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transparency

A buzz word for the idea that the more information is disclosed about an economic activity the better. Many regulators, private lenders, politicians and economists reckoned that the Asian economic crisis of the late 1990s would not have been so severe, or even have happened, had Asian governments, banks and other companies made available more and better data about their financial condition. Likewise, the collapse of Enron provoked demands for greater transparency, to help improve corporate governance in the United States and other industrialized countries. Some economists reckon that transparency is one of the most effective methods of regulation. Rather than risk regulatory capture, why not simply maximize disclosure and leave it to the market to decide whether what the information reveals is acceptable?

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