social consequences.
In this model, there are a number of safeguards against moral hazard, such as monitoring institutions (with members of the opposition) and rewards for efficient and effective administration,5 among others. Access to public information could also serve as an effective means of monitoring the agent, so that the agent adjusts its behavior to comply with the contract.
The Economic Principle of Public Information
According to this principal-agent model, public information should be defined as:
information whose social interpretation enables the state to act in the best interests of society. This definition is based on the idea of information for monitoring purposes and uses a systematic approach to feedback. This definition also implies that the state is not entirely effective at adjusting its behavior by itself.
Technically, as an economic principle of public information, public information is:
information whose interpretation by the principal is useful for the agent, so that the latter adjusts its behavior to comply with the principal-agent contract. It should be noted that this is very different from the legal definition of public information, such as “any information produced or held by the state.” This type of legal definition is focused only on supply, but not on demand.
In this principal-agent model, public information stems from two different rationales: the principal’s interpretation and the usefulness for the agent. The measure of the principal’s interpretation is the likelihood of being useful for the agent. The measure of usefulness for the agent is the likelihood of adjusting the principal-agent contract.
Another totally different situation is the development of institutions that ensure the application of this principle. For example, the channels of supplied, and demanded, information, and the channels of feedback, could be strengthened so that the social interpretation that is useful for the state actually reaches the public authorities that are able to adjust policies….”