Monday, October 10, 2005

given enough eyeballs, all corruption is shallow?

The other day I came across the topic of corruption in governmental and other not-for-profit organizations. And I started thinking, if there could be a neat way to get rid of these issues the same way that peer review can get rid of computer bugs, also known as Linus's law - given enough eyeballs, all bugs are shallow.

I figured out that one possible way to achieve this would be to make all accounting data publicly available on the internet - this would open the door for peer review. There is always a problem of incompatible data formats, but this could be overcome by defining some simple, possibly XML-based, data format. The progress in defining an XML-based EDI format could possibly contribute here.

The next question would most probably be: who would be motivated to do this peer-review? I can imagine several possible parties:
  • concerned citizens, in the case of governmental organizations
  • students, in all possible cases - the universities/colleges very often give assignments in the form of "case studies", this could be turned into "go and find some fraud" assignments
  • audit companies that are paid to do the audit - the audit results should also be published online so everyone can see for themselves that the audit was thorough
Also, sooner or later would some hacker with economics background write a tool to find the most obvious "fishy" spots.

But how should we kickstart this process? I bet no corrupt politican wants to have this kind of peer-review. That will be up to the non-corrupt officials to decide.

UPDATE: 7 years later (2012) and we have some progress on making this idea a reality (as part of OpenData movement, see also opendata.ee). Riigipilv.ee publishes all accounting data of Estonian municipal governments.

2 comments:

*uri said...

But how would it resolve corruption? Bribes usually don't appear in accounting journals anyway.

Neeme Praks said...

Well, it wouldn't solve the issue of bribes in the sense of giving cash in exchange for services, in case it is not visible from the books.

But it would somewhat solve the issue of any corruption that does show up in the books - large scale corruption.

And it could also help on the smaller scale - at least the criminals would have to work harded to cover their tracks. :-)