The PoliSci Pod: Economic Transparency with James Hollyer

In this episode of the PoliSci Pod, Peer Advisors Aisha and Levi are joined by Professor James Hollyer to discuss his research on economic transparency and how it translates to today's political environment.

The PoliSci Pod is a podcast created, hosted, and edited by political science peer advisors. Tune into episodes for peer advisors' advice, department news and event information, special guests, and more! Join us to stay connected to and informed on all things political science.

Listen to this episode, "Economic Transparency with Professor James Hollyer," and subscribe to the PoliSci Pod on Spotify.

Episode Transcript

Aisha: Hello, everyone. My name is Aisha. I'm a senior in the political science advising office, and you're listening to the PoliSci Pod, the department's official podcast.

Levi: And my name is Levi. I am a sophomore in the political science advising office.

Aisha: Today we're joined by Professor James Hollyer, a professor of political science at the University of Minnesota and also the Director of Graduate Studies. His research focuses on transparency, corruption, democratization, and political institutions, with particular attention to how information and political incentives shape democratic stability.

Levi: Professor Hollyer, could you start by telling us a little bit about your academic journey?

James: I started studying transparency when I was a graduate student at New York University. Slightly, um, oddly, I was brought into the project specifically focusing on transparency by a co-author of mine. So I've been doing a lot of work on government accountability, information, particularly focusing on non-democratic governments. A co-author Peter Rosendorff and I were working on something related to human rights that was stemming out of a class paper that I had written for his class.

And he had this project that he was working on where it was — the idea was, oh, well, let's measure government transparency by the release of data to, um, international organizations. So there are these data sets that are put out by the World Bank, that collect data from national governments. And if the governments don't release the data to the bank, they just show up in these data sets as missing.

The idea is to like, rather than treating this as like a problem, that this may be actually something that's, you know, of interest, theoretically. Why might, you know, governments choose not to release this information?

So he and a colleague, Jim Vreeland, brought me into this project, and we sort of said, okay, well, let's take all of the data in the World Bank and in our initial attempt at this, let's see what fraction of these data end up being reported by a given country in a given year, and what, you know, isn't reported. Then, in the course of presenting that around, some folks said to us, that's a good idea, but too bad. Like, you know, some variables are a lot easier to collect than others. Too bad you can't sort of take that into account. To which I said, actually, you totally can.

We wrote an algorithm that's based — sort of similar for those of our students who have sort of seen the like DW Nominate scores from American politics, where it's like, do you vote on a bill or not vote against a bill? Same kind of algorithm, but applied to a very different use. Um, and we use that to sort of construct a measure of transparency for countries over time.

And then we had the idea — oh, this might actually be relevant for things like, you know, popular mobilization and the stability of governments. That ultimately translated to the stability of political regimes, and that then laid out the research agenda.

Aisha: Yeah, that's really interesting. So before we get into it, we kind of want to ask, you know, transparency is a term that gets used a lot in politics and policy discussions. Now, Professor Hollyer, when political scientists talk about transparency, what exactly do they mean?

James: Well, so that's something that like, depending on who you're talking to, can vary a little bit. So in general, sort of transparency is always going to refer to something about the disclosure of information by some organization to interested members of the public. 

Exactly what organization and what information is being transmitted varies depending on the particular use case and the particular author. So when my co-authors and I talk about transparency, we're interested in this relaying of information about sort of the functioning of the economy, well-being, and society that's collected primarily by national governments and making that available to the general public.

Other authors — so for instance, Daniel Berliner, who used to be a professor here back like in the early to mid 2010s, is now at the London School of Economics — he's collected information on the passage of Freedom of Information laws across different countries over time. So the ability of journalistic organizations to file requests for the government to release information that the government has, you know, not previously made available. My former advisor, David Stasavage, looked at transparency of central banks and was often sort of used as measures of transparency there are things like, do they release their minutes to the general public? And then some authors have even looked at things like the creation of C-SPAN within Congress as kind of a measure of transparency.

Levi: So understanding transparency in a lot of countries, the decision to release or withhold any information is really strategic. Why might governments choose to be transparent or not transparent about, like, economic conditions?

James: Well, so the main reason to be transparent is because it is demanded both by the public and by investors. That the public wants to know what its government is doing. They want to be able to make decisions based off of how the economy is performing. By the same token, the business community really wants to know how well different sectors are doing, like, you know, is this an investment that I'm planning for over the long run? Is it likely to pay off or is it not going to?

Sort of contrastingly, the main reason why you wouldn't want to relay information is because there's something that's damning about the information that you can release.

If you know that something is going badly, you may want to conceal it. Or if it's something where revelation of that information could have negative consequences down the line, like something that is classified, you may want to hide that. The tricky part for governments, particularly looking forward, is that they may want to release information when things are good and hide it when times are bad, but if they did that systematically, anytime that information was hidden, people could infer, like, hey, wait a second, things must be pretty bad. So they lock themselves in to a certain extent once they decide to make that information available. Their ability to all of a sudden cease disclosing is very limited.

Aisha: Kind of related to those political actors, in your research, how does transparency change the incentives that political leaders face? And also, what actually shifts here politically when more information becomes public?

James: Well, so when more information is available to the public, the government needs to become more aware that it can face implications for its actions. That in particular, we tend to focus in our work on the possibility of popular mobilization, and that as more information becomes available, it comes a lot easier for citizens to mobilize against their government. 

But we can see this in electoral terms, as well, right. That if a lot more information is available to the public, the public can vote against their political leaders if the leaders are taking actions that the public doesn't like. So having that sort of information available constrains the room of operation for leaders.

Levi: And maybe you've kind of, like, answered this a little bit, talking about popular mobilization, but your work looks a lot at how information affects the coordination among political actors, like citizens, elites, or opposition groups. And so, would you say that that's very similar to popular mobilization or is there something else that transparency helps coordinate?

James: Yeah, so the critical thing for um, for that kind of coordination — I'm sort of using popular mobilization as a synonym there. The critical thing that you need in order to mobilize is not only a knowledge that sort of I am dissatisfied with the government's performance, but I need to know that others are willing to turn out with me, as well.

This is particularly true in, like, non-democratic settings, where deciding to go out and engage in an anti-government protest — if it's a relatively small protest, it's relatively easy to round people up and ship them off to jail. On the other hand, if, you know, thousands or tens of thousands of people are turning out, the regime is faced with a real problem, um, both in that it's like hard to round up that many people, but also that the security forces may be unwilling to — if they see tons of their countrymen turning out, the security forces may be unwilling to actually engage in sort of police actions against them.

The critical thing that I need to know, then, is not only that I believe the government is doing badly, but I have to think that others believe that the government is doing badly, as well. And so, the useful aspect of transparency in that context is like, this is information that I know I can see, but I know that others are seeing it, too. And so that allows me to not only sort of update my understanding of how the government is doing, but update my beliefs about how like others think about how the government is doing that. So I can get a sense that, actually, there are a lot of people who are really angry out there.

Aisha: Yeah. And kind of related to that, as well, but within your research, are there any cases where transparency might actually create or perpetuate instability rather than creating or contributing to stability in a political system?

James: Yeah, so in general, in non-democratic regimes, higher levels of transparency are associated with more frequent popular mobilization in terms of more frequent protests, more frequent general strikes. This leads to a greater likelihood that the leaders are overthrown, specifically through mechanisms involving kind of people turning out on the streets or leading towards processes that edge towards democratization. And more transparent autocracies are more likely to transition to democracies than less transparent autocracies.

So within, for instance, the period of the Arab Spring, you saw more protests turning out in like relatively more transparent countries than in less transparent Arab countries. Now there's that sort of overdetermined because there are other features that vary across those countries, too, like the less transparent countries tend to be monarchies, as well, whereas the more transparent ones tended to be autocratic republics.

But sort of that's a pretty consistent pattern across countries and over time. It turns out that sort of being more transparent if you're a democracy tends to stabilize things. And so there is a gap which we, sort of thanks to both Kenny Loggins and Sterling Archer, referred to as the transparency danger zone: democracies tend to be more transparent that non-democracies. Transparent non-democracies, so relatively high-scoring non-democracies, tend to be unstable; relatively low-scoring democracies tend to be unstable. And so there's this middle region, which we call the transparency danger zone, where you see like a lot of regime instability kind of taking place.

Levi: That's really interesting.

Aisha: Yeah.

Levi: I guess, like, thinking more about today's political environment, like, when we think about advancements in technology and data access, especially because for transparency, I think now in many countries, you need access to technology. Do you think governments are becoming more transparent on account of data and technology, or are they finding new ways to instead control that information?

James: Yeah, so in terms of our measures, there's a pretty marked increase in transparency over the course of like the 1980s and 1990s that kind of levels off. In early versions of our index, it started to go down towards later in the period, but it turns out that's because countries are slow to release information to the bank. And we had given them a two-year gap to say, like, okay, well, if we downloaded the bank's data from this year, this should give us information through to two years ago. It turns out that's actually not enough time — they essentially continue updating for stuff that's still, like five years old.

But it looks like things, I think for the most part, have kind of leveled off. I think you sort of see movements sort of away from transparency and more towards top-down control, particularly in sort of prominent cases, like China, for instance. Xi Jinping has definitely clamped down on the release of information.

There is some evidence, um so, it's debated amongst scholars — of how much there's been a wave of democratic backsliding lately and whether that's sort of more kind of in the perceptions of people or whether that's translating more into solid things on the ground. But one of the most solid things that has happened is that you're seeing higher rates of imprisonment for journalists. So I think probably that's part of an overall package — that the information that is coming out from governments is, at best, not improving and at worst, you know, tending to go down.

Aisha: Yeah, that's really interesting, especially your mention of China and Xi Jinping. Looking more globally, as well, are there any countries or regimes where you think transparency reforms have had particularly interesting political effects?

James: Yeah, so I think the places that are sort of the most interesting, probably less regionally, but more country by country are places where you see really big changes. I think one of the most interesting examples was in the Soviet Union under Gorbachev, where you had the Glasnost and Perestroika reforms. The Glasnost was the transparency reform, where it was releasing more information about the functioning of the regime. And this second to be part of a strategy by Gorbachev to try and play the public off against more recalcitrant members of the Soviet elite that really wanted to keep those Brezhnev-era kind of top-down controls in place. So I think that's an interesting kind of trade-off. 

China is another interesting example. China and Vietnam are two of the countries that saw the largest increases in transparency sort of early in our sample during the 1980s. I don't think we have enough data during Xi Jinping's time, but there's some evidence of a revision sort of more lately.

And sort of examples — we don't have so many examples of transparency falling sharply, I think in part because of that lock-in effect I mentioned. Most of the examples where we see transparency falling sharply are instances where you see outbreaks of things like civil war. The largest decrease is Somalia after Siad Barre's regime collapses. An example of where we saw some reversion in transparency, sort of in spite of that lock-in effect, without kind of major regime change, was Argentina under the Kirchners. Their inflation data became so heavily manipulated and were basically, you know, straightforward lies that people stopped paying any attention to them. So this showed up as, um, a reduction in transparency scores in our data.

It was probably there, I think the link was less an attempt to fool the public than the fact that some of their bonds were officially linked to the official inflation rate and so they could, you know, manipulate the official inflation rate and thus change their payment on their bonds.

Aisha: Yeah, that's really interesting, you know, thinking of, I guess, you know, you're talking about these different regimes, maybe in history, maybe now, but thinking more of like, you know, they rise of populist movements just across the world, how do you see your research kind of incorporating that?

James: Yeah, that's an interesting question. We haven't tried doing anything terribly specific, sort of linking transparency to populist governments. Part of the tricky part there is there's no unified agreed-upon definition of what constitutes a populist government. This is sort of disputed in the literature, whether this kind of a property of particular leaders or political parties, you know, how easily is this changed and stuff like that.

I think there is a linkage insofar as we think that populism has a longer history. This finding that more transparent democracies are less likely to revert back to non-democratic forms of government probably suggests that high levels of transparency act as something of an insulation against populism. But I wouldn't necessarily go too far out on a limb on that.

Aisha: Yeah, absolutely. Well, kind of shifting gears now away from your research and a little bit more towards some lighthearted conversation. Yeah, we wanted to ask, Professor Hollyer, if you could design any course related to your interests, what would you want to teach?

James: Let's see, of courses that I'm not sort of already teaching — I would probably look to teach a course maybe on autocratic institutions and democratic reversals — would probably be one I'd interested in teaching.

Levi: And also, if you could just describe what are some of the most rewarding parts you think of being an academic that a lot of students might not always see or maybe that they don't always hear about.

James: Yeah, so I think probably amongst the most rewarding aspects of being an academic, the students probably do see things like the extent to which, like, you know, it's great to see your students succeed. I think that's sort of probably a shared experience between faculty and students.

Probably the experiences that students probably are less likely to see are more on the research side of things. To a certain extent, there's always some degree of satisfaction, like, whenever a piece comes out — it used to be that you would get physical copies of things, but that's no longer so much the case. I think, probably more than that, and this is something that I don't think too many people ever really see, is there are moments where you've been struggling with a problem for a while, and it's sort of why are X and Y related to each other? Or, how do I solve this particular problem? And there's sort of like the moment where it kind of clicks, and it's like, oh, okay, like, there's a solution, or maybe this thing that I viewed as a problem actually isn't a problem at all. Maybe that's actually the solution to something.

Those kinds of moments really feel like a jolt of success.

Aisha: That's great to hear. Well, that's all we had for today. Again, we do want to thank Professor Hollyer for taking the time to sit with us and go through our questions. Of course, we always encourage, uh, political science students, majors and minors alike, to check out our podcast. And if you are interested in being a quest or if you have someone in mind, feel free to shoot us an email and we'll take you into consideration. But yeah, again, Professor Hollyer, any final words?

James: Oh, no, just thanks so much, guys, and thanks for putting this together. This is, I think, a really great service to our students.

Aisha: Yeah, absolutely. Well, I'm your host, Aisha.

Levi: And I'm your host, Levi.

Aisha: Thank you.