The Limits of Transparency

After the 1997-1998 Asian financial crisis, critics chalked up the catastrophe to a lack of transparency in the region's business practices. The concept has since then become the latest Holy Grail in global finance reform. Yet because of inherent power structures built into the concept, transparency is an unhealthy obsession, argues Jacqueline Best. Besides being an oversimplified solution, transparency has accumulated biased connotations. Critics of non-transparent economies tend to be based in the West, and place the onus of reform upon national governments of non-Western countries, ignoring the fact that the multinational private sector has had its own share of scams. Furthermore, advocates of transparency call for a universal movement towards a single model of economic function, which would squash out the diversity of the world's financial markets. The global economy is unpredictable, argues Best, and instead of looking for a slogan, those concerned with financial stability may do better increasing the flexibility and adaptability of the world's response mechanisms. – YaleGlobal