Transparency in a New Global Order: Unveiling Organizational Visions

Transparency in a New Global Order

Transparency in a New Global Order Unveiling Organizational Visions

Edited by

Christina Garsten Professor and Research Director, Department of Social Anthropology and Score (Stockholm Centre for Organizational Research), Stockholm University, Sweden

Monica Lindh de Montoya Associate Professor, Department of Social Anthropology, Stockholm University, Sweden

Edward Elgar Cheltenham, UK • Northampton, MA, USA

© Christina Garsten and Monica Lindh de Montoya, 2008 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited Glensanda House Montpellier Parade Cheltenham Glos GL50 1UA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA

A catalogue record for this book is available from the British Library Library of Congress Control Number: 2008926569

ISBN 978 1 84542 325 4 Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall

Contents List of figures and tables List of contributors Preface

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Introduction: examining the politics of transparency Christina Garsten and Monica Lindh de Montoya

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PART I TRANSPARENCY AND UTOPIA: VISIBILITY, TRUTH, FUTURE 1

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3

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Truth in 3D: displaying historical evidence at the United States Holocaust Memorial Museum Bodil Birkebæk Olesen

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Practices of transparency: exporting Swedish business culture to the Baltic states Anja Timm

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The social life of brands: on choosing values for visions (and divisions) Raoul Galli

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The naked corporation: visualization, veiling and the ethico-politics of organizational transparency Christina Garsten and Monica Lindh de Montoya

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PART II TRANSPARENCY AND REGULATION: NEGOTIATION, IDEALS, COMPROMISES 5

Economies through transparency Emiliano Grossman, Emilio Luque and Fabian Muniesa

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Transparency, democracy and the SEC: seventy years of securities market regulation Christopher Yenkey

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122

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Transparency at work: the production of indicators for EU employment policy Renita Thedvall

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‘. . . What gets measured gets managed!’ Sorting out ‘the social’ in socially responsible investing (SRI) 160 Anna Hasselström

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Transparency through labelling? Layers of visibility in environmental risk management Mikael Klintman and Magnus Boström

PART III

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11

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TRANSPARENCY AND THE PUBLIC: PARTICIPATION, EXCLUSION, AMBIVALENCE

Transparency and participation: partnership and hierarchies in British urban regeneration Simone Abram

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A traumatizing transparency exercise on mobile phones and health risks Linda Soneryd

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Promoting transparency, preventing war: neoliberalism, conflict preventionism and the new military 241 Mattias Viktorin

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Transparency as tool and weapon: the case of the Venezuelan presidential recall referendum Miguel Montoya

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In retrospect: the play of shadows Christina Garsten and Monica Lindh de Montoya

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Index

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Figures and tables FIGURES 5.1 5.2 9.1 11.1

The rise and rise of transparency A map of transparency Layers of transparency Facts, legitimacy and authenticity

101 104 180 227

TABLES 5.1 Transparency clusters 5.2 Transparency samples 5.3 A tentative classification of uses of transparency and means of representation

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102 103 113

Contributors Simone Abram is an anthropologist whose recent research has been on concepts, practices and relations of the local state in Britain and Norway. Publications include Rationalities of Planning (with Jonathan Murdoch, 2002), Anthropological Perspectives on Local Development (edited with Jacqueline Waldren, 1998) and the edited collection Science/Technology as Politics by Other Means, published by Focaal (2005). Bodil Birkebæk Olesen recently received her PhD in anthropology from Aarhus University in Denmark. Her PhD thesis, based on ethnographic fieldwork in Mali, France, and the USA, is entitled ‘Crafting selves, circulating images: engagement, transformation, and relationality in Malian Bògòlan cloth’. Having taught and conducted research at universities in the USA, Denmark, and the UK, she is now based at the Department of Anthropology at University College London. Her primary research interests are in art and material culture, museums, globalization, and economic anthropology. Magnus Boström is Associate Professor in sociology and is Senior Lecturer at Södertörn University College. Currently he is studying green political consumerism and rule-setting activities within the environmental field, including, for instance, eco-labelling of agricultural products, fisheries, forestry, and public procurement. He has published a number of articles and book chapters, and has edited a couple of books on related subjects. Among his recent publications is the book Eco-standards, Product Labelling and Green Consumerism, with Mikael Klintman (Palgrave, 2008). Raoul Galli is a PhD candidate at the Department of Social Anthropology at Stockholm University. His main research interests are in the relations between culture, power, and social inequality. He has published ‘Rapport från varumärkenas produktionsfält’ [‘Report from the field of brand production’], Kulturella Perspektiv, December 2005 (4). Christina Garsten is Professor and Chair at the Department of Social Anthropology (Stockholm University) and Research Director at Score (Stockholm University and Stockholm School of Economics). Her research interests are in the anthropology of organizations and markets, with current focus on emerging forms of regulation and accountability in the labour ix

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market and in transnational trade. What interests her especially are the varieties of cultural articulation at the interface of market and community, and organization and sociality. She has published on organizational culture, flexibilization of employment, and corporate social responsibility. Among her recent publications are Organizing Transnational Accountability, coedited with Magnus Boström (Edward Elgar, 2008). Emiliano Grossman is Senior Research Fellow at the Centre de Recherches Politiques de Sciences Po (CEVIPOF) and a lecturer in comparative politics and political economy of European integration at the Institut d’Etudes Politiques de Paris. He holds a PhD from Science Po Paris and an MPhil from the University of Cambridge. His current research focuses on interest groups, the political economy of financial integration, and the strategic analysis of political institutions. Anna Hasselström received her PhD in social anthropology at Stockholm University and has studied economic history and psychology. She is currently a researcher in the programmes ‘Fashioning markets: accountability and transparency in the global marketplace’ and ‘Social affairs: governance for a normative economy’ at the Department of Social Anthropology, Stockholm University and Score, Stockholm University and Stockholm School of Economics. Mikael Klintman is Associate Professor and Senior Lecturer at the Research Policy Institute, Lund University in Sweden, and he received his PhD in sociology in 2000. He focuses on the ideas and practices aimed at increasing citizen/consumer/user participation in directions defined as environmentally and ethically sound by governments, non-governmental organizations (NGOs), and companies. Between 2000 and 2002, he did his Wallenberg postdoctorate at the Department of Political Science at the Massacheusetts Institute of Technology (MIT) in Cambridge, Massachusetts, where he did cross-Atlantic comparisons in this research field. Mikael Klintman is currently conducting research on standardization, labelling and certification of ecological and ethical production and services at an international scale, within the sectors of organic and genetically modified (GM) food, electricity, mutual funds, cotton, tourism, medicines, and green chemistry. Monica Lindh de Montoya is Associate Professor in Social Anthropology at Stockholm University. Her interests include markets, entrepreneurship, and microfinance. She has carried out fieldwork in Sweden, Venezuela and in Bosnia-Herzegovina, contributed chapters to a number of books, and has also worked as a consultant in the field of international development for the United States Agency for International Development (USAID), the

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Consultative Group to Assist the Poor (CGAP), and the Swedish International Development Authority (SIDA). Recent publications include Market Matters: Exploring Cultural Processes in the Global Marketplace (co-edited with Christina Garsten, Palgrave Macmillan, 2004). Emilio Luque teaches sociology at the Distance Education University in Madrid. He received his PhD from Universidad Complutense de Madrid by being critical in his dissertation about the notion of social capital, which he found depoliticizing. His main current research deals with citizenship, its connection to the environment, and rural policy. He has published also on labour market policy, the knowledge economy and the sociology of architecture. Miguel Montoya is a researcher at the Department of Social Anthropology at Stockholm University, where he received his PhD. Previous research focused on forced migration due to the construction of a hyroelectric scheme in the Venezuelan Andes, and on colonization processes in the occupation of a forest reserve. Other interests include the the anthropology of emerging markets, development, frontiers and political processes. His current research concerns democracy, civil society, and social movements in Venezuela. Fabian Muniesa is a researcher at the Centre de Sociologie de l’Innovation and teaches economic sociology at the Ecole des Mines de Paris. He graduated in sociology at the Universidad Complutense de Madrid and worked as a researcher at France Telecom research and development (R&D), before completing his doctoral dissertation on the automation of financial markets in 2003. He joined the Department of Information Systems at the London School of Economics for a postdoctoral project and, in 2004, received an international research grant from the Ville de Paris. His current research interest include social studies of finance, economic experiments, and the anthropology of calculation. Linda Soneryd received her PhD in Sociology at Örebro University and is now Associate Professor based at Score (Stockholm Centre for Organizational Research), Sweden. Her research interests include public involvement, risk regulation, and experiments in deliberative inclusive processes. She is currently involved in studies on inclusive processes involving governmental authorities and stakeholders in three empirical fields: mobile phones, nuclear waste, and agricultural biotechnology. She has published articles in journals such as Science, Technology & Human Values and Public Understanding of Science. Renita Thedvall received her PhD in Social Anthropology at Stockholm University and is now Senior Research Fellow at Score, Stockholm Centre

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for Organizational Research at Stockholm University and Stockholm School of Economics. Her doctoral thesis focused on the European Union, the ‘Social Europe’, and the use of employment and social indicators to measure, audit, and compare member states to make them transparent. Recent publications include her dissertation ‘Eurocrats at work: negotiating transparency in postnational employment policy’ (Stockholm Studies in Social Anthropology, 58, 2006). Anja Timm is Senior Research Fellow in Education at Southampton University. She received her PhD from the London School of Economics based on her dissertation, ‘The production of ambition: the making of a Baltic business elite’, which was based on ethnographic fieldwork conducted in Latvia. Anja has taught and conducted research at a number of universities across the UK and abroad. Until recently, she co-ordinated a project on international students and academic writing which involved field research in China, India and Greece (whilst based at Lancaster University in the Department of Organization, Work and Technology). Her research interests include the anthropology of organizations, policy and the globalization of higher education. Mattias Viktorin received his BA in social anthropology from Stockholm University in 2001. He was a Fulbright visiting scholar at the University of California, Berkeley in 2006–2007, and is currently a PhD Candidate at the Department of Social Anthropology in Stockholm. His research centres on the changing role of the military. More specifically, he is interested in how security, humanitarianism, and ethics intersect in emergent forms of engagements with the world. His publications include ‘The new military: from national defence and warfighting to international intervention and peacekeeping’, Statsvetenskaplig Tidskrift, 107(3), 2005, pp. 157–75. Christopher Yenkey recently received his PhD in sociology from Cornell University. He is affiliated with the Center for the Study of Economy and Society, also at Cornell University, and his research focuses on economic sociology, especially the sociological mechanisms that form the foundations of market exchange. Christopher’s current research investigates the advent of market regulation as well as the diffusion of regulations across markets. He is also interested in the development of economic sociology as a discipline and has written on the intellectual roots of modern economic sociology in the USA, and is the editor of Accounts, the newsletter of the American Sociological Association’s (ASA’s) Section on Economic Sociology and the co-editor of the ASA’s Economic Sociology Course Materials Guide, Third Edition.

Preface Is this the transparent book? This was the question often raised by little Andreas, as he observed us working on the manuscript on the computer. Yes it is. In so far as it engages with what ‘transparency’ is and might be, in social and organizational life. There are many people, events and influences that have played a role in the writing of this book. The idea was born out of our research into the interplay of markets and cultures, and the role of free-floating keywords, such as ‘transparency’ and ‘accountability’ in fashioning globalizing markets. Several colleagues at the Department of Social Anthropology and Score, Stockholm University, have contributed in significant ways to drafting the ideas: most notably, Magnus Boström, Nils Brunsson, Raoul Galli, Anna Hasselström, Ulf Hannerz, Linda Soneryd, Renita Thedvall, and Mattias Viktorin. We tested the early set of ideas out at a conference in Copenhagen, arranged by the European Association of Social Anthropologists (EASA), already in 2002. The contributors to this session on ‘The Politics of Transparency’, Simone Abram, Bodil Birkebæk Olesen, Liselotte Hermes da Fonseca, Peter Phillimore, and Renita Thedvall, came up with ideas that inspired us to move on towards a book project. Later on, in 2004, we presented our work at the European Group for Organization Studies (EGOS) Conference in Ljubljana, where several colleagues, not least Tor Hernes, gave inspiring inputs. We are also grateful to the stimulating discussions with the participants at the Swedish Anthropological Association (SANT) conference in Stockholm in 2006, where we presented a draft of our introductory chapter. Also in 2006, we arranged a panel on ‘Transparency and the Global Market’ at the American Anthropological Association (AAA) Meetings in San Jose, California. The contributors to the panel, Joshua Berson, Jacques-Olivier Charron, Lilith Mahmud, Jean E. Maier, Linda Soneryd, Geneviève Teil, Renita Thedvall, Marc Ventresca and Holger Sommerfeldt, Mattias Viktorin, and Davida Wood, probably do not realize how important their perspectives were at this point. We are grateful for the valuable ideas and criticisms provided through discussions following lectures given at the Faculty of Social Sciences at the University of Oslo, in particular by Marianne Lien; at the Department of Social Anthropology at the University of St Andrews, not least by Roy xiii

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Dilley and Christina Toren, and at the Department of Social Anthropology at the University of Maynooth, by Lawrence Taylor, Jamie Saris, and Mark Maguire. We also have our esteemed contributors to thank for their patience with our editing. Their belief in ‘the transparent book’, and their willingness to work on redrafts and revisions, energized the writing process. Christina Garsten and Monica Lindh de Montoya Stockholm `

Introduction: examining the politics of transparency Christina Garsten and Monica Lindh de Montoya Transparency is a concept that has gained increasing currency and favour as an organizing principle and administrative goal in recent years. We note calls for greater transparency directed towards states, markets and corporations, in civil service, in local and national political processes, and in regard to large agglomerating institutions such as the European Union and the World Trade Organization. In a wide variety of situations the idea of transparency is held up as a panacea for the ills that a concentration of power can imply; a way in which citizens can attain a level of justice and control vis-à-vis institutions that affect their lives. We observe transparency in organizational policy, not least in relation to discussions of democracy and electoral procedures. It is invoked in fights against corruption and bribery, and in efforts to promote ‘good governance’. In the financial world, transparency is closely linked to pressures for more open and just accounting and auditing procedures. Transparency is also invoked more generally by protective state agencies as a set of technologies that promise to render life safer for ordinary people by close monitoring of risky elements, human and other. We observe transparency not only in organizations, but also more widely in our changing material world – in architecture, design and fashion. Clothing becomes more and more revealing, transparent social life ‘on exhibit’ is celebrated in endless reality shows and revealing documentaries are praised – subtlety and fiction take a back seat to ‘what’s really happening’. The call for transparency intensifies at a time when the modern nationstate is faced with the challenge of governing financial flows of capital, cultural influences and organizational impacts. Transparency runs alongside attempts to organize and control beyond local and cultural particularities. It suggests that visibility, information and openness are closely linked with organizing, and that what is visible can also be represented, objectified, measured and compared. One of the prerogatives of late capitalism, it seems, is making the world hospitable for translocal, universal forms of administration and governance and this entails making the world legible and transparent. As James C. Scott (1998) has shown for the development 1

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of the modern state, a central project from the outset was to make society more ‘legible’. Legibility, Scott argues, was part and parcel of the postEnlightenment process of ‘the administrative ordering of nature and society’ and the story of the inexorable growth of state power (Scott, 1998, p. 83). That citizens, communities, corporations could be read, distinguished, seen, indeed made transparent, was central for the making of the modern state. It would seem that this is even more central today, with global governance being one of the daunting challenges on the political agenda. In a recent significant volume edited by Hood and Heald (2007), the widespread nostrum of ‘good governance’ is placed under critical scrutiny, as they trace out the history of transparency and related doctrines in government and public policy. ‘Like many other notions of a quasi-religious nature, transparency is more often preached than practiced, more often invoked than defined, and indeed might ironically be said to be mystic in essence, at least to some extent’, it is argued (Hood, 2007, p. 1). Yet, the doctrine of transparency has been put forward as a means to make the state and its inhabitants more ‘knowable’ and ‘governable’, a process that involves some tricky trade-offs and balancing acts. Transparency, then, is an entry-point to the understanding of contemporary society and culture and the power-games that are played out in attempting to organize it. Yet few attempts have been made to examine the actual content and playing-out of transparency, such as, for example, the complex negotiations through which it is determined what shall be displayed and what shall remain hidden, how power and control enter into the practices of transparency and the processes through which transparency is (or is not) achieved. How is the concept interpreted, practised, emulated, inverted or used to achieve particular ends? This volume explores the ideas and practices of transparency in different social and organizational contexts, with the hope of instigating a discussion of the strengths, limitations, ambiguities and many facets of the term. We aim to shed light on this powerful global discourse and the practices around the concept of transparency by opening up the concept for illumination from a broad, anthropological perspective. In this, we hope to contribute to an understanding of the wider organizational, cultural and ideational context in which transparency is used and put to work. It will allow us to assess in what respects and to what extent the global discourse, as well as the practice, of transparency is actually transforming business and governmental practices, social relations and ways of thinking about these. Moreover, we wish to point to ways in which notions of transparency are involved in efforts to fashion, govern and control the whereabouts of people, and ways in which people circumvent them. In our view, transparency is part and parcel of a nexus of associated ideas that together make up the new,

Introduction

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globalized market rationality in contemporary society. It is suggestive of the challenges of organizing society in a period of intense globalization of capital and culture. More specifically, we suggest, transparency is closely linked to a neoliberal ethos of governance that promotes individualism, entrepreneurship, voluntary forms of regulation and formalized types of accountability. It is powerful in that it is inscribed in political, financial and cultural documents, processes and policies that not only suggest, but push for, a certain normative order. Most of the chapters in the volume discuss ethnographic cases and are tightly focused on illuminating processes aimed at achieving transparency. They cover several sectors, including corporate visions, European policymaking, the new military, financial markets, education and architecture. Together, they provide a diversity of ethnographic material and a wide scope of analysis. Our ambition throughout has been to reveal the connection between the global discourse and local practices of transparency and to contribute to the discussion of the concepts, models and metaphors that guide and shape organizational, social and aesthetical practices today. We believe the volume’s primary interest lies in the empirical richness of local case studies and the way in which these are related to wider policy aims, ideological shifts and the discursive dynamics of influential organizations.

VISIBILITY, OPENNESS – AND A ‘CULTURE OF MISTRUST’ Much of the potential and power of the idea of transparency in organizational life is related to its power as a mechanism for visibility and revelation. So much in human life is charged with the energy that feeds off the tension between the known and the unknown, and is communicated to us though unquestioned practices that are deeply embedded in our social lives. From our earliest years we are taught about concealment, we are taught to clothe ourselves, play peek-a-boo and then hide and seek. We are taught that we must tell the truth, but discover that social fibs are both tolerated and necessary. As we grow older we gradually learn what information is best withheld from parents, teachers, employers, friends. We form groups, we learn the importance of revealing and withholding information for belonging and for drawing boundaries of inclusion and exclusion. We learn to present ourselves, devising self-images that are a compromise of what we think we are, and what we would like to be. Some things are kept as skeletons in the cupboard, as it were. In order to remain viable social beings, we need to provide a reasonable degree of transparency to those around us, an

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accounting of who and what we are; and we do so through, for example, curricula vitae (CVs) and resumés, work histories and the life histories we tell friends and acquaintances. Our friends and associates also help us do the job, through the mechanisms of anecdote and gossip. Transparency implies visibility, openness and communication. It is a metaphorical extension of its meaning in the physical sciences: a ‘transparent’ object is one that can be seen through. ‘Seeing through’, however, is always a matter of position and of degree. Quoting Bauman (1998, p. 29), ‘[w]hat is easily legible and transparent for some, can be dark and opaque for others’. And herein lies the power of transparency as an organizational vision; it can be played with, negotiated and temporarily agreed upon. Vision, seeing and seeing through, as Heidegger would have put it, is a way of engaging with the world. And as such, transparency may in our reading be understood as ‘a gaze’ moved by a particular ‘circumspective concern’ (Heidegger, 1982, p. 176). In a much related manner of thinking, David Michael Levin in his intriguing volume The Opening of Vision (1988) has traced certain aspects of contemporary Western society and culture to our concrete historical experience with vision. From discussions of egocentric vision in everyday life, the world-view of science, the political economy of modern technology and the paradigm of vision in metaphysics, he draws on the Frankfurt School and Foucault to demonstrate that many of the sufferings, the needs and the injustices of our world are connected to vision, to particular ways of seeing and the patriarchal will to power.1 Transparency is about visibility, about the flow of information in the numerous relationships established between citizens, the citizen and the state, the citizen and the economy in which he or she makes a living. Transparency has often been linked to totalitarian regimes, implying monitoring and control by way of repressive technologies.2 In its present version, it is instead tightly interlinked with the practice of democracy and with neoliberalism, and with a cluster of ideas that have gained increased currency since the beginning of the 1990s and the end of the Cold War, that point towards a certain way of organizing society that emphasizes the individual as the basic constitutive active agent in the construction of his or her fate and of societyat-large. In such a vision of social life, the transactions between citizens and the state and within the economy must be open and observable in the interests of maintaining a level playing field for all concerned. In processes of globalization of markets, tightened economic competition and a fragmented political authority, such ideas gain increased momentum. Thus the calls for transparency grow and spread across the globe. What is notable (in each system of power that has taken transparency on board, we may add) is, in Zygmunt Bauman’s words (1998, p. 33), ‘the positing of transparency and legibility as a goal to be politically pursued – a task; something which still

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needs to be enforced on recalcitrant reality, having first been carefully designed with the help of specialists’ expertise’. Information is the crucial component of transparency processes. Governments and their institutions must provide reliable information in order to be considered transparent in their intentions, their policies and in the implementation of these. Publicly disseminated audits of performance support policies and serve as a measure of how well intentions are put into practice. Through consultation with different stakeholders, government institutions and non-governmental organizations (NGOs) can also involve the public, benefiting from their time and input, and providing greater visibility into public processes (Strathern, 2005). The economic sector is equally subject to demands for transparency. Private or publicly held companies are examined for their economic practices regarding labour, accounting, information to shareholders, their economic worth. Their goods and services are examined for safety and for adherence to various standards which are not uncommonly the product of so-called ‘soft law’, or voluntary regulations. Many goods bear a series of labels indicating compliance with both national and international regulations. Keywords associated with transparency, then, are stakeholders, policy, audit, visibility, accountability, compliance, regulation, governance. Others that might be added are equality, fairness, individuality, responsibility, integrity. Transparency is appearing in a number of other likely and unlikely areas of our lives. One is in the sphere of the workplace, with glass buildings, open-plan offices and various fora for communication in the workplace. Increasingly, companies and business schools are adopting software solutions that openly reveal each individual employee’s calendar and whereabouts. At universities, we are being drawn into procedural exercises aimed at making visible, and scrutinizing our ‘outputs’ in terms of international publications in high-ranking journals and number of students passed, as well as formalizing and making our policies and administrative routines auditable. The European Bologna educational reform focuses on implementing transparent, comparable educational systems within the European Union (EU) member states, and courses are designed to be transparent regarding content, goals and examination criteria, allowing students to better evaluate what they sign up for and holding teachers accountable (cf. Strathern, 2000). Homes also are becoming more open, with social areas integrated with the kitchen where the family spends much of its time, as are products – see-through watches and appliances, storage boxes and closets. Another arena is between the individual and society, with exhortations to ‘be yourself’ and show your ‘own style’, in short to perform one’s personality – and consumption is also to an increasing degree becoming a way of manifesting a political persona, through the choice of particular goods and

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services, and not others. Relationships between people should also be open and visible; there should be no deception between friends and colleagues, no lies between couples. The concept of transparency can thus be seen to be embedded in a particular view of the capacities and possibilities of the individual and society that have wider repercussions in cultural life. These developments also show that transparency is a relational thing, to do with communication, and it involves a specific relation between the one who is seeing and the one who is being seen. Despite the apparent urge towards openness and disclosure, all is not so simple. Human life, the daily life of individuals as well as the public life of governments, companies and organizations, is full of secrets and ambiguities, of that which can be said and that which cannot. Governments and institutions darken certain problematic issues to keep a tight hold on power and to hide deficiencies; companies find ever-changing ways to evade controls and responsibilities – the Enron and Tyco scandals occurred despite the strict controls exercised over companies even then. Revelation is always incomplete; and is open to all manner of interpretation and negotiation. The prerogative of power is a force to be reckoned with. Despite all the ‘mutual veil-dropping’ that has occurred since the end of the Cold War era, from the perspective of the less privileged, of those lacking access to information, the operation of power often appears opaque and unpredictable (see West and Sanders, 2003, for an important contribution on the relation of transparency to conspiracy, suspicion and power in contemporary globality). Several scholars have noted that transparency is linked to games of power and control. Ever since (and quite probably also before) Jeremy Bentham’s Panopticon appeared in 1791, the all-seeing eye has been brought into discussions on the nature of power and ways of exercising control.3 Bentham’s basic idea was that, through careful architectural design, the whereabouts of every single prisoner in the new prison could be constantly observed by the prison guards. The design would allow the observer to observe without the prisoners being aware of it, thus creating a ‘sentiment of an invisible omniscience’. The awareness of being seen would also contribute to a self-disciplining on the part of prisoners. The idea was that this model was to be widely used, in schools, hospitals and factories, where people needed to be managed and to some extent controlled. The self-disciplining implications of constantly being seen would allow for an efficient and cost-effective system of control. This utopian, rational vision of the mouldable human being and the transparent society was never a great success in practice, but the ideas were picked up by early management theorists, planners and policy-makers, as well as academic scholars. The idea of the panopticon is most widely known through the work of Michel Foucault (in particular Discipline and Punish, 1977), who viewed

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panopticon as a political technology in the abstract, with wide applicability and far-reaching consequences.4 The idea was central in his discussions of modern disciplinary societies and tendencies for close observation and normalization. The logic was one of surveillance, enshrined in institutions such as the factory, the hospital inspection, the school examination and the military review (Graeber, 2001, p. 95). Interestingly, with regard to ‘vision’, while power in the feudal system was ‘what was seen’, by way of visual representations in cathedrals, palaces and in the material body of the king (Foucault, 1977, p. 187), power has now assumed a faceless character, ‘exercised by faceless, invisible bureaucracies that inspect, examine, and evaluate their objects’ (Graeber, 2001, p. 95). The notions of panopticon and of transparency are here intricately linked with new forms of disciplinary power and control, involving a process of universally applicable administrative technologies and of disciplining the self. In a foucauldian reading, transparency is thus vital to neoliberal ‘governmentality’, that is, forms of control in which power is decentred and in which individuals play an active role in their own self-government, and to the games of power that are being played out in contemporary society. In relation to ‘audit society’, or ‘audit culture’, transparency signifies that we are living in a ‘culture of mistrust’. As pointed out by Michael Power (1997), audit is itself a ‘technology of mistrust’, designed in the hope of restoring trust in organizations and professionals. Transparency, as well as accountability, here becomes a symbol of organizational trust and health (see Rose, 1999, pp. 154–5). The more we see, the more we know, it would seem, and the more we can place our trust in the expertise and professionalism of organizations. The more ‘evidence’ we can gather of what goes on, the more of factual verification we can get hold of, the more forcefully we can argue our case. Yet, one may wonder whether such measures do not in fact serve to amplify a sense of insecurity and mistrust, rather than to ease uncertainty and restore trust. There is no obvious end to the call for more transparency. The eye of power also follows us through measures of monitoring and of surveillance. We need only think about the many technologies used to monitor our daily actions to realize the extent to which some sort of surveillance is being exercised on our orbits: surveillance cameras in the streets, performance evaluation schemes, medical screening, airport security screening and the like. A telling example is London’s ‘ring of steel’, the security and surveillance cordon of closed-circuit television (CCTV) cameras and other technological devices surrounding the city, installed to deter potential terrorists and others who threaten law and order. And, we may recall the enhanced screening procedures at international airports, with ever more sophisticated means of making us and our belongings transparent (not to mention making travelling more troublesome and time-consuming).

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Scholars like Gilles Deleuze have taken Foucault’s argument on ‘disciplinary society’ further, suggesting that a new diagram of control has taken place, in which the control of conduct is now immanent to all the places in which actors move about, inscribed in the very dynamics of social practices (Deleuze, 1995). ‘Control society’ entails a continual monitoring and reshaping in all networks of practice, not just surveillance of individuals in particular sites. It means a never-ending process of modulation of the capacities and practices of the human being. We are always on continuous training, lifelong learning, perpetual assessment, continual incitement to buy, to improve ourselves, and continuously monitoring our health, and engaged in continuous risk-management (or, at least we ought to be). Monitoring technologies seem to be all over the place, invading our everyday lives. In Rose’s words, ‘Control is not centralized but dispersed; it flows through a network of open circuits that are rhizomatic and not hierarchical’ (Rose, 1999, p. 234). Evidently, the pursuit of transparency involves as well a reliance on knowledge, science and expertise. The visibility of ‘facts’, the legibility of social life and the measurability of organizational performance rely on the mediation of experts. According to a number of scholars, most notably Anthony Giddens (1990), expert systems of knowledge and of trustworthiness are intrinsic to late modernity. This requires open and reflexive relations between expert systems, their representatives and lay people. Central in these encounters are ‘access points’ that are able to generate a degree of assurance (as in the case of the air stewardess) and a ‘business as usual mentality’ in circumstances where there is risk. These access points, while reembedding the distantiated character of social life, characteristically draw upon a non-transparent expert knowledge base where various information is withheld from public inspection. Trust is necessitated by ignorance or lack of a transparency into complex and abstract technological systems. The pursuit of transparency as an organizational vision thus leans heavily on the access points between experts and lay people, and on how transparency is negotiated at these very intersections. As careful observers of social interaction, anthropologists and sociologists are well placed to document and deconstruct the production of transparency. The matter of what constitutes transparency is a subject of negotiation: between individuals, within organizations, between organizations and the state, organizations and the public. By nature an unfinished process, it is always tentative and ongoing. As the chapters in this volume testify, there is no formula; what is and what is not sufficiently transparent is situational, a result of what is demanded and what can be offered. What should be noted is that the production of transparency involves costs, in time and patience and in compromises, as well as concrete material costs. It also demands a public able to consume it – an educated, interested

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and involved public that can evaluate what is offered and enter into the negotiations.

TRANSPARENCY AND UTOPIA: VISIBILITY, TRUTH, FUTURE If transparency is a vision for the future, what are its characteristics? How is it played out in different versions of contemporary society? The chapters in Part I point out that achieving transparency is a complicated endeavour. What is presented is always a subject of interpretation, be it by those who create it or those who consume it. Moreover, it is a subject of negotiation and of contestation, involving continuous games of definition. Olesen’s chapter (Chapter 1) focuses on a central problem in the concept of transparency. Departing from Roland Barthes’s (1967) ‘transparency effect’, Olesen notes that facts do not exist as such before there is a narrative framework to establish their significance – facts take on meaning only in the context of narratives. Anything that has happened, then, has necessarily happened from the communicator’s point of view, and ‘facts’ only exist as linguistic artefacts. The anonymous, impersonal style of conventional historical discourse hides narrative, however, creating the illusion that historiographical representations appear to be simple copies of a ‘real’ existence. As Barthes indicates, the representational genres developed in Western civilization such as news items, documentary literature, historical museums, diaries, realistic novels and especially the spread of photography hide the nature of the relationship between past reality and its representation, making ‘the transparency effect’ a basic characteristic of our societies. Here, then, is a basic characteristic of transparency: although it intends to reveal, it can only produce situated revelations, and will only tell one of many ‘stories’. In her discussion of the United States Holocaust Memorial Museum, Olesen describes the interior of the museum, indicating that much of the representation of the Holocaust depends on artefacts closely tied to this ‘transparency effect’ – reproductions, such as photographs enlarged to life size, and photographs of prisoners including their life stories (very palpable narratives) as well as actual objects from the concentration camps themselves, such as old shoes and an entry portal. It is the sometimes intense controversy over the history of the Holocaust that has made the designers of the museum embrace the strategy of presenting only ‘facts’ – representations of people and places, as well as actual objects – and letting them speak for themselves. But even in this setting forth of history, Olesen notes, conflicts and debates are submerged; and in ‘sticking only to the facts’ the museum faces other limitations. For example, the problems involved in

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Transparency in a new global order

using the available facts to establish a definite historical interpretation are not presented or discussed, diminishing understanding of the complexities of history. The lack of such discussions also highlight the strength of ‘the transparency effect’ that the museum produces. Timm’s contribution to this volume (Chapter 2) discusses transparency not as a production, but as a practical enactment within another, quite different structure – a Swedish business school that was set up and financed by Sweden to support the Baltic states’ transition from the Soviet era economy to the capitalist free market. The main aim of the school is to teach the ideals and practices of Western economies to high-achieving students who will make up the next generation of business people in the Baltic region. Timm sees the school as imparting a particular kind of moral force to its students, and examines the ways in which this force is concretely manifested. Transparency and openness are integral concepts throughout students’ education in the school; visible in everything from the building itself to the admission procedures, open classrooms and the openness manifested between teachers and students. Open spaces, substantial amounts of freedom combined with rigorous requirements, an emphasis on teamwork, the free flow of information, diversity, tolerance and equality between students, teachers and staff are some of the elements of this, for the Baltic region, very exclusive and innovative education. Students take advantage of it in unexpected ways, however, and bend the rules to better suit the culture that they have grown up in, which does recognize status and ethnic differences. They prefer to form teams of friends and acquaintances, and accumulate informal debt and credit among themselves, participating very actively on some projects and ‘freeriding’ on others. The use of name tags, English only, and staff equality are elements that have been difficult for the school administration to impose. Thus, the generalized organizational ideals of transparency and equality constantly negotiate with local culture and practice, which affect outcomes. Interestingly, the students in this business school appear to have learned their lessons almost too well; Timm notes that after graduation most of them can be found working for transnational corporations, rather than contributing their vision and expertise to local companies. If those who work within modern businesses or organizations are to exhibit particular values and practices, what about institutions and organizations as such? In what ways do they exhibit themselves, make their nature known? Certainly in modern society we see repeated examples of how organizations manifest their mission, core values and goals, ‘who we are’ and ‘what we stand for’. The chapter by Galli (Chapter 3) approaches transparency from this direction, discussing the process through which an advertising agency acquires the knowledge it needs to work with an organization’s brand to reposition it with the public and vis-à-vis its

Introduction

11

competitors. Such exercises are undertaken ‘to answer some questions about who we are, and, more crucially, who we want to be’, and involve the participation of employees who brainstorm together to come up with concrete characteristics that clarify the image that they want their organization to project. As Galli indicates, the series of exercises oblige the participants to look deeply within their organization in order to come up with descriptive categories, and then challenge them to compare and contrast their descriptions with other categories in a process which gradually distils a portrait of the organization. Interestingly, in looking within the organization, employees also look within themselves, and the target pictures that company employees come up with during such brainstorming exercises are as much a constitution of themselves and their cherished values as a desired projection. In this way, the organization is indeed forming an organizational identity, and making itself transparent, while the advertising agency functions as the active listener, gathering the material it needs to be able to produce images that will both describe the organization and resonate with its public or customers. Transnational corporations are powerful actors in contemporary global society. Their influence on the distribution of resources – economic, social, educational, environmental – is wide-ranging. Equally evident is the challenge for state agencies to gain some degree of overview and control of the extent to which they are actually living up to national and international regulations and agreements on issues relating to human rights, workers’ rights and democratic governance. The media, activist groups and nongovernmental organizations have contributed to making the global regulatory gap visible and the need for measures to increase openness, transparency and accountability in organizational processes. Within the corporate social responsibility movement (CSR), transparency occupies a central place, closely tied to accountability, and to the technologies by which these are to be implemented: voluntary codes of conduct, standards for social responsibility and the like. Garsten and Lindh de Montoya (Chapter 4) examine the flow of information in modern corporations and the tension between incentives to conceal and imperatives to reveal at all levels of corporate life, from the leadership to the rank and file, noting that transparency is about boundary-work as well as about power. It is hardly a new problem in organizational life, but rather a classic issue in organization and management that has been pushed into the spotlight by recent corporate scandals, the growth of individuals investing in stock markets and increasing interest and advocacy in the CSR field, including the proliferation of social standards and codes of conduct. ‘Being transparent’ and ‘accountable’ are moving rapidly from being voluntary acts to becoming normative imperatives considered basic for

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Transparency in a new global order

establishing trust and generating profits and value. It should be recognized, however, that demands for transparency also have a coercive aspect – forced voluntariness – and involve costs, sometimes substantial ones.

TRANSPARENCY AND REGULATION: NEGOTIATION, IDEALS, COMPROMISES Although in this volume we are arguing for a wide description of the phenomenon of transparency, and include a wide variety of manifestations of the principle in an effort to show how it is an important organizing principle for our times, transparency has without a doubt recently been most discussed in connection with economic transactions. The sudden and unexpected collapse of huge companies – Enron, Tyco, Parmalat and Scandia, to mention only a few – owing to economic practices hidden from public view caused outrage in the economic community and among the public, spurring new rounds of regulation. Several contributions in Part II discuss transparency in economic life, revealing the consultative processes by means of which transparency is constructed. Transparency has been frequently discussed in relation to regulation, not least voluntary forms of regulation, such as soft law and codes of conduct. It is thus closely associated with governance, or governing without government, and new forms of control such as partnerships and networks. It involves a particular understanding of governance and regulation, one stressing the value of visibility, observability and revelation. In Ann Florini’s words, ‘Transparency may thus be discussed as regulation by revelation’ (Florini, 2003, p. 34). By making information about policymaking processes, decision-making, environmental and labour practices or budgets accessible to the public, governments and corporations are forced to be responsible and trustworthy. Also relevant to this notion of transparency is the ‘trust in numbers’ so widely spread in public policy-making, in the financial markets and in corporate board rooms. Belief in the neutrality of numbers has underpinned the building of welfare societies, labour market policies and measures, as well as decisions on investment and bankruptcy. The use of indicators and the like is based on the idea that numbers are politically neutral and that they are easy to compare (Miller, 2001, p. 382; Porter, 1995, p. 8), allowing for judgement of what is ‘best practice’ and ‘good governance’. These, and similar terms, like ‘good definition’ and ‘robust data’ are presented as objective and neutral. Our take on it is rather that they are not objective entities, but reflect processes of negation and definition-drafting. Indicators, figures and numbers are produced in a political and cultural context, by actors

Introduction

13

with particular interests and perspectives, which have an impact on the ways they are used in regulatory activities and on the outcomes. Noting that the concept of transparency is beginning to appear in a variety of contexts such as management, corporate governance, multilateral policy-making, banking and market efficiency, Grossman et al. (Chapter 5) explore the common elements that the concept shares in three spheres in which references to transparency are frequent – markets and price discovery, management and institutional investors, and state regulation and economic policy. By briefly examining cases within these spheres they shed light on some of the issues and contradictions involved in the provision of transparency. A key difference in modes of transparency, they note, is that they can be either virtual or abstract. Financial markets, for instance, may be transparent either because all the actors ‘see’ and recognize each other, or because they do not, as is the case in modern trading systems where bids are anonymous and transactions carried out via algorithms. Thus, transparency occurs as well in environments where actors do not ‘see’; the vital element is egalitarianism, monitored by an abstract entity such as a trading board or other overseer. This is an aspect of transparency that comes up again in Montoya’s discussion of voting processes; without secret and hidden spaces, such as the secret vote – again monitored by an abstract entity – the exercise of democracy is impossible. In the realm of institutional investment and corporate governance, the authors point out that format is very important in transparency, as small changes in disclosure demands and timelines can make a big difference to the diffusion of information, and the consequent ability of the public to react. They indicate that transparency involves costs, and demands a transparency-literate public. The aspect of the public in transparency – and it is very much a public phenomenon – is interesting. Transparency is a sharing, an invitation to discussion. This can be seen in action in the way multilateral organizations such as the European Commission now draft policies – with openness with and between stakeholders. Variations on this theme and various difficulties experienced in constructing transparency between government and citizens are discussed by Soneryd and by Abram. Transparency practices can either be disciplinary, that is, calling to account, or enabling, that is, setting up infrastructures which more easily allows for open practices. Literal transparency stresses individual involvement in transparency, while abstract transparency refers to aggregating mechanisms which abstract the public, and produces transparency through measurement devices. Transparency needs devices for its implementation, and Grossman et al. make a case for viewing the phenomenon more as a set of devices than a

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Transparency in a new global order

principle. How transparency is put into action – whether it is disciplinary or enabling, literal or abstract – makes a great difference regarding the way and the extent to which it involves and benefits the public. Yenkey’s and Thedvall’s contributions (Chapters 6 and 7), drawn from different areas of regulation, both point out the ways in which the transparency that is presented to the public is negotiated in sometimes quite lengthy and complex processes, in which self-positioning in relation to others and manoeuvring to obscure data may have as large a part to play as the need to reveal. Yenkey discusses the financial regulation of stock markets, and focuses on the activities of the Securities and Exchange Commission (SEC) over the past decades, and how these have been received by traded companies and by the public. He notes a process of negotiation that takes place between regulators and the regulated, a tug of war regarding how much information must be disclosed. While regulators, acting both on US Congress initiatives and based on their own research, tend to increase the amount of disclosure required, companies and brokerages resist, seeking to retain advantages, market niches and to limit the economic costs of the production of transparency. Thus markets are – despite the diligence of regulators – constructed and enacted by human beings and will remain imperfect. As MacKenzie et al. (2005) have noted, today’s complex business enterprises are in a constant state of movement and it is very difficult to determine their precise financial situation – and the snapshots created through official documents are limited by the structure of those documents. Also, companies are in some respects able to use their discretion regarding what is divulged. Transparency can never be complete, but it moves us as a collective towards a higher state of deliberative democracy. Another process of negotiation; but one that is more formalized, is the one discussed in Thedvall’s chapter. The European Union’s attempt to coordinate their labour market policies has resulted in the development of a common strategy including guidelines that are supposed to inform member states’ labour market policies. A series of indicators have been developed to make policies more transparent and to monitor and assess progress within member states and between states. Thedvall takes us into the nitty-gritty negotiations taking place in committee meetings, showing how different member states react to and lobby for particular indicators, depending on the political and economic history that has shaped labour relations in their country, and what they believe should be shown. The member states sometimes have quite different opinions regarding what is important to measure, and what should be put on display. For example, are frequent strikes a measure of the engagement of the public in labour issues, or are they an indication of poor communication between employees and employers? Here, transparency is shown to be a product that is socially constructed: as

Introduction

15

member states negotiate about what indicators should be used to evaluate, audit and compare each other, they construct the parameters of transparency; and here, by building alliances and reaching compromises, there is room to manoeuvre, to ensure that certain aspects of labour relations are measured and others are not. While the figures that are finally published and consumed by the public may appear to be politically neutral, they are in fact neither objective nor context-free. Hasselström also examines the selection of criteria in the production of transparency in her chapter on ethical investment funds. While a number of international organizations are active in defining socially responsible investing, there is no consensus regarding what standards should apply. Nonetheless, some generally accepted principles concerning social reporting can be established. The use of measuring instruments is central to the project of evaluating whether or not a particular company’s stocks or certain financial products can be seen as being ethical, and measurement is seen to depend on transparency – that is, corporations’ will to disclose information regarding their activities. Measuring tools that standardize and make comparisons possible are needed in order to grade or rank investment vehicles as more or less responsible – but what should they measure, and in what way? Hasselström (Chapter 8) discusses how different measuring tools currently in use are constructed, showing the numerous complex calculations that go into establishing rating systems that serve as vouchers for the correctness of the financial products advertised as ‘ethical’. She questions the fact that the tools themselves are not discussed as problematical, although they serve to define what they measure – there seems to be an unquestioned belief that application of the proper tools will guarantee investments’ social responsibility. The above-mentioned chapters, then, discuss different ways in which transparency is mediated. It may be established by governing commissions and renegotiated by the governed, thrashed out in highly political committee meetings, or more mechanically established by academics designing measuring tools. The fact that all representation is situated, or mediated, as Klintman and Boström note (Chapter 9), seems to be a fundamental challenge in achieving transparency. In their chapter these authors, who have written widely on ecological risk and eco-labelling, develop a framework for thinking about different levels, or layers of transparency or transparency processes. They note four layers, of which mediated transparency is the simplest; here, the public puts its faith in the measuring devices of the groups of experts who set up labelling schemes. The next level, negotiated transparency, pays attention to the interdependence and inseparability of ‘substantial’ or material factors such as criteria, substances, thresholds and so on, and the labelling procedure itself – the political framework, and the

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Transparency in a new global order

goals and strategies of different actors which all have consequences for the process of constructing a transparent labelling scheme. Discussion of criteria and trade-offs are inevitable in any regulation process, yet this is seldom apparent in the labels that customers see. The third level, intraframe transparency, deals with questioning definitions of, for example, ‘cleanliness’ – can nuclear power be defined as a form of clean energy because it does not pollute in the way that coal-based electricity does? Interframe transparency takes the process of examination yet a step further, questioning frames themselves, and asking ‘Are we posing the right questions?’ and ‘Are we moving in the right direction?’ Thus this level of transparency reflects on the value and goals of the transparency process itself. Klintman and Boström point out that the basis of their distinctions is the understanding that transparency requires a broad analysis, which takes into account political and cultural contexts: ‘several debates presuppose these other layers of transparency: where procedural and political aspects of labelling schemes are acknowledged, where inconsistencies with the frames surrounding labelling schemes are identified, and even where the interpretive frames themselves are questioned’. These levels of questioning, common to transparency devices in general, shed light on the different areas of contestation in procedures that ostensibly lead to greater transparency for the public.

TRANSPARENCY AND THE PUBLIC: PARTICIPATION, EXCLUSION, AMBIVALENCE Part III of this volume takes up transparency in processes that deal directly with the public, presenting three case studies where the ‘carrying out of transparency’ became quite difficult. These cases demonstrate that the public and the authorities that govern or organize them can have very divergent views as to what transparency consists of, and they also show how complex and sensitive negotiations can become. It is becoming more and more common for public authorities to try to involve, or to consult with the public in decision-making processes that are contested; yet increasingly authorities also find that they have their hands tied, be it by international agreements, economic factors or political pressures and considerations, and thus cannot follow through on the intention of the original plans. The lack of a clear idea of what, exactly, is possible and desirable, and a concrete ‘design’ for transparent procedures can also be a part of failures. Also, both public and state demands for transparency can be used as a weapon, to harass certain groups or to stop or hinder political process or decisions from being taken.

Introduction

17

Abram and Soneryd (Chapters 10 and 11) discuss case studies of particular fora for public participation, a practice that is gaining in popularity and is seen as a mechanism leading to greater transparency between the public and policy-makers. Abram’s case comes from the field of urban renewal, or ‘regeneration’ in Britain, and analyses Norfolk Park, one such regeneration programme undertaken in Sheffield. The public was invited to participate in the planning of the project from the very beginning, and voiced particular requests, primarily regarding the building plan for the project and ecological solutions for the area. These were, however, gradually ‘edited out’ of the project, ostensibly for economic reasons – pointing at a fundamental problem in integrating the public in planning. Abram notes that there is an intrinsic incompatibility built into alliances such as the public–private partnerships now frequently used in redevelopment because the citizens that become involved (and sometimes planners) tend to seek solutions that are more oriented around social values than the profit values sought by implementers. When Norfolk Park inhabitants did not see any of their requests materialize, and received no good explanation for this, or for the lengthy delays, they tended to resort to explanations that involved corruption, or the individual prestige of the project implementers. Yet another intrinsic problem is that of the definition of ‘the public’. While elected representatives answer to a particular constituency, participative outcomes can depend highly on who comes to participate, and who stays away from open public meetings. The ways in which meetings are run, and how people are received are also likely to play a major role in outcomes, and there may well be need of a ‘best practice’ guideline for such attempts at public integration. In Sheffield, the many actors involved in the process – contractors, subcontractors, the city council, special planning team and the ‘landlord’ (North British Housing) as well as different citizens’ groups – made transparency very difficult to achieve, and information about and explanations for delays, as well as the reasoning behind the plan that was executed, were not available to citizens, who seem to have been primarily sought in an early ‘input’ stage. Such attempts at integration through the practice of transparency are more likely to further alienate the public than encourage them to make contributions of time and energy.5 Thus, the manner in which ‘the public’ is to be involved in policy-making and local change becomes highly charged, and may not necessarily lead to greater transparency; it may, as in the case of Abram’s participants, leave them feeling that the entire process in which they have participated is highly opaque and confusing. This is an issue which also appears in Soneryd’s discussion of a transparency forum held in Sweden to provide understanding of different stakeholders’ concerns regarding the emissions from the third-generation (3G)

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Transparency in a new global order

telephony network under construction. Although Sweden’s policy on emissions is in fact primarily driven by recommendations from international bodies such as the European Union and World Health Organization, the forum provided a way for groups to negotiate their positions in relation to each other, by testing ‘articulations’ or ‘propositions’ (Latour, 2004, p. 210f) of how things are, or could be, within a particular scientific/public arena. These propositions later become more formalized upon the production of a written report on the proceedings, leading to contestation over the editing of this report. Soneryd further shows how difficult it can be to arrange such a forum on a highly controversial issue, as the very setting up of the meetings, attendees and definitions of what is to be discussed also become processes of negotiation. Viktorin (Chapter 12) brings up the challenges of transparency in the context of Viking 03, an international civil–military exercise carried out with the aim of developing technology and procedures useful when preparing troops for peace support missions. Improving civil–military co-operation was a large part of the exercise, as international security has increasingly become based on co-operation and openness – and here, transparency becomes a key concept. As an observer within the exercise evaluation group, Viktorin gained access to the discussions held prior to and after the exercise, as well as to the exercise itself. He notes the illusory distance between policy and audit: audit can be, and often is, designed to confirm the success or good performance of the institutions it is supposed to scrutinize. Everything depends on the questions asked, who is asking and who is answering. The independence of the auditors, as well as the audited, is thus crucial, and both parts need to be drawn from diverse backgrounds, as well as be free of the various pressures and influences that might be exerted on them. Simply creating such a situation can be an enormous challenge, even assuming the political will to create it exists. In Viking 03, evaluation and audit tended to merge, with an ulterior motive for the evaluation, and the means of achieving it, well established before the exercise began. As pointed out by Shore and Wright (1997, p. 62) ‘challenging the terms of reference is not an option’ in relation to a number of the concepts that we live by today – conflict preventionism is as taken for granted as neoliberalism and, indeed, as the idea of transparency itself. Elections, and the presidential referendum that took place in Venezuela in 2004 is the subject of Montoya’s chapter (Chapter 13). It points out that calls for transparency can also be used as a weapon to subvert democracy, which also requires hidden or opaque places in order to function. In the drawn-out battle against the presidency of Hugo Chávez, the many demands put on the opposition by the national electoral council in the interests of transparency obliged the opposition to collect signatures requesting

Introduction

19

a referendum over and over again. The draconian circumstances imposed on signature-collection led to a highly polarized political situation and the web publication of the list of signatories by a member of the legislature resulted in political persecution. When the referendum finally took place, the lack of transparency in the audit led to accusations of fraud, and the final failure of the vote to bring the referendum battle to a satisfactory closure. It put the entire electoral system in question, and when electronic fingerprint machines tested for subsequent elections proved to register the votes of participants, the opposition boycotted the vote, resulting in massive electoral abstention. Here, both transparency and non-transparency are being manipulated for political ends, putting faith in the electoral system and democratic practice in peril. Transparency has come to be viewed as an important means for organizations and individuals to cleanse themselves of mistrust and accusations of various kinds. We may even say that there is now a generally held belief and trust in the notion of transparency as a response to drastic social change, brought about by the globalization of markets and an increasingly fragmented political authority. Facilitating communication and providing a point of direction among and for parties that may represent very different interests, the concept has the capacity to move across organizational, social and political contexts, to disentangle itself from the particularities of local context and to re-entangle with new actors in new contexts and situations. Its very abstractness and visionary character facilitates its use across social contexts, across organizations, countries and cultural boundaries of any sort. Transparency works across the board, so to speak. The desire to unveil the hidden, to disclose the closed, to reveal the concealed – in short to make transparent that which is out of sight – is as central to economic processes as it is to political ones (cf. Larsson and Lundberg, 1998). It evokes the idea that neither the organization, nor its members, have anything to hide. The concept may then work as a generalized motivational force with the capacity to influence and mobilize people in certain ways. In this volume, we do not venture to provide the full picture of transparency as an organizational ideal. That would be an oxymoron, not least given the nature of the topic itself! Rather, our more modest hope is that the discussions in the chapters, separately and taken together, will inspire further reflection on what transparency is and may be in a given context, and what the call for transparency stands for. We believe that the answer to such questions orbits around classical questions of who we aspire to be, what missions we have for our organizations, and what hopes we hold for our societies. Transparency, in whatever mould it comes, provides a dramaturgy for organizational processes, and a direction for human beings. Whether it is an unquestioned good or not, we leave you to judge.

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Transparency in a new global order

NOTES 1. We may note here that philosophers like Merleau-Ponty (1968; 1986) took an interest in the role of vision for the development of human consciousness and identity. For Merleau-Ponty (whose phenomenological view was influenced by that of Heidegger), when the child is capable of becoming a spectator of him or herself, as in a mirror, when he or she understands that he or she is visible to him or herself and others, the child is able to perceive him or herself as a bodily subject, and hence to engage with the world around him or her. (See also Lacan, 1977, for a similar philosophical standpoint regarding the ‘mirror-stage’ in personal development.) 2. Also in fiction writing and film, the links between transparency and the exercise of totalitarian power have been explored, perhaps most notably in George Orwell’s Nineteen Eighty-Four (1949), and in The Traveler, by John Twelve Hawks (2005). A couple of films in which allusions to transparency are central are Irwin Winkler’s The Net (Columbia TriStar, 1995) and Paul Verhoeven’s Total Recall (Live/Artisan, 1990). 3. For a more recent printing, see Bentham (1995). 4. The literature on Foucault’s analysis of power is vast. For an interesting discussion on the analysis of panopticon, see the interview ‘The eye of power’ (in Gordon, 1981). For further discussions on the relevance of the idea of panopticon in social science, see, for example, Roy Boyne (2000). 5. Writing about public policy in ‘tenant management’ schemes in England, Hyatt (2000) has also pointed out the large amounts of unpaid labour that is often required of poor people, often women, when they are required to become involved in participative schemes in the context of urban regeneration.

REFERENCES Barthes, Roland (1967), Le Bruissement de la Langue, Paris: Editions du Seuil. Barthes, Roland (1986), The Rustle of Language, New York: Hill and Wang. Bauman, Zygmunt (1998), Globalization: The Human Condition, New York: Columbia University Press. Bentham, Jeremy (1995), ‘Panopticon’, in Miran Bozovic (ed.), The Panopticon Writings, London: Verso. Boyne, Roy (2000), ‘Post-panopticism’, Economy and Society, 29 (2), 285–307. Deleuze, Gilles (1995), ‘Postscript on control societies’, in Gilles Deleuze, Negotiations, trans. M. Joughlin, New York: Columbia University Press, pp. 177–82. Florini, Ann (2003), The Coming Democracy. New Rules for Running a New World, Washington, DC: Island Press. Foucault, Michel (1977), Discipline and Punish: The Birth of the Prison, trans. Alan Sheridan, New York: Pantheon Books. Giddens, Anthony (1990), The Consequences of Modernity, Cambridge: Polity Press. Gordon, Colin (ed.) (1981), Michel Foucault, Power/Knowledge: Selected Interviews and Other Writings, 1972–1977, New York: Random House. Graeber, David (2001), Toward an Anthropological Theory of Value: The False Coin of Our Own Dreams, Basingstoke: Palgrave. Hawkes, John Twelve (2005), The Traveler, New York: Doubleday. Heidegger, Martin (1982), The Basic Problems of Phenomenology, Bloomington, IN: Indiana University Press.

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Hood, Christopher (2007 [2006]), ‘Transparency in historical perspective’, in Christopher Hood and David Heald (eds), Transparency: The Key to Better Governance?, Oxford: Oxford University Press, pp. 3–23. Hood, Christopher and David Heald (eds) (2007 [2006]), Transparency: The Key to Better Governance?, Oxford: Oxford University Press. Hyatt, Susan Brin (2000), ‘Poverty in a “post-welfare” landscape: tenant management policies, self-governance and the democratization of knowledge in Great Britain’, in Cris Shore and Susan Wright (eds), The Anthropology of Policy: Critical Perspectives on Governance and Power, London and New York: Routledge, pp. 217–38. Lacan, Jacques (1977), The Mirror Stage as Formative of the Function of the I as Revealed in Psychoanalytic Theory (first published 1949), in Ecrits: A Selection, trans. Alan Sheridan, London: Tavistock Publications. Larsson, Mats and David Lundberg (1998), The Transparent Market, London: Macmillan. Latour, Bruno (2004), ‘How to talk about the body? The normative dimension of science studies’, Body & Society, 10 (2–3), 205–29. Levin, David Michael (1988), The Opening of Vision: Nihilism and the Postmodern Situation, London: Routledge. MacKenzie, Donald, David Hatherly and David Leung (2005), The Finitist Accountant: Classifications, Rules and the Construction of Profits, University of Edinburgh: Working Paper, School of Social and Political Studies. Merleau-Ponty, Maurice (1968), The Visible and the Invisible, trans. Alphonso Lingis, Evanston, IL: Northwestern University Press. Merleau-Ponty, Maurice (1986), Phenomenology of Perception, London: Routledge and Kegan Paul. Miller, Peter (2001), ‘Governing by numbers: why calculative practices matter’, Social Research, 68 (2), 379–95. Orwell, George (1949), Nineteen Eighty-Four, London: Secker and Warburg. Porter, Theodore M. (1995), Trust in Numbers: The Invention of Objectivity, Princeton, NJ: Princeton University Press. Power, Michael (1997), The Audit Society: Rituals of Verification, Oxford: Oxford University Press. Rose, Nikolas (1999), Powers of Freedom: Reframing Political Thought, Cambridge: Cambridge University Press. Scott, James C. (1998), Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed, New Haven, CT: Yale University Press. Shore, Cris and Susan Wright (eds) (1997), The Anthropology of Policy, London: Routledge. Strathern, Marilyn (2000), ‘The tyranny of transparency’, British Educational Research Journal, 26 (3), 309–21. Strathern, Marilyn (2005), ‘Robust knowledge and fragile futures’, in Aihwa Ong and Stephen J. Collier (eds), Global Assemblages: Technology, Politics and Ethics as Anthropological Problems, Malden, MA and Oxford: Blackwell, pp. 464–81. West, Harry G. and Todd Sanders (eds) (2003), Transparency and Conspiracy: Ethnographies of Suspicion in the New World Order, Durham, NC: Duke University Press.

PART I

Transparency and Utopia: Visibility, Truth, Future

1.

Truth in 3D: displaying historical evidence at the United States Holocaust Memorial Museum Bodil Birkebæk Olesen

In an essay from 1967 Roland Barthes discussed what he termed the transparency effect, a representational strategy found in conventional historical discourse that sustains an illusionary direct link between past reality and its historiographical representation: ‘that paradox which governs the entire pertinence of historical discourse . . . facts never have any but a linguistic existence . . . yet everything happens as if this linguistic existence were merely a pure and simple “copy” of another existence, situated in an extrastructural field, the “real” ’ (Barthes, 1986, p. 138).1 Echoing Nietzsche, Barthes argued that facts do not exist as such until a meaning, a narrative framework, is introduced to establish the significance of the facts. Therefore, any historical account has an inescapably textual nature. But the anonymous and impersonal style of the historical text diverts attention away from the existence of this narrative framework and creates the illusion that the text simply mirrors the referent, the real. What makes Barthes’s essay even more interesting in relation to this volume is his suggestion that this primacy attached to ‘the real’ in historical discourse reflects a fundamental characteristic of Western civilization, which he claimed: [is] attested to by the development of specific genres such as the realistic novel, the private diary, documentary literature, the news items, the historical museum, the exhibition of ancient objects, and, above all, the massive development of photography, whose sole pertinent feature (in relation to drawing) is precisely to signify that the event represented has really taken place. (Barthes, 1986, p. 139)

It is this insight, that the category of the real can be signified and given value in its own right, independently of its contents, and the idea that not only historical discourse but also photographs, old objects and institutions like historical museums can signify this category that interest me here. In this chapter I wish to take Barthes’s notion of the transparency effect as my analytical starting point and look at the way in which the past is represented 25

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at the United States Holocaust Memorial Museum in Washington, DC. Barthes’s notion is a useful analytical starting point for understanding the basic premises of displaying objects, photographs and text in any exhibition. But, as I will demonstrate, it also highlights how this representational strategy can be consciously employed to fight off criticism or establish authority when the truthfulness or the accuracy of a certain representation of the past is brought into question. It is specifically this latter point that is significant for this volume’s focus on the politics of transparency: the chapters in this volume all demonstrate how transparency is a concept that has gained increasing importance and is being implemented in various ways and in various contexts today. Transparency, or visibility, seems to promise at least a degree of accountability and thus control over, for example, international financial institutions or public policy. It would be somewhat hypothetical to characterize concerns over accurate representations of the past in general, and of the Holocaust in particular, as a likewise recent social phenomenon. However, the concern for accuracy, which translates neatly to visibility (as objects, text panels and photographs on display) in an exhibition context, reflects a similar concern for a degree of accountability: The United States Holocaust Memorial Museum is thought to guarantee the accuracy and truthfulness of its representations, an accuracy that can serve to dismiss the claims of Holocaust deniers, or to ‘set the record straight’ in today’s mediascape (Appadurai, 1990) where history-as-commodity is seen as leaving no room for concerns over accuracy or adequacy (Cole, 1999; Hewison, 1987). As Barthes, and the other authors in this volume, I see transparency as a concept or phenomenon that arises in a specific context in which it is valorized, invented, defined and practiced. For this reason it becomes central to ask questions as to who valorizes and defines, and who decides what should be made transparent and what should not. However, by focusing on a transparency effect rather than on transparency per se, I wish to describe a representational strategy that diverts attention away from the process of defining, selecting and presenting, and thus presents a socially created transparency as self-evident and exhaustive. The argument of this chapter is in this sense relatively simple: letting the past speak for itself, presenting it as it ‘really’ was by ‘just’ presenting the facts is a noble dream, to borrow Novick’s (1988) term. But the question remains as to what is lost and what is gained by pursuing it.

AUTHENTICITY AND TAUTOLOGY Barthes characterized the illusion of historical discourse as that of a deceiving copy: it is mainly the impersonal style of the account that allows

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it to appear as a mere copy when: ‘the “real” is never more than an unformulated signified, sheltering behind the apparently all-powerful referent’ (Barthes, 1986, p. 122). However, old objects, or relics (Lowenthal, 1985, p. xxiii) have a somewhat different quality by virtue of being tangible survivals from a past now gone. They apparently are not representations. And in the case of photographs, they seem to be immediate captions of past events rather than representations. The objects thus have that authenticity, or aura, that Benjamin (1969) identified in relation to art: a unique existence in time and space that sets them apart from their copies or reproductions. This seems to be the underlying premise of Donald Horne’s argument that authenticity is the special magic of museums: in a technological museum, it is not that this is the kind of steam engine that Watt constructed that makes it interesting, but that it is the very steam engine Watt constructed. In an art museum, it is not that this painting is beautiful, but that it is an authenticated Rembrandt. In a history museum, it is not that this is the kind of hat that Napoleon wore, but that this is the very hat Napoleon wore. (Horne, 1984, pp. 16–17)

Horne might be right that authenticity is the special magic of museums. But the question still remains why authentic objects are seen as special. And his argument tells us little about why steam engines of the kind that Watt constructed or hats similar to Napoleon’s times often are put on display. Or, to put it differently, what is the special magic of copies and reproductions? And of the photographs displayed to place a steam engine or a hat in a context? In the case of photographs, an argument about photographic realism and its dominant place in Western culture (Tagg, 1988) may be more convincing than an argument about ‘the very photograph taken of Hitler’ that focuses so narrowly on the auratic qualities of objects. Handler highlights this potential of authenticity when he focuses on authentic objects’ capacity to refer to something beyond themselves. The objectification of culture, Handler argues, is the logical counterpart to the objectified identities that characterize the modern, Western ideology of possessive individualism described by Macpherson (1962). Hence the idea of cultural property by which personified social groupings such as nations can (actually must) invent themselves by objectifying their lifeways as culture. Thus museums, as well as the objects on display, are the extensions of this logic: ‘Museums create . . . identities – whether cultures, ethnic groups, historical periods, or even artists – by displaying objects that can be attributed to those identities, that is, by displaying cultural properties which are taken tautologically to prove the existence of the entities said to have created or possessed them’ (Handler, 1993, p. 35).

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In Handler’s view objectification and documentation amount to the same thing. It is in this overall context that we can see how the display of authentic objects – the very steam engine, the very hat – in museums is particularly valued because it is thought of as bringing the spectator in direct touch with, for example, the past (Handler, 1986). But it also explains why photographs and copies are simultaneously valued, because of their ability to create by being produced and displayed. The question remains regarding what, exactly, it is that these objects display about certain identities apart from signifying that they really are displaying these identities? Who chose what objects to put on display? Of all the possible stories that can be told with and about an object, who chose certain stories and for what reasons? It may be that material objects have a tangibility and provenance that discourse does not: that in a sense they are not copies. But the interpretative framework – of collecting, classifying, selecting – is easily hidden; in this case, to rephrase Barthes a bit, behind a seemingly all powerful material, or objectified, referent.2 My emphasis on discourse, objects and photographs and their capacity to signify the category of the real does not entail a critique of any particular representations. I am not arguing that the past ‘did not happen’ or that ‘anything goes’, that any representation is as good as another. One needs to differentiate between epistemological and moral relativism (Kansteiner, 1993, p. 274). Barthes and other scholars have questioned the nature of conventional historical discourse.3 Theirs is a project of assessing to what degree a statement about the past and what it asserts is a matter of interpretation and, consequently, to what degree its truth or falsity is a function of its meta-historical framework or if it has a sound epistemological basis. Ginzburg’s (1992) argument, that historiographical relativism leaves us with nothing to fight off, for example, fascist interpretations of the past, is an important one. But it is also a moral argument – not an epistemological one. Interestingly, the Holocaust has figured more prominently against postmodernist historiography than any other event of the past (Dintenfass, 2000, p. 2). Thus, the image of Auschwitz seems to offer some reassurance against arguments about the fundamentally textual nature of historical discourse as Evans argues (1999, p. 107; see also Bartov, 1996) – or at least to force the advocates of historiographic relativism to address the consequences of a position that is much easier dealt with on an abstract level (Friedlander, 1992, p. 10). However, as Kansteiner (2000) has argued, the fact that the Holocaust did happen, that Auschwitz existed, does not settle the epistemological discussions about the nature of historiographical representations as it does not demonstrate how one uses these facts as evidence in the construction of larger patterns of historical meaning. My emphasis on the capacity of objects and texts to signify the category of the real is

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meant to address this indeterminacy between a cluster of factual knowledge on the one hand and the divergent narrative accounts that can be constructed on the basis of this knowledge, on the other.4 Taking the inescapably textual nature of any account of the past as my starting point I merely wish to have a useful analytical framework for illuminating what happens when one tries to avoid historical interpretation and establish transparency by ‘sticking to the facts’. For this reason my perspective is also slightly different from those who focus on the ideological aspects of specific museums or exhibitions, for example Clifford’s (1988) and Bal’s (1990) work on the exhibition of primitive art and portrayals of non-Western others, respectively. Or the predominantly celebratory and patriotic representations of the past found in some history museums as pointed out by Walsh (1992) and Wallace (1996) among others. A slightly different perspective can be found in Luke’s (2002) analysis of several American museums, including the United States Holocaust Memorial Museum. Luke ties the politics of museum display to the culture war being fought in the United States and worries that most exhibitions confirm existing social realities although intended to challenge them.5 I do not necessarily disagree with these analyses. However, my interest here lies more in the way that the category of the real can be signified at ever higher levels if or when questions of truth and accuracy become an important issue for one reason or another. The difference is nicely demonstrated in Handler and Gable’s (1997) extraordinary ethnography of Colonial Williamsburg. This physical reconstruction of the eighteenth-century capital of Virginia is discussed by Wallace, in his work on history museums in the United States and the kinds of perspectives on the past that they promote (Wallace, 1996). In Wallace’s account, this museum portrayed exactly the kind of idyllic and conflict-free past that in addition seems unconnected to present-day social realities, thus inhibiting ‘the capacity of visitors to imagine alternative social orders – past or future’ (Wallace, 1981, p. 89). When Gable and Handler carried out their research at the museum in the early 1990s the focus of the museum had changed significantly. As a result of the growing criticism (not just from academia but also from the public) of the museum and its celebratory and ‘sanitized’ representations of the past, a team of social historians were hired to change the educational message of the museum and to present a more balanced account of the past. Additionally, these social historians had a clearly articulated constructionist perspective on history and wished to convey such a perspective to its visitors. Among the important changes these historians instigated at the museum was the inclusion of women, workers and African Americans, as well as a conscious focus on slavery, in its representation of the past. By adding the representation of the underside of Colonial Williamsburg, the

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group of social historians hoped to present a more democratic and egalitarian version of history that would challenge visitors to think critically about the past, and about social and economic inequality. Additionally, training workshops were intended to help the museum staff to approach history from a constructionist perspective, and to transmit this perspective to the museum’s visitors. What Gable and Handler saw carried out in practice, however, was a constructionism conflated with what they termed ‘mimetic realism’ (Handler and Gable, 1997, p. 71): in the accounts presented to the visitors by the museum guides (or ‘interpreters,’ as they were called at the museum), the interpreters often focused on pointing out inaccuracies in the physical reconstruction of Colonial Williamsburg and to explain the reason for these inaccuracies (for example, security regulations, visitors’ demands for comfort). Likewise, they would point to details that had been changed recently when research had made it clear that they were inaccurate. The potentially critical accounts of slavery often disappeared from the interpreters’ accounts because they were believed to be undocumented in the historical record. Thus, the original constructionist idea that history is a fluid, social construct, produced by particular people with particular interests, had been conflated with the idea that history is a fluid, complicated construct because we constantly become aware of new facts about the past. And history-making was presented as a process of documentation, of recovering missing information and facts and piecing them together in order to represent them (Gable and Handler, 1996, p. 575).6 Handler and Gable interpret this mimetic realism in light of the institution’s attempt to create an institutional identity for itself that would distinguish it from mere adventure and entertainment parks while appealing to the same customers, and, simultaneously, to establish a credibility armour against accusations of being ‘too sanitized,’ or ‘too Disney’. The consequence of this strategy, they argue, is an inability to address the complex issues of social and economical inequality in any substantive manner as originally intended. Thus, as I argued earlier, the issue is not one of misrepresentation or of ideologically charged representations of past events, but of the limits of a matter-of-fact accounts of past events.

PRESENTING THE FACTS AT THE HOLOCAUST MUSEUM The United States Holocaust Memorial Museum is the country’s national institution for the research, commemoration and dissemination of knowledge of the Holocaust, and is located on the National Mall in Washington,

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DC. Consisting of an impressive 265 000 square feet, the institution contains a museum, a research centre, and a memorial as well as two theatres, a library, archives, classrooms, an auditorium, administrative offices, a museum shop, a temporary gallery, a learning centre and an exhibition for children. The official initiative for the creation of the institution was taken by President Jimmy Carter in 1978, following his administration’s linking of the sale of aircraft previously promised to Israel to the sale of aircraft to Egypt and Saudi Arabia, as well as the establishment of contact with the Palestine Liberation Organization (PLO), policies that were unpopular among the American Jews (Linenthal, 1995, pp. 17–18). Interestingly, this initiative was taken in the wake of a growing awareness of the Holocaust in the United States: from having been relatively absent in American collective memory, the Holocaust began to proliferate in movies, museums and memorials, academic and popular books, and plays as well as in political discourse where the term was evoked in debates over abortion, the crimes against native Americans and the AIDS pandemic (Novick, 1994; 1999; Young, 1993). While some scholars have set out to explore this proliferation and its distinctive American features (Flanzbaum, 1999) others, less enthusiastically, have described it as an industry (Finkelstein, 2000). Cole (1999) and Hartman (1996) both address the moral and intellectual consequences of this proliferation, which they see as trivializing the Holocaust and rendering any profound or adequate understanding of the event impossible. While simultaneously originating in and contributing to this context of proliferation, the United States Holocaust Memorial Museum has also positioned itself in relation to it. One stated objective of the institution is thus to counteract a growing trivialization of the Holocaust (Freed and Dannatt, 1995, p. 4). Another, to which I will return at a later point, is to refute the claims of Holocaust deniers through extensive documentation (Linenthal, 1994, p. 411). The official mission statement, however, defines its primary mission as advancing and disseminating knowledge about the Holocaust, to commemorate the victims and to encourage reflection by its visitors on ‘the moral and spiritual questions raised by the events of the Holocaust as well as their own responsibilities as citizens of a democracy’ (Weinberg and Elieli, 1995, p. 23). Founding Director Weinberg has elaborated on these educational responsibilities of the museum in the following way: The Museum believes that one of the Holocaust’s fundamental lessons is that to be a bystander is to share in the guilt . . . The most crucial aspect of the Museum’s educational role is demonstrating the applicability of the moral lessons learned from the Holocaust to current and future events. (Weinberg and Elieli, 1995, pp. 18–19)

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Of the institution’s 265 000 square feet and six floors, the permanent exhibition, which is my main focus, occupies 36 000 square feet on three floors. Overall, the building is made up of two wings connected to each other by steel-framed glass bridges as well as an open space lying between them, called the Hall of Witness. Access to the permanent exhibition is through three elevators in this Hall of Witness that take the visitors to the building’s fourth floor. From there, the exhibition takes up the entire fourth, third and second floors. At the second floor the exhibition exits next to a commemorative space called the Hall of Remembrance from which a stairway returns visitors back to the Hall of Witness. To move from one wing to the other in the exhibition, one passes over the Hall of Witness through the steel-framed glass bridges covered with the names of people and communities that were destroyed. This spatial layout has been used to structure the many aspects of the Holocaust presented in the exhibition. Roughly speaking the Holocaust is presented as a chronological account, so that as the visitor proceeds through the exhibition he or she also moves forward in the historical chronology. The exhibition spaces on each of the three floors depict the pre-war years of 1933 to 1939, the years of the Second World War and the Final Solution, and the post-war years, respectively. The south wing, containing the largest exhibition spaces, is used to present the chronological account, while the galleries in the north wing elaborate in a more thematic way on aspects previously presented in the south wing. On the top floor of the exhibition (bearing the name ‘Nazi Assault – 1933–1939’) the visitors observe Jewish life in various European countries prior to 1933, the socio-political context in Germany that facilitated Hitler’s rise to power, the Nazis’ widespread use of terror to control the population in Germany, and the implementation of anti-Semitic laws. The events of the Night of Broken Glass are portrayed, as are the international society’s reactions to the political situation. The exhibition also presents some of the non-Jewish groups that were the victims of the Nazi persecution, among them Jehovah’s Witnesses, homosexuals, Freemasons and Roma. At the very end of the exhibition space the many Jews escaping and trying to escape Germany before 1939, as well as the events leading up to the start of the Second World War appear. The last theme before the visitor crosses the glass bridge to the north wing deals with the euthanasia programmes that were some of the forerunners to the Holocaust. The visitor then crosses over to the north wing of the exhibition that contains several touch-screen terminals with five short documentaries all dealing with US reactions to the political events in Europe prior to the Second World War. Having taken the stairs to the middle floor of the exhibit (bearing the name ‘Final Solution – 1940 to 1945’), the visitor is introduced to the isolation and everyday life of the Jewish ghettos, armed Jewish resistance

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against the Germans, slave labour, the massive deportations, concentration camps as well as the planning and implementation of the Final Solution. In the north wing thousands and thousands of shoes found in Auschwitz are on display. Then follows a theme about bodily aspects of the treatment of Jews. The title of this third and last part of the exhibition is ‘Last Chapter’ and presents groups or individuals who resisted the Nazis, Germany’s surrender in 1945, the Allied liberation of the concentration and killing camps, the legal consequences after the war as well as the survivors’ attempts to start a new life. Once again touch-screen terminals present US reactions to the Holocaust from 1940 to 1945. The last element in the exhibition is the film Testimony in which survivors from the Holocaust talk about their lives after the war. The visitor then walks down a small ramp, turns left into an open area from which he or she can either visit the Hall of Remembrance or return directly to the Hall of Witness. This is a very brief overview of the aspects of the Holocaust presented in the exhibition that does very little justice to the text panels making up more than five hours of reading material in the exhibition. But more interesting in this context is the equally extensive display of objects that convey this account: the exhibition contains more than 900 objects, thousands of photographs and five hours of audiovisual material, including original film shooting and sound. The exhibition designers have used a representational strategy in the exhibit that strives for a very direct dramatic encounter with the account.7 Most importantly, the objects are consciously combined in a way that strives to create realistic, physical environments. Many display cases consist merely of a piece of glass separating the visitor and the objects. In these, artefacts are skilfully combined with photographs of which some are enlarged to life size and provide a ‘stage’ or background for the artefacts. This is the case in a section on the euthanasia programmes that are presented in the exhibition as being one of the forerunners to the extermination of the Jews. Here, a hospital bed with straps to tie patients down is displayed next to a white doctor’s uniform apparently free-floating in space on a clear (and thus invisible) plastic mannequin. Behind them a large photo of one of the German clinics for mentally disabled patients that participated in these euthanasia programmes (a thick, black smoke coming out of one of its chimneys) covers the entire wall of the display case. Likewise, in the part of the exhibition dealing with the Nazis’ widespread use of terror to control the German population, an enlarged, life-size photograph of an SS officer and a policeman walking with a muzzled, fierce-looking dog on a leash covers the wall behind the display containing an SS uniform – again put on a clear plastic mannequin so as to hint of a person of flesh and blood.

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Surrounding the uniform are several photographs of Nazi rallies, youth organizations, and business, church, political, and judicial subservience to Hitler. This realistic presentation of objects is intensified in the second floor of the exhibition, which accounts for the extermination of the Jews. Here the glass walls separating the visitor from the objects have been removed, reinforcing the feeling of a direct encounter with the objects. The rather tight and narrow room for movement on the fourth floor is here enhanced to create a feeling of being trapped and driven forward as the visitor walks through the exhibition on rather narrow, railed bridges. As mentioned earlier, the artefacts are not confined by display cases, and this sense of literally walking in the Jews’ footsteps (as one proceeds on the railed bridges surrounded by life-size photos of street life in the Warsaw ghetto) is intensified as one literally crosses through a railroad boxcar of the type used to transport victims to the extermination camps in Poland (facing an enlarged photo of the arrival platform in Auschwitz), turns left and walks through the iron gate from Auschwitz (‘Arbeit macht frei’) and into a large, wooden barrack constructed within the exhibition space itself.8 In addition, there is a way in which the staggering number, size, or scope of the objects add to the physical experience of the exhibition. Photographs enlarged to life size add to the realistic effect – but encountering so many photographs of, for example, the mass deportations also creates a visual sense of not only unbelievable numbers of people being deported – but also of being deported from so many different locations across Europe. So many Jews living in so many different countries. So many aspects of life in Germany being permeated by Nazi ideology, control and surveillance. Or, a slightly different experience, encountering so much human hair, so many rotten shoes in one place. Finally, the use of identity (ID) cards in the exhibition should be described. The museum has produced 558 identity cards containing a photograph and a brief bibliography of a Holocaust victim. Each visitor is given a card upon entering the exhibition and is instructed to read the first page. At the end of each floor of the exhibit, the visitor turns a page in the identity card, thus learning more information about the fate of this person during the course of the war.

THE REAL SIMULACRUM It would be wrong to call this exhibition a simulacrum in the sense of a physical reconstruction of a historical environment (Walsh, 1992). The ‘special magic’, to borrow Horne’s phrase, of this specific exhibition is the

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way in which the transparency effect described by Barthes is realized as a physical entity that can signify that the past events described have really taken place. As previously discussed, in our culture artefacts and photographs are seen as being capable of bringing us into a direct relationship with the past because they are authentic or original. Not only are these objects omnipresent in the exhibition and testify strongly to the reality of the past by virtue of their sheer numbers and omnipresence; but they are also experienced by the visitor as part of an environment that dramatizes the events of the Holocaust, turning them into a realistic experience. As noted, the exhibition is not a literal physical reconstruction of a past environment, and in that sense not as real as the past experienced at Colonial Williamsburg. However, there is a sense in which our Western notions of authenticity, photographic realism and historical reality make this exhibition more real than Colonial Williamsburg – because it is second-degree rather than a physical reconstruction.9 This reality is additionally evoked by a rhetoric of truth that is a continuous point of reference in the accounts of survivors and eyewitnesses – in audiovisual material, text panels and engraved quotations. The same emphasis on historical truth is also found in the museum catalogue. In the process of collecting objects for the exhibition the curators spent an extraordinary amount of time on authenticating the objects. With a few exceptions, any artefact whose provenance could not be established with 100 per cent certainty was omitted from the exhibition. All photos (with one exception) are displayed un-retouched, even when their quality is somewhat compromised by scratches, black spots, and so on (Linenthal, 1994, p. 411; Weinberg, cited in Berenbaum, 1993, p. xv). This process and its purpose are highlighted in the museum catalogue by founding director Weinberg in the following way: In its endeavor to create an exhibition that would in itself serve as historical evidence, the planning team developed an almost fanatic commitment to historical truth. All textual explanations were vetted by renowned Holocaust scholars, all exhibits carefully checked for authenticity. The slightest doubt about the accuracy of the caption of a photograph, or about the provenance of an artifact, led immediately to its disqualification. This quest for truthfulness and proven authenticity helped give the exhibition a very high degree of credibility. Any mistakes would have left the Museum open to critical attacks against its historical reliability. (Weinberg and Elieli, 1995, p. 153)

The discursive and material fusion of transparency is here noted by Weinberg himself as he talks about the exhibition functioning as evidence. What is also interesting in this context is how Weinberg addresses the debates over the adequacy of representations of the past:

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Transparency and Utopia Even though its planners strove for high standards of factual accuracy, the exhibition can by no means profess historical objectivity: no historical narrative can. Composing a narrative means organizing a seemingly chaotic multitude of historic events into a sequential, and perhaps causal, pattern. Thus every historic period lends itself to many different interpretations. (Weinberg and Elieli, 1995, p. 154)

Following this statement, however, Weinberg concludes that ‘though there is no such thing as objective historiography, and there is no end to the controversies among Holocaust scholars over questions of interpretation, there is a general agreement on the basic facts’ (Weinberg and Elieli, 1995, p. 155, emphasis mine). This last quotation captures the basic philosophy behind the representational strategy within the museum. Despite the recognition of the impossibility of objective historical representations, Weinberg argues that as long as we stick to the basic facts, we can achieve historical accuracy and authenticity. By focusing on basic facts the exhibit can claim to position itself outside the domain of controversy over historical interpretations, and thereby create a domain where it is possible to deal exclusively with ‘presenting the well-established actual course of events’ (Weinberg, cited in Berenbaum, 1993, p. xv). Thus, despite recognizing the impossibility of objective historical representation, the museum catalogue still maintains the possibility of transparency in history – the position of ‘just the facts’. And it is these basic facts the museum claims to represent: dates, events, and circumstances which – as has been certified by the experts in the field – all have in common that they have really taken place. And thus, a localized discourse on history creates the transparency effect in which ‘the facts’ come to constitute the direct link between past reality and its representation. We may note here that in Thedvall’s chapter in this volume a similar transparency effect is believed to be achieved in the EU bureaucracy by trusting in numbers and in indicators.

CONCLUDING REMARKS It happened, claims the exhibit in every aspect of its gestalt. And it did. Of course it did. So why all the fuss? From a museological perspective the exhibition is an astounding accomplishment that has taken the skill of exhibition to a new level. And the issue here is certainly not that the exhibition has not got the facts right. The past encountered in the exhibition is a past whose meaning is clear and unambiguous – it is, after all, nothing but the facts. A good example of the limitations and boundaries of this matter-of-fact

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respresentation is the part of the exhibit which deals with the failure to bomb Auschwitz. This section consists of a large photograph taken by Air Force intelligence in May 1944 accompanied by a letter from Assistant Secretary of War John McCloy in which he rejected the request by the World Jewish Congress to bomb Auschwitz, as well as a panel of text explaining that ‘although bombing Auschwitz would have killed many prisoners, it would also have halted the operation of the gas chambers and, ultimately, saved the lives of many more’ (exhibition text, Washington, DC). It is, however, an ongoing debate among historians whether the US Air Force could have saved the lives of many Jews by bombing Auschwitz, and there is certainly no consensus regarding the matter (Linenthal, 1995, pp. 219–23; Novick, 1999, pp. 54–9). Yet in the exhibition these difficulties of using the available facts to establish a definite historical interpretation are not laid out in the open, and as Linenthal concludes: ‘Here use of the more definite “would” instead of “might” keeps visitors from appreciating an ongoing controversy, and makes an interpretive stance a statement of fact’ (Linenthal, 1995, p. 218). Likewise, on the last floor of the exhibition a text panel accompanied by several photographs deals with a Polish resistance group that managed to rescue several hundred Jews out of the country. The deeds of the group are presented in a rather celebratory voice and focus on their courage to act. It is an interesting, but not presented, addition to this story that members of this group, although believing in a Christian call to rescue your brother, were also anti-Semitic (Joan Ringelheim, personal conversation). These are the facts that are not presented to us in the United States Holocaust Memorial Museum. Objects and historical facts were chosen; their authenticity and accuracy was established; and this process of certification is meticulously presented to us in the exhibition and in its catalogues and brochures, so that we can trust their accuracy. But as the examples above demonstrate, that does not in itself give us an exhaustive account of these objects and events and the many interpretations they can sustain. These are the limitations, and the way in which they seem to disappear so that what we do see does appear self-evident, adequate and exhaustive, is what is highlighted by a focus on the transparency effect. Again, no one would accuse the institution of misrepresenting events of the past. And its creation was indeed a struggle, as Linenthal (1995) has attested. The matter-of-fact emphasis in the exhibition should be seen in the light of political pressures and of disagreements between various actors as to the objectives of the exhibition. Thus there is a sense in which the decision to exhibit only the facts reflects a compromise between these opposing actors: at least they could agree on the facts. The limits of this practice, however, might be illustrated by keeping in mind the educational purpose of the

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institution mentioned earlier on: to encourage reflections on the moral and spiritual questions raised by the events of the Holocaust. It happened, and it should not have happened. This the exhibition documents clearly. How and why it could happen, how some chose to be bystanders, to co-operate, to close their eyes, or to actively take part – these are questions that a focus on historical accuracy may not so easily address.

ACKNOWLEDGEMENTS I would like to thank Reinhard Bernbeck and Wulf Kansteiner, both from Binghamton University, for their many constructive comments regarding my work. Thanks also to the participants in the session entitled ‘The Politics of Transparency’ at the EASA conference in Copenhagen 2002, particularly Liselotte Hermes da Fonseca, Christina Garsten and Monica Lindh de Montoya.

NOTES 1. In most English translations of the original French text (Barthes, 1967), Barthes’s notion of l’effet réel has been translated as either the realistic or the reality effect. I here follow Kansteiner (1993) in using the term ‘transparency effect’. 2. See Clifford (1985) for a similar argument. For academic discussions of how to overcome this objectifying tendency of museum display, see Crew and Sims (1991) and Roberts (1997). See Riegel (1996) for an example of an exhibition that challenges the object–subject divide. 3. White (1973) has been among the instigators of these debates. For a survey of these debates see Jenkins (1997). For additional defences of conventional historiography see, for example, Evans (1999) and McCullagh (1998). 4. The divergence between the so-called intentionalist and functionalist schools of thought over the origins of the Final Solution provides a good example of this indeterminacy. See, for example, Herbert (2000). The multiple meanings of the Holocaust found in the realm of public culture illustrate this point as well. See Liebman and Don-Yehiya (1983, p. 142, cited in Cole, 1999, p. 173) on this latter point. 5. Like me, Luke focuses mainly on the realistic representational strategy used in the exhibition. But he arrives at a different conclusion. He questions whether this strategy resembles today’s mediascapes and its registers of entertainment too much and, because visitors so easily identify the events of the past with entertainment or virtuality, the media thus threatens to drown out the message and trivialize the Holocaust (Luke, 2002, p. 38). Luke’s analysis is not necessarily incompatible with my own. And while I conducted ethnographic fieldwork in the exhibition I certainly overheard comments that seem to confirm his analysis. However, I also saw visitors crying and overheard comments such as ‘this must never happen again’. Or, somewhat differently in its message, ‘this could never happen today’ (see also Handler, 1994). These comments seem to me to demonstrate exactly the effect of the matter-of-fact, realistic representational strategy that I point out in my conclusion: that such a representational strategy is only to a limited degree able to prompt its visitors to make the kind of reflections that are intended. And thus, that a past ‘set in stone’, so to speak, can set the facts straight but cannot address the complexities of interpretation, motives, actions, agendas, and so on.

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6. When the issue of slavery was addressed, Handler and Gable noted, the interpreters’ accounts focused on slaves and slave-owners as individuals, and on the relationship between them as relationships between individuals, thus avoiding any discussion of slavery’s institutional aspects (Handler and Gable, 1997, p. 116). 7. See Linenthal (1994, pp. 408–10) for an account of the exhibition planners’ intentions with this visceral exhibition strategy. 8. Naturally, I cannot address every unit or aspect of the representational strategies used in the exhibit. Generally it does suffice to say that a direct encounter with objects and dramatic effects of various kinds is a general characteristic of the exhibition. For a more ‘thick’ description of the exhibition, including the parts that I leave out in this chapter, see Olesen (2000). 9. See Olesen (2002) for an extended discussion of what I call the ‘real simulacrum’.

REFERENCES Appadurai, Arjun (1990), ‘Disjuncture and difference in the global cultural economy’, Public Culture, 2, 1–24. Bal, Mieke (1990), ‘De-disciplining the eye’, Critical Inquiry, 16 (Spring), 506–31. Barthes, Roland (1967), Le Bruissement de la Langue, Paris: Editions du Seuil. Barthes, Roland (1986), The Rustle of Language, New York: Hill and Wang. Bartov, Omer (1996), Murder in Our Midst: The Holocaust, Industrial Killing, and Representation, New York and Oxford: Oxford University Press. Benjamin, Walter (1969), ‘The work of art in the age of mechanical reproduction’, in Hannah Arendt (ed.), Illuminations: Essays and Reflections, New York: Schocken Books, pp. 217–51. Berenbaum, Michael (1993), The World Must Know: The History of the Holocaust as Told in the United States Holocaust Memorial Museum, Boston, MA: Little, Brown. Clifford, James (1985), ‘Objects and selves – an afterword’, in George W. Stocking (ed.), Objects and Others: Essays on Museums and Material Culture, Madison, WI: University of Wisconsin Press, pp. 236–46. Clifford, James (1988), The Predicament of Culture: Twentieth-Century Ethnography, Literature and Art, Cambridge, MA: Harvard University Press. Cole, Tim (1999), Selling the Holocaust, New York: Routledge. Crew, Spencer R. and James E. Sims (1991), ‘Locating authenticity: fragments of a dialogue’, in Ivan Karp and Steven D. Lavine (eds), Exhibiting Cultures: The Poetics and Politics of Museum Display, Washington, DC: Smithsonian Institution Press, pp. 159–75. Dintenfass, Michael (2000), ‘Truth’s other: ethics, the history of the Holocaust, and historiographical theory after the linguistic turn’, History and Theory, 39 (1), 1–20. Evans, Richard J. (1999), In Defense of History, New York: Norton and Company. Finkelstein, Harold G. (2000), The Holocaust Industry: Reflections on the Exploitation of Jewish Suffering, New York and London: Verso. Flanzbaum, Hilene (ed.) (1999), The Americanization of the Holocaust, Baltimore, MD and London: Johns Hopkins University Press. Freed, James Ingo and Adrian Dannatt (1995), The United States Holocaust Museum: Architecture in Detail, London: Phaidon Press.

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Friedlander, Saul (1992), ‘Introduction’, in Saul Friedlander (ed.), Probing the Limits of Representation: Nazism and the ‘Final Solution’, Cambridge, MA: Harvard University Press, pp. 1–21. Gable, Eric and Richard Handler (1996), ‘After authenticity at an American heritage site’, American Anthropologist, 98 (3), 568–78. Ginzburg, Carlo (1992), ‘Just one witness’, in Saul Friedlander (ed.), Probing the Limits of Representation: Nazism and the ‘Final Solution’, Cambridge, MA: Harvard University Press, pp. 82–96. Handler, Richard (1986), ‘Authenticity’, Anthropology Today, 2 (1), 2–4. Handler, Richard (1993), ‘An anthropological definition of the museum and its purpose’, Museum Anthropology, 17 (1), 33–6. Handler, Richard (1994), ‘Lessons from the Holocaust Museum’, American Anthropologist, 96 (3), 674–80. Handler, Richard and Eric Gable (1997), The New History in an Old Museum: Creating the Past at Colonial Williamsburg, Durham, CT: Duke University Press. Hartman, Geoffrey H. (1996), The Longest Shadow: In the Aftermath of the Holocaust, Bloomington, IN: Indiana University Press. Herbert, Ulrich (ed.) (2000), Nationalist Socialist Extermination Policies: Contemporary German Perspectives and Controversies, New York: Berghahn Books. Hewison, Robert (1987), The Heritage Industry: Britain in a Climate of Decline, London: Methuen. Horne, Donald (1984), The Great Museum: The Representation of History, London: Pluto Press. Jenkins, Keith (ed.) (1997), The Postmodern History Reader, London and New York: Routledge. Kansteiner, Wulf (1993), ‘Hayden White’s critique of the writing of history’, History and Theory, 32 (3), 273–95. Kansteiner, Wulf (2000), ‘Mad history disease contained? Postmodern excess management advice from the UK’, History and Theory, 39 (2), 218–29. Liebman, Charles S. and Eliezer Don-Yehiya (1983), Civil Religion in Israel: Traditional Judaism and Political Culture in the Jewish State, Berkeley, CA: University of California Press. Linenthal, Edward T. (1994), ‘The boundaries of memory: The United States Holocaust Memorial Museum’, American Quarterly, 46 (3), 406–33. Linenthal, Edward T. (1995), Preserving Memory: The Struggle to Create America’s Holocaust Museum, London and New York: Penguin Books. Lowenthal, David (1985), The Past is a Foreign Country, Cambridge: Cambridge University Press. Luke, Timothy W. (2002), Museum Politics: Power Plays at the Exhibition, Minneapolis, MN: University of Minnesota Press. Macpherson, C.B. (1962), The Political Theory of Possessive Individualism: Hobbes to Locke, Oxford: Clarendon Press. McCullagh, Behan (1998), The Truth of History, London and New York: Routledge. Novick, Peter (1988), That Noble Dream: The ‘Objectivity Question’ and the American Historical Profession, Cambridge: Cambridge University Press. Novick, Peter (1994), ‘Holocaust memory in America’, in Robert E. Young (ed.), The Art of Memory: Holocaust Memorials in History, New York: Prestel/Neues Publications, pp. 159–65.

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Novick, Peter (1999), The Holocaust in American Life, Boston, MA and New York: Houghton Mifflin, pp. 54–9. Olesen, Bodil Birkebæk (2000), ‘Truth in 3D: commemoration and historical interpretation at the United States Holocaust Memorial Museum’, unpublished Master’s thesis, Binghamton University, NY. Olesen, Bodil Birkebæk (2002), ‘Realisme, dokumentation og det ægte simulacrum: Refleksioner over udstillings- og formidlingsformen på USA’s nationale Holocaustmuseum’, Nord Nytt, 85, 41–64. Riegel, Henrietta (1996), ‘Into the heart of irony: ethnographic exhibitions and the politics of difference’, in Sharon Macdonald and Gordon Fyfe (eds), Theorizing Museums: Representing Identity and Diversity in a Changing World, Oxford: Blackwell, pp. 83–104. Roberts, Lisa C. (1997), From Knowledge to Narrative: Educators and the Changing Museum, London and Washington, DC: Smithsonian Books. Tagg, John (1988), The Burden of Representation: Essays on Photographies and Histories, Amherst, MA: University of Massachusetts Press. Wallace, Michael (1981), ‘Visiting the past: history museums in the United States’, Radical History Review, 25, 63–96. Wallace, Michael (1996), Mickey Mouse History and Other Essays on American Memory, Philadelphia, PA: Temple University Press. Walsh, Kevin (1992), The Representation of the Past: Museums and Heritage in the Post-Modern World, London: Routledge. Weinberg, Jeshajahu and Rina Elieli (1995), The Holocaust Museum in Washington, New York: Rizzoli International Publications. White, Hayden (1973), Metahistory: The Historical Imagination in NineteenthCentury Europe, Baltimore, MD: Johns Hopkins University Press. Young, James E. (1993), The Texture of Memory: Holocaust Memorials and Meaning, New Haven, CT and London: Yale University Press.

2.

Practices of transparency: exporting Swedish business culture to the Baltic states Anja Timm

INTRODUCING THE ORGANIZATIONAL SETTING This chapter probes the overt and symbolic claims to organizational transparency – and moral superiority – staked by a Swedish business school in the Baltic states and their (partial) translation into everyday practices among staff and students. My understanding of organizational practices of transparency is informed by the work of Shore and Wright (1997; 1999; 2000) and Strathern (2000a), who draw on Foucault’s notion of governmentality and the spread of panopticism. These writers seek to challenge anthropologists and others to engage with the comparative study of policy and the ways in which neo-liberalism is becoming taken for granted in a variety of contexts. Following Power (1994), they examine the history and meaning of ‘audit culture’ by analytically tracing its migration from the sphere of finance and management into other realms such as higher education. Strathern explains that, ‘commitment to transparency is overtly commitment to putting an organisation to the test. But it is widely agreed that the technology of transparency embedded in audit is not a good procedure for understanding how organisations really work’ (2000b, p. 315). In this chapter I use the notion of transparency to explore both of these aspects, that is, the way in which one particular organization purposefully displays and presents itself as a model of transparency and how the transparency imperative is received and transformed within the realm of social practice. The context in which I write is part of the wider international knowledge economy that Shore and Wright and Strathern describe. Whilst they are responding to the way in which institutional reform is pursued in the public sector in the West, my area of concern is the former Soviet Union.1 In particular my interest lies with the export of management education and the rise of the managerial class in the periphery of the West. Since 1996 my 42

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fieldwork site has been a Swedish business school that was set up and financed by the Swedish state to support the post-Soviet transition in Latvia, Estonia and Lithuania. Established under the management of the well-known Stockholm School of Economics (SSE), the Stockholm School of Economics in Riga (SSE Riga) was opened in 1994. The conception of this new educational establishment in the early 1990s is commonly credited to Staffan Burenstam Linder who was, at the time, the President of SSE (the mother institution). In a prior office he had been a minister in the Swedish government for the liberal-conservative Moderate Party and he would later go on to become a member of the European Parliament. Drawing on his connections in politics and Swedish business he rallied the necessary support for his organization’s international expansion.2 In the early 1990s Sweden had a conservative government and this helped the Baltic business school project get off the ground. Social democrats and Latvian émigrés were involved too, and thus the school emerged: a grandiose modern project representing a flamboyant gesture of goodwill bestowed by Sweden on its newly re-discovered neighbours across the Baltic Sea. It has been said that initially there were misgivings on both the Latvian and the Swedish side regarding the establishment of a separate and elitist school, and about the lack of integration and co-operation with local universities (Muten and Paalzow, 2004). Ultimately though, none of these concerns amounted to much, for to this day the school represents the largest and most visible Swedish project in Latvia.3 It was created through an act of parliament in Sweden, which pledged to finance it for 10 years initially. The Latvian government contributed the building (not renovated at the time) and the running costs of the school, which was a relatively minor contribution.4 Big corporations came in as ‘progress partners’ and George Soros, the Hungarian-American philanthropist, also made a substantial donation. Irrespective of the (pan-)Baltic emphasis and student body of the school, financial support from the Estonian and Lithuanian governments remains conspicuous by its absence. The financial arrangements to operate the school were extended recently: under the current agreement it is guaranteed until 2010. Continuity of funding from Sweden suggests that the school is viewed as a success story.5 I would like to suggest that through the establishment of this institution the Swedish benefactors were trying to ‘make capitalism happen’ in the Baltic states. That is to say, they were, and are, involved in a deeply ideological endeavour (Wedel, 2001). There was apparently a sense of wanting to ease the Baltic states’ journey into what the Swedish benefactors thought of as a certain, unidirectional path towards the market and democracy. This is how the school’s first director retrospectively described the early days:

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Transparency and Utopia Ideology was not much explicitly discussed. It was quite clear that we wanted to contribute to the disappearance of traditional management, prevailing in postSoviet organizations. Simplistic and generalized, we perceived it in the following way. It seemed as if most people in companies and organizations would avoid taking responsibility and the boss was to decide everything. Access to information was perceived as an asset to the individual and should consequently not be shared. Customers were not on the agenda. On these points we were standing on the opposite side, advocating customer orientation, delegated responsibility, decentralized decision making, control by vision, knowledge and values and financial monitoring. (Muten and Paalzow, 2004, p. 30)

The business school was set up to equip annually 100 students with a degree in modern economics and business studies. Young and academically high-achieving students straight out of secondary school – not yet spoiled by socialist work practices – came to study intensively over a two-year period following a Western curriculum and taught by Western academics. In this way the institution guaranteed a steady supply of well-trained young people to act as ‘catalysts of change’ in the region. Educating these youngsters locally rather than in Sweden was not only thought of as cheaper and more effective, it was a conscious strategy to prevent brain drain from the Baltic states. There was also an interest in sustainability for the organization beyond the Swedish input: a small percentage of students would be selected and sent on to study at postgraduate level, and return later to the school to teach the coming generations. Elsewhere in my work I have traced the crucial importance of grooming that is manifested in the final products of the business school (Timm, 2001; 2003). To look, talk and dress like a Western business person is a major skill that is clearly taught and learned at the school inside and outside the classroom. I have already outlined how the collective negotiation of particular consumption patterns is essential for the formation of a potentially enormously powerful multi-ethnic network. These are important and associated processes that can be charted as the students progress through their degree. In Riga, it seemed that studying at a business school is rather more like attending a ‘finishing school’, for form and style are perhaps more important than content. Here I want to outline more carefully the proposition that is put forward alongside the explicit and relatively standard training in economics, management and business studies. How does the business school stimulate, channel, shape and tweak a particular cosmology-in-the-making? I am especially interested in the way in which the school introduces a particular kind of moral force. Transparency is at the centre of this endeavour and this is what I wish to chart in this chapter. An examination of the notion of transparency – in all its guises – indicates the values and virtues that the business school seeks to implant in its students and by extension, into the Baltic states.

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VISIONS AND VISTAS The business school in Riga – like most business schools in fact – gleams and shines, new and luxurious. It immediately familiarizes the students with what Bourdieu calls the ‘trappings of modernity’ (1996). Unlike their compatriots, who must make do with rundown buildings and attend lectures (before, after or in between their day jobs) held by exhausted professors who themselves juggle a variety of roles and commitments, the students at the Swedish school are privileged – or at least this is how it was in the mid1990s, when the school first opened. Nowhere else in the Baltic states were teenagers encouraged – or even allowed – to roam pretty much as they pleased within such an exceptional setting. The entrance to the school and entry into the school very clearly set it apart. Admission to the business school is elaborate and unusual by local standards: it stresses the fairness of its selection process. By explicitly stating and explaining the new entry criteria the school consciously distanced itself from the socialist past where informal connections were thought to reign supreme, especially in regard to something as important as access to education. The Swedes, in contrast, introduced a whole series of tests, examples of which were exhibited on the school’s website for all to see. According to the rules of this new establishment, all applicants were subject to English, mathematics and psychometric tests. These were followed by the all-important interview. Applicants commented for years on the difficulty of getting it just right: successful applicants had to come across as confident, articulate and dynamic without appearing too arrogant. The physical entrance to the school looks more like that of an embassy rather than a school: posh, polished and designed to facilitate verification prior to admitting the privileged few. It is a testament to the early 1990s when the school’s physical (and political) safety loomed large on the institutional agenda. But even after that, the arrangements came in handy at application time. When I first arrived, in 1995, I was told that for the duration of the application period, all visitors had to be picked up personally by a member of staff from the reception. At the school everybody was acutely aware that someone might try to come in (a parent or a relative perhaps) intent on influencing decisions that were to be taken according to strict and formal criteria only. What was being signalled, once again, was that at this school neither money nor connections matter; only merit in terms of the criteria pre-defined in the application materials counted. One of the most important expectations that the Swedish school had of its students was that they were to trust the institution and its representatives. This was how the first director put it:

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Transparency and Utopia We were concerned about a very low level of trust that, I believe, was due to communism. There was a feeling of fear, especially for authorities, but also for those not related to you or known for years. [. . .] If you are afraid and nervous, how can you learn, listen to arguments and argue back? You cannot. (Muten and Paalzow, 2004, p. 33)

This Swedish perspective on the Baltic context resulted in institutional assurances that at the business school nobody was to talk down to students: as individuals they were neither to be disciplined nor patronized. Local staff was specifically trained, repeatedly, to enable them to comply with this new respectful form of interaction. All the while – according to the school’s management – the Swedes led by example. This organizational policy advocating a new kind of interaction between staff and students found expression also in the smallest objects. All members were required to wear name tags at all times. Intentionally, the name tags of school staff and faculty bore only their first names. Thus students were encouraged to think of staff as if they knew them closely. Whereas local languages recognized seniority, deference to one’s seniors was to be thrown out at the business school. Here, all were equal and people could be criticized irrespective of their status. Instead of showing their respect, students were obliged to communicate with foreign professors on an initially unsettlingly intimate basis. Here is another quote from the school’s first director: ‘As a corner-stone in our way of dealing with students, we decided to make an effort to affect the level of trust, openness and integrity’ (Muten and Paalzow, 2004, p. 34). Thus, students were explicitly prepared for the new forms of co-operation. Over the duration of their studies, students would have to practise these. One important institutional message was that ethnic prejudice would not be allowed to fester. Given the Baltic states’ recent pasts, this was considered a major difficulty for students. As part of the programme, students would have to perform in ever-changing teams. In the very first week a special group dynamics teacher was flown in to tell students all about the need to recognize the principles of diversity and tolerance. Armed with an understanding of these new concepts, they were organized in teams and left to ‘form, norm, storm and perform’ (as group dynamics speak had it). In addition, there were formal lectures on business ethics. These emphasized the importance of fair play by outlining the philosophical history of ethics going back to ancient Greece. Thus the Swedish school signalled to its students that they were (or in any case, should be) utterly unlike the infamous and shady post-socialist mafia types, who resorted to underhand dealings, bribery, racketeering and violence. The new elite students were being groomed to be virtuous, open and fair even in their business dealings. Furthermore, students got to practise democracy. The school’s management

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insisted on various elected committees that were charged with communicating issues, news and grievances between the administration and the student body. The Student Association model had been imported from Stockholm, just like everything else. Formal consultation procedures ensured that meetings were regular and in line with Western standards. Notes of the meetings were circulated by email and the observance of proper process was there for all to see and witness. Transparency could also be found at the physical core of the business school. The focal point of the building was a huge and wide-open space (a modern extension added to the carefully restored art nouveau building). In the open-plan space the ceiling was raised doubly and the outside walls consisted of enormous glass panels. Among students and staff it was known (and used) as the school’s canteen. But when I spoke to the architect he revealed that it had in fact been conceptualized as the school’s ‘democratic heart’. At the very centre of the building was a space for all to gather and be each other’s equal. In this manner openness was thrust upon all users of the building. Elsewhere in the building an open-door policy operated. On the occasion that doors were actually shut, a full-length glass panel right next to it ensured that whatever went on remained visible at all times. The space thus powerfully underlined that within this organization there were no secrets, no boundaries, only unhindered flows of information and easy uninhibited communication. To summarize, safety, legality and fairness (that is, reward based on merit) are the primary issues stressed in all aspects of the organization. The school also espouses, suggests and enforces the centrality of trust (based on openness), equality and democratic principles. It officially endorses teamwork (among equals) as the approved route to success. At the same time the school manifests a particular architectural style: one that is both spartan and luxurious, almost opulent in its minimalism. All these aspects are core elements of what the Swedish school seeks to project and instil in its students, that is, transparency and accountability.

INSIDE The instruments and propositions of transparency outlined above can and must, of course, be examined ethnographically. Swedish business school principles, structures and symbols notwithstanding, during the first decade of its existence the school has been occupied by over 1000 students. Individually and collectively they have made sense of this space, the programme and their own lives within that context. In this section I give some examples of the ‘organizational everyday’ at the business school.

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After an initial period of anxiety in the face of the new, students settled down remarkably quickly. In fact, many students soon preferred the school building to other spaces. This was particularly noticeable among the student population that lived in the residence halls. They avidly avoided the dormitory that had been rented from the University of Latvia. In the dormitories the Soviet period appeared to continue; for the facilities remained virtually unchanged. At the new business school students did not only attend lectures, study and have lunch. They also often stayed for dinner, showered there and adapted the facilities for leisure use. For example, the computer laboratories were used for games and Internet chatting, and the auditorium became a cinema where videos were watched collectively. Private celebrations were conducted too; rather than take one’s new friends home, students chose to bring the cake and champagne into the school and stayed there. Their preference for the amazing modern space that was off-limits to outsiders meant that they were increasingly in the company of their peers and quite literally isolated from other social contacts. As students adopted and adapted the business school, contact with friends and family inevitably began to suffer. Most business schools are specifically designed for networking and it is hard to find one that does not have wide landings and sofas to facilitate contacts, mingling and impromptu discussions. According to Bourdieu, elite educational establishments are all about ‘segregation’ and ‘aggregation’ (1996). As he suggests, careful and highly selective recruitment is followed by spatial and temporal separation of the chosen few from other social contacts. In Riga this is not a matter of all students boarding, but it is helped along by the frantic timetable and the availability of a particularly attractive and exclusive site. The group is deliberately brought together from across the Baltic states. A small number of feeder institutions supply the majority of the students, thus they tend to be similarly privileged and accomplished students. These students are supposed to form a strong and supportive network across the region. But the question is, of course, where does proper, moral, open and fair networking end and where do potentially murky old-style practices reassert themselves? The students found the Swedish ideas about teamwork quite difficult to take on board and implement. This was perhaps not surprising given that even on the organizational level the emphasis on group-based efforts was constantly contradicted and undermined by individual assessment. To get into the school, students were measured in terms of how convincing they were at portraying themselves as ambitious and determined leaders. They had been ranked according to their test and interview results and anyone not making the top 100 was eliminated. The ongoing examinations, too, were almost always a matter of individual performance rather than group assessment.

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I think students found it difficult to comprehend that group work presupposed that the parts of a team are ultimately replaceable (as they had learned in class). Contrary to this official line, most students advocated selfselected semi-stable formations, that is, co-operation with friends and acquaintances. This way of working, they said, worked best because it allowed students to make up their own minds about whom they could and would trust. Most importantly, it provided them with some flexibility in the busy programme. Individuals accumulated informal credit and debt: their temporary lack of participation in some of the projects was covered up by their team members and made up later. In the school’s perspective this constituted free-riding and was condemned. Many students, however, thought of this illicit form of collaboration as an important part of friendship (both new and old). In fact students came to take for granted, or creatively eluded, various institutional parameters and principles. They appeared to value the social aspect of the school over the curricular content. Rather than concentrating on their courses, the majority of students eventually settled into a minimum-effort-maximum-output routine (typical of many schools where the hardest test is getting in). But even if students’ engagement was not a matter of intellectual involvement with the subject matter, they nevertheless had to adapt radically to the ways of the business school. Even if they would learn how to play (and evade) the system, they first had to deal with the onslaught of the new. Many of the organizational demands and principles were explicitly targeting Homo Sovieticus, the allegedly outdated socialist mind-set. To learn to negotiate the new institutional rules was perhaps the students’ greatest achievement. In the previous section I mentioned the compulsory name tags as one important organizational initiative to introduce and routinize practices of transparency within the business school. As it turned out, students dealt with this directive in very different ways. Some openly resisted the name-tag rule. Nobody challenged the rule formally, that is, in the committees or in conversation with the administration; they simply stopped wearing them just as soon as they had collected their grant at the beginning of each month. This eventually led the school’s administration to consider introducing fines for non-compliance. Thus it seemed that those students unwilling to engage at the institutionally prescribed level of intimacy would ultimately be forced to do so. In the end the fines were more of a threat than reality. But the fretting, verbal admonishments, reprimands, committee meeting reminders and frequent announcements clearly marked this particular arena as one where negotiation was taking place. Alongside the non-wearers, there were those who enthusiastically embraced the idea of a label and treated them as an impromptu multimedia

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art project. Most memorably for me, one day I bumped into a student after school. She was on her way to use the colour printer in her father’s office to print out her new name-tag design. Some of these innovative designs actually rendered the students’ names invisible and thus turned the name tag into a primarily decorative object. Some students emulated the style of the teachers’ tags and used their first names only. Alas, there were so many students named Karlis, Martins or Janis that the purpose of actually identifying the wearer was immediately defeated. Yet others used their nicknames, which again made it impossible to match the wearer with the class register. Others still simply changed the font to one that they preferred. For an impromptu joke, students swapped tags and pretended to be someone else. Whilst name tags were initially intended for identification and levelling purposes (and as a way to unite the school community across nationalities), quite a few students made this a project of their own: rather then becoming an equal, they became special and stood out. Or, instead of being instantly recognizable they seemed to be hiding their official identities. Organizationally, the mandatory labelling of students had very practical uses. Lecturers who appeared out of nowhere (commonly from Sweden, the UK or North America) did not know the students, nor were they likely to get to know them given that they interacted for only a week or two at a time, sometimes only for a couple of days. For non-resident faculty the name tags were a shortcut that allowed them to ‘know without knowing’. Each time a student was mistaken for someone else on account of a swapped tag it caused great hilarity: it was a simple trick, but it worked as an effective lowlevel sabotage. And it was a really good joke among friends, thus effectively separating the students as a group from the lecturers that were institutionally wedded to the idea of denying status differentials. This did not mean that students resented teachers from abroad. If anything, Western teachers denoted a superior education that the students were proud to have; on this they all agreed. Challenges to the official doctrine also arose around the official and unofficial use of different idioms. Institutionally prescribed was English for all school business. English was the second (or third or fourth) language for Swedes, Latvians, Russians, Estonians and Lithuanians alike. However, in the politically charged post-socialist environment of the Baltic states it seemed a good choice, for it ‘belonged’ to no single group within the school. It was free to all, or rather, it was mandatory. The use of English (especially in business and business schools) of course also denotes practical considerations and wider ambitions. It is, after all, the language of Western capitalism: by gaining proficiency in it, students prove (and staff enact) an important connection to that centre. But in Riga speaking English also entailed a meeting on neutral ground; it was without immediate colonial

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connotations, that is, unlike other potential choices such as Swedish or Russian. As mentioned already, alongside the use of English a certain informality was purposefully introduced by the school. Students were consistently told to address faculty by their first names. This implied a level of ‘trust’ (according to the Swedish mantra). However, with local staff, students from Latvia were much more likely to converse in Latvian and this subtly skewed the organizational informality agenda. By switching from English to Latvian, students and local staff asserted and consistently recognized hierarchies, and ethnicity-based loyalties re-emerged too. Latvian staff and Latvian students were articulating a certain closeness and belonging, and drew a boundary around themselves as a group. It was not so much that staff refused to do things in English. On the contrary, their ability to speak that language had enabled them to gain prestigious jobs at the school in the first place, but many seemed never quite as happy, relaxed or ready to share a joke in anything other than Latvian. The many outsiders to those conversations wryly and frequently observed that Latvian language skills were rather more advantageous than one might have thought possible within the (allegedly) English-speaking Swedish school. Latvian language abilities provided access for one group of (Latvian) students to local staff who were powerful institutional brokers. All students agreed on this: the organization depended heavily on the support and cooperation of local facilitators. But students’ interpretations varied widely as to whether the dependence of Swedish management on local staff was ultimately beneficial or to the detriment of the organization. On the one hand, there were those who saw their influence as positive and constructive – some even argued that local staff did all the work and got none of the credit. On the other, there were those who felt that the Swedish project (and the modernizing agenda) were somehow let down by a bunch of old-school yokels who were incapable of understanding and translating the true Swedish vision. At the extreme, some thought it rather sad that a tight network of close associates had managed to gain an advantageous position and were milking it for all it was worth. Whilst Lithuanian and Estonian students also took part in these occasional musings about internal school politics, few cared passionately about it. They were going to leave that place behind anyhow. The reassertion of local language (customs and the post-socialist political context) appeared most unsettling to the Russian-speaking students. Some of them lacked the Latvian language skills required for easy banter with local staff. Unlike their peers from the other Baltic countries they did feel under pressure and trapped in the nationalizing agenda of independent Latvia all over again. The Swedish business school had seemed to promise a neutral territory that was focused on aiming at a high-achieving corporate

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career; an ambition that all business school students shared (at least at the time of application). But, instead of entering a new world, old sentiments and divisions reasserted themselves. There was thus a tension between what the students learned in terms of principles about equality and democracy: the organizational everyday immediately contradicted that message. Here is one last example. The school made great efforts to bring in English language teachers from the neighbouring Baltic countries. This was a rather time-consuming and difficult venture (undertaken despite the fact that there were plenty of English language teachers of other nationalities available). So I asked why these teachers had to be Baltic. In response I was told that the involvement of Estonians and Lithuanians would help to make the new students feel ‘at home’. Such demonstrative gestures of neighbourly connectedness did not extend very far, though. It took well over five years for the school to appoint a professional, and hence highly visible, member of local staff whose first language was Russian.6 Whilst it seemed that the Latvians were happy to work for the Swedes, it appeared they drew the line when it came to co-operating with Russian-speakers. Students drew their own conclusions about lofty liberal ideology and the very real limits of organizational practice.

CURRICULAR DIRECTIVES So far this chapter has mainly focused on the implicit principles aimed at creating ‘agents of change’ that were applied at the Swedish school, that is, the hidden curriculum. The students, of course, still needed to master the ambitious Swedish educational programme. When I originally did fieldwork in Riga the undergraduate programme was taught intensely over two years (instead of the three and a half years it takes in Stockholm). Students needed to pass one or more examinations in 18 different course units in economics, management and business administration. Some courses lasted only a week, others stretched on for a maximum of six. Each course in accounting, business law, production management, finance, and so on brought with it a new set of demands, new lecturers and assessment types. This is fairly typical business school practice – students learn a wide variety of disciplines in a fast-paced environment. By means of such a relentless stream of courses related to various ‘disciplines’ and skills, students become managerial generalists. More importantly, they are supposed to learn how to cope with pressure and tight deadlines; thus the world of business is simulated. But this also means that critical reflection tends to be sidelined and, in Riga at least, there was relatively little integration between the courses. In any case, studying at the school was quite exhausting.

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This kind of standard Western business education is what transnational companies desire and what is faithfully being delivered in Riga. Students learned almost exactly the same subject matter as their Swedish counterparts. Even if they did not remember much of it once they successfully managed to pass their course, I would like to suggest that most students came to think of this generic teaching in neoclassical economics as the be all and end all. It represented the canon and the canon was absorbed. The imported Western textbooks and teaching materials, the principles and the theories, the methods advocated, the famous case studies, and the strategies, all of these had been proven to be effective, students were told. Thus they learned that these were the ways and means to ensure global corporate success. Because their time and effort was taken up with cramming and emulating those particular Western models, most students eventually came to think of local business practice as bad, illegal and clearly based on ignorance. Within the plethora of courses there was not a single one that looked critically or comparatively at the different kinds of economic systems or even capitalisms. Instead, students were inducted into a generic kind of managerialism. Moreover, students at the Swedish business school did not develop an in-depth appreciation of local context and the problems of local businesses within the transitional environment in which they were eventually expected to work. Rather, over time they became complicit with stereotypical classifications of companies and their practices. On the one hand, there were Western (or transnational) companies that were seen as forward-looking and prestigious while, on the other hand, local companies were considered backward and difficult.

OUTSIDE In terms of students’ ultimate destinations, the school’s benefactors had originally hoped that graduates would be devoting themselves to entrepreneurship and focusing on the transformation of former state enterprises on behalf of their countries (or at least this is how the school’s vision was originally stated). By 2004, however, most graduates worked in consulting, banking and finance. They were employed by transnational corporations, their local subsidiaries or in relatively small outfits that served these. Until recently, an important area of graduate activity was in audit itself (although due to the restructuring of the sector following the big scandals in the USA, auditing companies are no longer among the biggest employers). Early graduates earned on average around seven times as much as their Baltic compatriots.7 In 2004, some 15 per cent of the graduates lived outside the Baltic states. Most of them initially went abroad to study, which

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became a convenient way into employment abroad. In fact, the overwhelming majority of the graduates recognized that in order to make a career – or for their personal development – they would need to get out of the Baltic states sooner, later or at least temporarily (Timm, 2004). Having attended the Swedish business school made that much easier. According to Marceau (1989), business schools everywhere have a close association with transnational corporations for whom they produce a certain kind of labour. Historically, the growth of such companies has gone hand in hand with management education since the 1950s and 1960s. When enterprises began to grow rapidly through the transnationalization of economic activities there were new educative demands. The introduction of American-style practices into business led to the gradual professionalization of management (Marceau, 1989, p. 23). All this is to say that there is an indisputably snug, if not symbiotic, relationship between business schools and transnational corporations. The attraction of SSE Riga graduates in the heyday of the post-socialist transition is obvious – in an arena where nobody quite knows what is what and mafia rumours reign supreme – those that hold credentials (that is, are officially legitimated) from an internationally renowned Western institution are going to be particularly sought after. They are the ‘foot soldiers’ that are needed to ensure a post-socialist transition that is above all profitable for transnational corporations. Holding Western credentials here implies on the bearer’s part a familiarity with how things are done in the business world, an ability to read what is expected and the skill of translating between foreign investors and locals. It is not simply a matter of subjectspecific knowledge. This is, I suggest, where the practice, rather than the theory, of transparency is crucial. Scott notes that ‘through business school training and through the general corporate culture, managers are imbued with prevailing concepts of business practice, which are, in turn selected through an evolutionary process’ (Scott, 1997, p. 223). Here I have shown that business schooling in Riga is not simply a matter of being able to demonstrate ‘Western knowledge’ and concepts; it is not merely a matter of espousing managerialism. What students are confronted with at the business school – what they are supposed to learn and what they do ultimately manage to perform – are recognizably practices of transparency.

CONCLUSION By working through the notion of transparency, this chapter serves as a study of institutional power and organizational short cuts. It considers the

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success and failure of strategic social engineering efforts and concludes on the transmittability and transmutability of a specific morality. According to a recent school publication, in 1992 the principles guiding the Swedish task force for setting up a business school in Riga were to ●

●

●

●

[S]upport the economies in the Baltic countries by training students with excellent potential to become high-powered entrepreneurs and intrapreneurs and by creating a pan-Baltic school that would promote economic interaction between the countries. Create an equivalent of the Stockholm School of Economics in the Baltic region with the quality and level of the educational program, faculty and students on par with any Western business school [. . .]. Establish an independent school – not part of a local state university – in order to have the freedom to achieve the goals. However, the school needed to be recognized by the relevant official bodies in the three countries. Recruit on merit, using a combination of test results (similar to Graduate Management Admission Test [GMAT] and test of English as a foreign language [TOEFL]), interviews and grades in order to admit students with outstanding potential only, and avoiding being swayed by external pressures (Soviet style) or different grading systems in different schools. (Muten and Paalzow, 2004, p. 18)

In my own reading of its mission and activities, I would suggest that the Swedish business school was established in an effort to spread capitalist values, principles and techniques. For this purpose the educative process, including the curriculum transferred from Sweden, the Western faculty, the language (English), and the books imported from the West, are all important. But by setting up a special place for it, the organization does more than simply preach; it also embodies certain ideas. This is to say, the school’s presence, the particular built environment provided by the Swedish architects, the organizational routines and the hidden curriculum contribute vitally to the productive and reproductive processes within. In this chapter I have prioritized the latter in order to explicate the mechanisms and the forcefulness with which the new regime of transparency is being brought in. At the same time I have sought to attend to the students’ interpretations of that process. By being (or being seen to be) a transparent organization the business school is staking a truth claim. It appears to invite inspection and this willingness on its part provides certain assurance. Or, as Strathern puts it: ‘transparency of operation is everywhere endorsed as the outward sign of integrity’ (2000a, p. 2). Transparency, then, is central to the operation of the business school and the transfer of capitalism to the former Soviet

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Union. The Swedish business school seeks to position itself on the moral high ground vis-à-vis the murky socialist past and its unruly hangover in the shape of the black economy. On the basis of a transparent regime the business school ekes out a space, a platform for itself, its ideas and its products. Initially that place was a building with lots of glass, a curriculum, and so on. But like any educational establishment it is to bear fruit, to reproduce certain ideas, principles and practices by means of its products, its students. By graduating from the business school the students are in turn being certified as trustworthy, for they have emerged from a place that strives to eradicate the socialist past and heralds a modern era. In my analysis the business school functions for its students as a special kind of locus, as a primary reference point and as an all-important facilitator. Prior to their studies, few students had any tangible connections with major transnational corporations. It is only through their attendance that students are being equipped with a highly efficacious credential that grants access to such employers almost automatically. During the programme students become complicit with the means and objectives of the neo-colonial endeavour that perceives the Baltic states primarily as yet another emerging market, for even if students do not appear to pay too much attention in their lectures and classes, after graduation the vast majority of them work for transnational companies. The model and imperative of the transparent regime as proposed and enforced by the Swedish management of the business school is at the core of this process. Students must explicitly submit to it and they must learn to live with it (make their peace with it). Students adopt it, too for it is the key to their continuing professional success. However, as detailed above, this process of ‘submission’ is not fully complete. As students attend the school they are continuously reinterpreting rules and intentions. They use the school space, but in their own way and frequently for extracurricular purposes. They are performing group work, but through a process that no longer corresponds to the way it was originally prescribed. These differences must be teased out of the context if we are to fully understand what is going on in this organization. I suggest we look beyond the institutionally prescribed level of transparency and at the practices that construct and contradict that notion.

ACKNOWLEDGEMENTS This chapter is based on two sets of ethnographic fieldwork in Latvia. Original thesis research was conducted in 1996–98. It was augmented by a

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second stay in Riga in 2003–04. I acknowledge the financial support of the Economics and Social Research Council (UK), the Swedish Institute (SE) and of the Stockholm School of Economics in Riga (LV), which allowed me to pursue this research.

NOTES 1. Two recent edited volumes bring together ethnographic studies of transparency elsewhere (Strathern, 2000a; West and Sanders, 2003). 2. The Stockholm School of Economics opened a second branch abroad in St Petersburg in 1997. 3. The nature and reception of Swedish aid in Estonia is also described in Rausing (1998). 4. In Latvia, too, the creation of the school necessitated a special law. Since the school was to use English as the language of instruction, an exception had to be made, as according to Latvian law all higher education institutions in Latvia are obliged to use Latvian (that is, not Russian). 5. The business school is favourably compared by those in the know to another Swedish project in Latvia, the Riga Graduate Law School, which has been marred by financial difficulties from the start. 6. One Russian-speaking member of staff had in fact been hired before (in 1997), but he did not stay long. 7. At around 320 EUR, Latvia was the country with the lowest average monthly salary in the EU (the minimum wage is 120 euros) in 2004. At that time, those who graduated from the Swedish business school before 2000 were earning a gross monthly salary of about 2300 euros (Timm, 2004). This figure includes graduates residing abroad.

REFERENCES Bourdieu, Pierre (1996), The State Nobility: Elite Schools in the Field of Power, Cambridge: Polity Press. Marceau, Jane (1989), A Family Business? The Making of an International Business Elite, Cambridge: Maison des Sciences de l’Homme and Cambridge University Press. Muten, Leif and Anders Paalzow (eds) (2004), Stockholm School of Economics in Riga: A Retrospect 1994–2004, Riga: SSE Riga. Power, Michael (1994), The Audit Explosion, London: Demos. Rausing, Sigrid (1998), ‘Signs of the new nation: gift exchange, consumption and aid on a former collective farm in north-west Estonia’, in Daniel Miller (ed.), Material Cultures: Why Some Things Matter, Chicago, IL and London: University of Chicago Press, pp. 189–213. Scott, John (1997), Corporate Business and Capitalist Class, London: Hutchinson. Shore, Cris and Susan Wright (eds) (1997), Anthropology of Policy: Critical Perspectives on Governance and Power, London: Routledge. Shore, Cris and Susan Wright (1999), ‘Audit culture and anthropology: neoliberalism in British higher education’, Journal of the Royal Anthropological Institute, 5 (4), 557–76.

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Shore, Cris and Susan Wright (2000), ‘Coercive accountability: the rise of audit culture in higher education’, in Marilyn Strathern (ed.), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge, pp. 57–89. Strathern, Marilyn (ed.) (2000a), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge. Strathern, Marilyn (2000b), ‘The tyranny of transparency’, British Educational Research Journal, 26 (3), 309–21. Timm, Anja (2001), ‘Swedish space, “Western magic” and Baltic ambitions: the making of a Baltic business elite in Riga, Latvia’, in R. Stryker and J. Patico (eds), The Paradoxes of Progress: Globalization and Post-Socialist Cultures, Kroeber Anthropological Society Papers, 86 (Fall), pp. 165–79. Timm, Anja (2003), ‘The production of ambition – the making of a Baltic business elite’, unpublished PhD thesis, London School of Economics/London University. Timm, Anja (2004), ‘What happened to the students next?’, in Leif Muten and Anders Paalzow (eds), Stockholm School of Economics in Riga: A Retrospect 1994–2004, Riga: SSE Riga, pp. 138–49. Wedel, Janine (2001), Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, New York: Palgrave. West, Harry and Todd Sanders (eds) (2003), Transparency and Conspiracy: Ethnographies of Suspicion in the New World Order, Durham, CT and London: Duke University Press.

3.

The social life of brands: on choosing values for visions (and divisions) Raoul Galli

Whenever a culture is understood to be a collective phenomenon, it needs a sociology. When this sociology is left implicit, the danger is greater that it is a weak sociology. (Hannerz, 1992, p. 10)

Just a few minutes outside Stockholm city and alongside the sea approach to the capital lies a small area of buildings in strikingly different architectonic styles. These buildings house an unusually high concentration of corporate head offices, one of which belongs to a major Swedish company that also happens to be on ‘my’ advertising agency’s client list.1 Four representatives from the advertising agency are visiting this client today: the account manager, the planner,2 the assistant planner, and I, presented to the client as ‘a researching social anthropologist sanctioned by management to participate today as the agency’s assistant’. We shake hands and greet the client group of middle-range managers3 entering the assembly room. I have been previously informed that there are some managers expected today who are like ‘door-keepers’ concerning organizational changes, especially when it comes to branding – which happens to be the subject for the day – and that we have to be extra careful and convincing to really ‘get everyone on board now’; that is, on board a project intended to reposition this company vis-àvis its growing number of competitors, and to give it a new corporate brand strategy. This chapter deals with brands and branding. It is about social groups, the advertising agency and its clients, in their quality of being part of a struggle over symbolic and material resources asymmetrically distributed in their social world of primary interest. More specifically, the chapter aims at explaining the advertising consultants’ and their clients’ belief in the importance of knowledge as the royal road to ‘best performance’, which sociologically means acquiring resources, power, and the capacity to occupy a coveted economic, political, or cultural position. The quest for knowledge and power unfolds in the interrelation between the advertising 59

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agency and its client (the advertiser) as a continuous search for qualified information. On the advertising agency’s behalf this belief involves scrutinizing the client, its competitors, and existing or desired advertising message recipients – that is, consumers, voters, guests, visitors, members, and others, depending on how the advertiser addresses its target audience4 – for information that can ‘make a difference’.5 To dig deep into the ‘communicative problem’ that the client wants to have solved means optimally for the agency to get access to everything that can be of interest in its strategic work. However, this is also where desired transparency, or openness, may be halted owing to confidential matters, and at times even secrecy. To decide what must be revealed in relation to the advertising agency, and what ultimately should be to communicated in public, is an intricate balancing act for the advertiser. For the advertising agency, wanting access, trust is here a must. By way of introduction, I start with a short reflection concerning the prevailing ‘brand mode of thought’ in Sweden. The chapter then proceeds with what will constitute its empirical contribution, a description of some parts of the process of brand-building as they take place in so called brand-day workshops that are conducted by a well-known international advertising agency and some of its Swedish private and state-owned clients.6 As these workshops engage public organizations and I have been given permission to attend them, respecting confidentiality, my description is an anonymous concentrate and compression of material gathered on several occasions. In any case, it will provide some insight into these kinds of gatherings. I close the chapter with an attempt to understand the social uses of branding, its underlying principles of vision and division, and its capacity to reveal while veiling.

THE BRAND MODE OF THOUGHT In Sweden today there is a bewildering proliferation of the concept of ‘brand’ that indicates the level to which public discourse has come to assimilate a commercialese, a market lingua franca (Garsten, 2004, p. 84) now in use even in sectors that once almost formed their identity through resistance to everything that smelled of commercialism. For instance, when Kulturhuset, the Cultural Centre in central Stockholm – in the 1960s and 1970s a ‘cultural counter-power against the commercial life in [Stockholm] city’7 – recently invited television star Jamie Oliver (‘The Naked Chef’) ‘to “cook live in Sweden” for the first time’ (Lenas, 2003, my translation) – a culture journalist ironically remarked in a slightly dejected tone that ‘a stronger brand has not been seen at the Culture Centre since the Ikea

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exhibition’ (Lenas, 2003, italics added, my translation).8 And when Lars Nittve, formerly director of London’s Tate Modern and today occupying the corresponding position at Moderna Museet in Stockholm – also once a retreat for all kinds of ‘alternative’ souls in the capital – recognizes this shift in Swedish language and practice as a sign of the nowadays almost transparent barrier that separates the economy from the field of cultural production, he concludes: ‘Brand is a concept that has crossed a boundary, namely that between economy and art, a boundary that at least on the art world side, has had its guards’ (Nittve, 2002, p. 81, my translation). An Internet search for the word varumärke, which is the Swedish word for brand – although it originally, and still, also signifies what in English is meant by ‘trademark’ (see below) – reveals how the word is used in a variety of contexts. In addition to commercial producers’ and corporations’ use of the term in their marketing and communication terminology, the word pops up on web pages and texts dealing with non-profit organizations, governmental departments, municipalities, and universities and other cultural institutions. Such public agents and institutions undeniably and increasingly think of themselves in terms of brands. Advertising consultants are therefore currently working on branding things and ideas from clients that come from social fields as disparate as those of religion, science, music, sports, and state policy – in addition to their ordinary commercial business clients.9 But the habit of making social inscriptions, on livestock, humans, wares and goods has of course been going on for some time, although not always under the banner of ‘branding’. In a doctoral dissertation on brand management from Stockholm university, Uggla (2000, p. 74) notes that: ‘early signs of branding appeared in the Greek-Roman high cultures’, and quotes Adrian Room (1998) who has written a ‘History of branding’ on how, for example, various ways of promoting different producers were used in antiquity, for example through written messages or town criers announcing the arrival of ships with particular cargoes. However, modern branding is a phenomenon of the ‘nineteenth century and the industrial revolution through the use of individual brand names’ (Uggla, 2000, p. 74), and as such, the brand comes into use as a discriminator. Lexical definitions of ‘brand’ from inside the marketing field read: ‘identifying mark, symbol, word(s), or a combination of same that separates one company’s product or services from another firm’s. Brand is a comprehensive term that includes all brand names and trademarks’ (Imber and Toffler, 2000, p. 68); or brand is ‘a name term, sign, symbol or design or a combination of these, which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors’ (Koshnik, in Uggla, 2000, p. 74). In contemporary debates, however,

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‘brands are discussed in a wider context, beyond the level of product discrimination . . . the discussion of brands has come to include the management of psychological associations developed under a brand name from the manufacturers and consumers perspectives’ (Uggla, 2000, p. 75). In her critical bestseller No Logo,10 Naomi Klein (1999) describes the phenomenon of the brand idea proliferation as the result of a social process that has slowly but increasingly developed during the last two decades. According to Klein, in the mid-1980s some management theorists seriously started to develop the single idea that ‘successful corporations must primarily produce brands, as opposed to products’ (Klein, 1999, p. 3). This is a historical understanding that a leading authority in brand theory,11 JeanNoel Kapferer (1997, p. 15), confirms: ‘The 1980s marked a turning point in the conception of brands. Management came to realize that the principal asset of a company was in fact its brand names.’ Famous products or the corporation itself could thus be financially valued by the market far above their production costs in terms of labour, equipment, buildings, and land. Kapferer continues: ‘It is only recently that we have realised that its [the company’s] real value lies outside the business itself, in the minds of potential buyers. In July 1990, the buyer of Adidas summarized his reasons in one sentence: after Coca-Cola and Marlboro, Adidas was the best known brand in the world’ (Kapferer, 1997, p. 15). As this view grew strong, the concept of ‘brand equity’, that is, the financial value of a brand, also won ground (cf. Aaker, 1991). Know-how in building brand equity became the gospel for the day. During the 1990s, the interest in building brand equity was developed and fused with another concept gaining ground within management discourse since the 1970s – corporate culture, or corporate identity (see Garsten, 1994; Salzer, 1994). To create, and now also to manage and sustain increased (or ‘added’) brand value, or equity, economists and consultants started highlighting the importance of ‘brand identity’ (cf. Aaker, 1996; Grant, 2000; Kapferer, 1997; Lagergren, 1998). Uggla explains: ‘Briefly, the brand equity theorists approached the brand resource from an external perspective . . . In sharp contrast, the brand identity theorists concentrated on conceptualizing the meaning of the brand’ (2000, p. 10). Brand theorists thus became something of the anthropologists of marketing. Along with the idea of brand identity comes a battery of terms indicating that the brand mode of thought starts anthropomorphizing the brand, which soon has a personality and an identity, it even has a history and is indeed a living memory (Kapferer, 1997), the brand now stands for specific core values, it has a vision of what it wants to achieve, and a mission that justifies its activities. A brand is now the mediator between social agents, which on both ends (producer and consumer) are perceived by brand

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theorists and consultants as having more or less brand loyalty. The steady growth of this brand mode of thought has meant that gradually almost everything seems possible to fathom with this category of thought. Unfortunately, the translation of Swedish branding terminology into English loses some of its interesting local connotations. For example, the only Swedish term for brand, varumärke, is like its actual English equivalent, trademark, made out of a fusion of two words: namely märke (that is, ‘mark’), and an inflected form of vara (commodity, good, or item). The interesting thing about vara is that is has several meanings in Swedish, one of them being the term for the important verb ‘(to) be’. This means that with a slight change of one letter – from varumärke to varamärke – the Swedish word used for the English ‘brand’, suddenly connects the domains of economy, philosophy, social science, with its possibility of also standing for something like ‘mark of being’; a useful connotative detour when considering the uses of the brand mode of thought in connection with the idea of brand personality, and especially that of brand identity. The brand mode of thought that has been gaining ground both inside and outside economics is what the advertising agency is trying to both describe and practice in their brand-day workshops with clients.

THE CALL FROM WITHIN ‘It is all about living the brand’, a manager from the client company states.12 The brand-day workshop has just begun and the advertising agency’s planner is providing attendees with a broad outline of what branding in general is about, and how it will be used to help their organization to reach its objectives. Some participants, like the one just quoted, seem eager to show off their branding proficiencies right from the outset. Others, usually one participant in every workshop that I attended, take on the role of questioning everything and everyone coming from an advertising agency – especially if the client is a state-owned organization, or one recently privatized. The planner speaks quickly about the importance of corporate and brand vision, mission, core values, identity, thinking out of the box, target pictures and more. These full-day workshops, the planner explains, serve mainly two purposes. The first is to initiate a practice of more active consideration of the company as a brand.13 That is, to understand that ‘everything we do communicates who we are, what we stand for, and what we have to offer’. Secondly, the workshop gives the advertising agency a possibility of gathering organizational information that is difficult to obtain in other ways. The word ‘observation’ is not used here, but is certainly appropriate for one dimension of what the coming exercises involve for the advertising

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consultants. All in all, a brand workshop is an outcome of the advertising agency’s ‘call for “transparency” ’ (Garsten, 2004, p. 75ff) regarding its client, and built into that, an opportunity for developing the slow process of building and maintaining a relationship of mutual trust – a crucial asset wanting to effectively manage the simultaneous call for transparency ‘from without’; that is, from different kind of stakeholders and existing or future brand loyal agents (see Ind, 2003, p. 15ff). The day is divided into sections consisting of different exercises, all intended to elicit participants’ beliefs and hopes for the future of the organization, and therefore, for themselves. They are told to ‘switch off the structural brain today’, because ‘what we are here for today is to answer some questions about who we are, and, more crucially, who we want to be’. The chief planner of the agency team working with this client gives the initial instructions. The workshop participants are told that this day is part of the advertising agency’s characteristic method of working; that the agency is ‘a listening organization’, a gatherer of vast amounts of informative material about its clients by ‘looking deep into the client organization’ before drawing any conclusions, making any analyses, or working out any new creative and communicative ideas. We are told that: ‘Today, you will work, and we will listen, and guide you. Nothing is wrong. It is OK to have fun. And it is also OK to feel confused. What we are after, are new playgrounds!’ After a brief presentation of the agenda for the day, it is time to start. We are divided into groups consisting of four to six persons and shown to smaller rooms. The first exercise is to make a target picture. It means to choose the right properties for the organization’s average consumer (voter, member, and so on) and form a concrete picture of him or her. Such a picture is meant to support the managers, and later on, everyone in the organization in their relations with consumers in face-to-face situations, as well as in coming advertising campaigns. One person in my group has some difficulty understanding what this is supposed to be good for. ‘We already know who our target group is, why bother with the average person in that group?’ A colleague to the manager explains: ‘It is like having Luther on your shoulder, someone who watches over your doings.’14 The exercise resembles those that athletes do, where they visualize something, say, a race course for example, or call forth the moment when they will receive the gold medal on the winners’ stand. Little by little the group gets started. The statistically average consumer is known to all the managers in my group, but they agree that they would like to change this slightly; the new target picture should show a more updated person. Different proposals are being expressed, and soon a common ground is laid and then built on by all in the group, who seem very

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much in agreement: ‘I think it is a she; yes, about 35–40 years old; she lives in Västerås15 or perhaps Uppsala; she has two kids; her name is Sara; she is a teacher; she watches the news on public-service TV; her husband is a controller; he drives a Saab; she drives a Toyota; she makes about 20 000 to 25 000 a month;16 her husband makes about 45 000; her savings are in ethical funds; she listens to Kent;17 she uses a Nokia mobile; in the bathroom cabinet are brands like Colgate, Tepe, Bliw, Aco, and Biotherm; she works out at Friskis & Svettis; she wears clothes from Filippa K; she wears a wristwatch from Calvin Klein; she goes to Turkey on holiday.’ The advertising agency’s assistant planner, who is with us during this exercise, writes everything down in frantic hurry. This is precious raw material in brand-building. As mentioned, the statistical average consumer is known to the company. Research on target groups is sometimes conducted by the advertising agency, however, in the existing division of labour in the Swedish field of production of mass-mediated communication there are several institutes offering such research services. Pulling together vast amounts of data gathered through a variety of quantitative and qualitative methods, these firms analyse and evaluate almost all the behaviour parameters of social agents and offer clients ready-made social classifications for guidance in constructing the optimal target group. The classifications (or ‘segments’) then result in social labellings like: ‘working class youth; working class youth and immigrants; weekly press and coarse-ground coffee;18 educated young households; young singles with university education and on the move; cultivated pairs living in big cities, and successful immigrants; wealthy persons born in the forties having “insight” and “outlook” ’. The next assignment is to creatively think about a new vision for the organization. The vision is said to be ‘the answer to where the organization is heading; it should be an objective that is not really reachable – a desirable picture of the future’. Optimally it is a short, inspiring, and a somewhat bold claim for the future. One participant wants to discuss a vision proposal from the company management that is obviously already in circulation. The participant believes that a certain group of people, immigrants, are excluded from this vision, and that a new vision should explicitly include such a group. A discussion breaks out: ‘But of course they are included, it is just that they are not pointed out, nobody is, we are aiming at “everybody”.’ Different opinions are ventilated, and the temporary irritation soon seems to fade. The whistle-blower says: ‘OK, I will keep quiet; I will not say anything more.’ It looks like the majority has ruled in favour of its management. But the atmosphere is still tense. To inspire the workshop participants, the assistant planner projects some visions from internationally wellknown Swedish companies like IKEA and H&M onto the wall. As the

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vision exercise is very closely connected to the organization’s business concept, going into detail of what was said and done during the discussion is a bit problematic. By way of analogy, this is where transparency, in the sense of displaying anthropological data, meets confidentiality. However, I will give some anonymous examples of settled corporate brand visions from both inside and outside the agency I studied: ‘X brings good things to life; X enables people to provide themselves with a lifetime of prosperity; X makes Sweden healthier; X wants to create a new era; X shall be the natural choice for contact between people.’ Occasionally, organizations’ visions are difficult to separate from traditional slogans. The organization’s mission is closely connected to the vision; the mission, we are told, should be understood as ‘the answer to what we have to do to fulfil our vision, what we are possessed of, what we are burning for’. The notion of mission is also stated as ‘the organization’s raison d’être’, and is thus close to the idea of having a mission in life. Many organizations therefore publish their mission statements on home pages. The managers start working together to come up with and classify positive values that their colleagues and the company as a whole can embrace and that can build the foundation of core values for the organization’s vision and mission. Gradually the whiteboard is being filled with valuables: ‘confidence, fresh ideas, new thinking, quality, seriousness, dynamic, accessible, useful, inspiring, honest, flexibility, communication, closeness, modern, healthy, trouble-shooter, everyday hero’. After lunch we are ready to continue. Some middle-range managers are getting a little restless, though. ‘You know, actually, we haven’t got time for all this.’ But no one leaves, and soon everyone is back into illusio19 again. The next task is to classify things and phenomena that absolutely, and absolutely not, should be associated with ‘our brand’. The expression ‘our brand’, which in the workshops that I attended was indeed equivalent to the notion of ‘our organization’, can without diminishing things be said to simply mean us. We are told to make our classification with the repositioning of the brand in mind. ‘Do not just think “this is us; this expresses we who work here, the thing we have together, what we stand for” and so on. Think also, and perhaps even more, of what you want to be.’ My group is once again led to the smaller room, and the things and phenomena to be classified into ‘good’ and ‘bad’, or, again, ‘absolutely’ and ‘absolutely not’ are presented under six headings: newspapers and magazines; sports; cities and places; cars; humour and comedy; and animals. We start with newspapers and magazines which are both Swedish and international. Two are leading Swedish dailies, Dagens Nyheter (the leading morning paper, liberal), and Svenska Dagbladet (conservative). There is a magazine for children, Bamse (‘the strongest bear in the world’), and

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another primarily for teenage girls, Veckorevyn. The final two items are the international magazines Wallpaper (interior design), and National Geographic. The sports department consists of boxing, football, tennis, carracing (Formula 1), chess, ice-hockey, and running. The cities and places are Tokyo, New York, Stockholm, Paris, Moscow, Gnosjö (in Sweden, known for its ‘spirit of enterprise’), Sidney, London, Copenhagen, and Ibiza. The humour and comedy category consists mostly of Swedish humorists and comedians together with two that are internationally known, Charlie Chaplin, and Jerry Seinfeld. The different car brands are Volkswagen, Ferrari, Mercedes-Benz, Saab, Jeep, Citroën, BMW, and Audi. Finally, the animals worthy or not to stand for us are: eagle, shark, monkey, cat, horse, and lion. The group immediately starts conferring and tastes and distastes are soon manifested, and self-confident (and not so selfconfident) judgements expressed. The planner explains: ‘Do not think too much, try to follow your gut feeling, your first impression, and make your choices fast.’ Finally, when the best animal has been chosen, ‘criminal cities’ rejected, and favourite car brands selected, the two structural divisions of the classifiers’ positive and negative classifications look like this: Absolutely Familiar, flexible, fast, smooth, individualist, eager beaver, busy bee, fast, loyal, steady, nine lives, serious, fun, liable, kind, strong, exciting, free, king, hardworking, faithful, pride, friend, groups, together, Swedish, consideration, care, stubborn, soft, the big picture, in fashion, news, knowledge, business activity, scientific, money, fresh, professional, sharpness, analysing, clarity, feelings, high quality, the best, top of the line, trustworthy, cred, seriousness, goodness, strong, kind, competent, exclusive, passes the ball, folk sport, team play, no charge, entrepreneurial spirit, small-scale, vanity, style, class, emancipated, high-tech, open, free, wine, gastronomy, art, culture, style, challenging, charisma, hot city, beautiful, melting pot, design, form, action, verve, certain, not showy, class, upto-date, innovative, safety, modern, flexible, true, value for the money, crafty, insight into oneself, self-irony, popular, broad, not vulgar, intelligent, elite, finesse, smart, etc. Absolutely not Superficial, lonely, distasteful, no class, stupid, farce, vulgar, dirty joke, pathetic, old, big, expensive, bad quality, bad reputation, risky behaviour, exclusiveness, senile, old-fashioned, recession, far away, no challenge, unserious, Russian, criminal, threatening, grey, insecurity, bureaucratic, unique, elite, foolhardy, aggressive, cold, egoistic, primitive, brutal, hard-hitting, knockout, plastic, brain damage, gossip, everyday, mediocre, sensation-seeking, no intellectual challenge, empty head, horrible, disgusting, repulsive, no team player, pricking, angry, digs its claws into you, going one’s own ways, unpredictable, unexpected, etc.

Other interesting exercises worth mentioning are, for example, one based on the useful (and somewhat anthropological) practice of ‘thinking out of

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the box’, that is, placing oneself in other people’s positions, which is normally done by wearing T-shirts, caps, and other branded merchandise from successful businesses like Virgin and McDonald’s, and trying to imagine and visualize how they think, act, react, and so on. Another similar imaginative and visual game is the ‘future headline’ session, where the organization’s success has made it to the front-pages of the respected press, and the participants’ task is to recount what they did to make these headlines and how they did it; exercises intended both to make participants sensitive to other ways of doing things, and to mentally visualize future success. This quasi-ethnography will have to do for an understanding of the call for information as an incitement to ‘X-ray’, or better, to fluoroscope – following the Swedish verb commonly used to designate the act by which something is made transparent, genomlysa, roughly to ‘shine through’ – social groups for useful material in advertising production.

VISIBILITY AND DIVISIBILITY ‘No doubt they do construct their vision of the world. But this construction is carried out under structural constraints’, writes Bourdieu (1989, p. 18), proving himself reasonably in line with Durkheim and Mauss’s argument ‘that the cognitive systems operative in primitive societies are derivations of their social system: categories of understanding are collective representations, and the underlying mental schemata are patterned after the objective social structure of the group’ (Wacquant, 1992, p. 13). This twofold social reality presented in Primitive Classification (Durkheim and Mauss, 1963) has been extended in Bourdieu’s work to supply a more apt understanding of its expressions in contemporary and complex societies. Crucial for this theoretical development is the concept of habitus, which provides an explanatory link for the old but, according to Bourdieu, false dichotomy of structure versus agency, of objectivity versus subjectivity; or as Wacquant (1992, p. 13) formulates it: ‘Bourdieu proposes that social divisions and mental schemata are structurally homologous because they are genetically linked: the latter are nothing other than the embodiment of the former’. According to Bourdieu (1996b, p. 3) there exists a correspondence between social structures and mental structures, ‘between the objective divisions of the social world . . . and the principles of vision and division that agents apply to them’. If we accept that brand visions are also constructed under structural constraints, it is of interest to contemplate what brand visions generated by habitus – again, an outcome of social divisions or a ‘particular class of conditions of existence [that] produce habitus, systems of durable, transposable

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dispositions, structured structures predisposed to function as structuring structures, that is, as principles which generate and organize practices and representations’ (Bourdieu, 1990, p. 53) – can say about its producers and their products and practices. A copywriter (later converted to planner) explained to me: Many people think that the brand, as you indicate, is a kind of diffuse concept that ironically serves the ad agency’s interests (when it ought to be about the client’s business). As I see it, a great deal of our job is to make employees feel pride in their company and find meaning in what they are doing (other than the obvious selling and making people like a specific brand). During the six or seven years that I have been working, this internal aspect has become all the more important. It is no longer possible to draw the signature, if we may call it that, from within the company, but rather, it has become our job to write it. In that sense, our responsibility has grown, as has our authority, and we are no longer merely a supplier of advertisements.

Taking a closer look at this ‘writing brand’ activity will tease out pieces of the ‘principles of vision and division’ (Bourdieu, 1984, p. 547) from which the agency constitutes a special day of different tasks made to elicit useful social material upon which to build both imaginative and attractive public communication, and organizational identity. This close and firm gaze at branding from a privileged point of view (the observer’s) leads towards the merciless, though emancipating proposition that ‘nothing classifies somebody more than the way he or she classifies’ (Bourdieu, 1989, p. 19) for the reason that ‘points of view, as the word itself suggests, are views taken from a certain point’ (Bourdieu, 1989, p. 18). Take the target picture: the people from the agency know that the client’s view of its customers, (or guests, voters, visitors, and so on) is of crucial importance for successful brand-building. They know that by visualizing the target picture the client will infuse expectations into the picture; both regarding the futures of individual employees as well as the whole organization. What is important is that everyone’s point of departure is their own point of view, their own position. When a good atmosphere is created, the target picture will begin to take shape in a social space that, importantly, for the moment consists of this brand workshop, a day outside the usual routine, and linguistically somewhat secluded from the usual organizational vernacular. Optimally, the single participant will contemplate the social situation something like: Here am I, and here are my colleagues, my boss, my product managers, and here are the agency people who certainly charge us a lot but who also have a vested interest in our success. They are serious. So are we. We are doing this for our business (our mission), to do well in the future – and that means my future, too. For

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When the group reasons its way to the complete target picture, it also constitutes itself. The values and judgements projected on the target picture are, at bottom, the constructers’ own things that they appreciate and value. It is the group’s vision or view of the world, of people, of good and bad, of working life, family life, physical exercise, personal care, shopping, and so on, a view that characterizes sound people – people like us. In this way the target picture is always very like its creators in being a creation sprung out of their visions and divisions of the social world – a vision (and division), in turn, intimately connected with the specific position they occupy in social space, and its corresponding dispositions. Sometimes the target picture also resembles the advertising agency’s picture of the consumer group that it thinks the company will focus on. A group that is not too ‘price sensitive’ (priskänslig) – as, for example, ‘working class youth and immigrants’– but rather a group with slightly greater purchasing power (köpkraft, köpstark), that is, with more money to spend, because the business strategy is to reposition the brand from being a ‘smartbuy’ brand to become a ‘premium’ brand, to move it into a more luxurious division. ‘Smart-buy’, designates brands considered to be delivering good quality for a reasonable price and consequently attracting groups who ‘buy smart’. But why is this considered ‘smart’? Probably because most of them cannot afford a more expensive purchase, and the label bears an encouraging recommendation. So behind the smart-buyer we find a majority of earners of normal or average wage. In Sweden, that would be those who very roughly have to settle with furniture from IKEA and clothes from H&M, and cannot afford a Volvo any more, because all of Volvo’s brands have been lifted to the division (or ‘segment’) of premium brands. This means that Volvo owners nowadays belong to the premium class, that is, the group of people that today can afford this once central brand in the Swedish folkhem,20 in other words, rich people. Volvo might, according this logic, therefore be a suitable brand for the ‘cultivated couples living in big cities, and successful immigrants’, or perhaps even more so the ‘wealthy persons born in the forties having “insight” and “outlook” ’ – but less so for those labelled as ‘weekly press and coarse-ground coffee’. On this latter side of the social continuum, we have products called lågpris or ‘low price’; something that sounds quite good – if you have alternatives, that is. If you are without alternatives, and are constrained to buy ‘low price’ out of necessity, you inevitably become classified with those having low purchasing power, the ‘price-sensitives’. And from ‘low price’,

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‘low class’ is only a blink away. A social hierarchy ruthlessly crawls out of the brand terminology and tells us something about its principles of vision and division, a world constructed for products and services, and their corresponding and objectively existing social groups. And objectively, or ‘[i]n reality, agents are both classified and classifiers, but they classify according to (or depending upon) their position within classifications’ (Bourdieu, 1987, p. 2). These classifiers, both from the advertising agency and its clients, classify, like we all do, through their individual and collective habitus, the embodied product of ‘the patterned inertia and constraints of external reality’ (Wacquant, 1992, p. 13); through a ‘system of schemes generating classifiable practices and works . . . [and a] system of schemes of perception and appreciation (“taste”)’ (Bourdieu, 1984, p. 171). This way, the different choices of cars, newspapers and magazines, cities and places, comedians, and animals, with properties given, proper to associate with ‘us’ and ‘our brand’, were choices generated and organized very much through unconscious ways of perceiving and appreciating, visioning and judging, and thus making distinctions and divisions – as the planner said – not by thinking too much, but rather by following one’s ‘gut feeling’, resulting in the two categories of ‘absolutely’ and ‘absolutely not’. Which also underlines the fact that the planner’s recommendation to switch off the structural brain seems to have passed unnoticed; and that the recommendation itself underplays, or is unaware of, the working of binary oppositions that the exercise employs. The full result of these sessions, which has not been dealt with here, shows, for example, how two groups working in adjacent rooms can respectively settle for the monkey to be associated, and not to be associated with ‘us’ or ‘our brand’. In the first case, the monkey could ‘absolutely’ be associated with ‘us’ or to ‘our brand’ owing to its tendency to be ‘flexible’ and to ‘act quickly’; in the second case, the monkey could ‘absolutely not’ be associated with ‘us’ or ‘our brand’ because of the monkey being a ‘buffoon’, a ‘ridiculous’ and ‘unserious’ animal. ‘Having a native’s full command of the system of schemes’ (Bourdieu, 1990, p. 20) that are put to work in this associative exercise, this contradiction in outcomes is fully reasonable within the range of possible perceptions (visions, perspectives) and judgements appropriate to ascribe to monkeys. What is interesting – beside the possible anthropological curiosity that these managers actually are choosing totemic animals21 – is the fact that what would once be called ‘pre-logical’ thinking or ‘primitive’ logic in anthropology, here unfolds in the middle of a state-of-the-art brandbuilding workshop conducted between an internationally well-known advertising agency and a major Swedish company. ‘Thinking in couples’ or ‘by oppositions’ (Bourdieu, 1990, p. 20) should, according to Bourdieu, be understood as an elementary form of specification and not termed a

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pre-logical, but rather a practical way of thinking, and that is exactly the everyday mode of thought that the advertising agency wants to touch.

REFLEXIONS: THE SOCIAL USES OF BRANDED VISIONS Branding is (at minimum) a two-level politics; at the same time being about communication and secrecy – the latter perhaps most obviously in the form of the accepted concept of ‘trade secret’. In large organizations dependent on the full co-operation and loyalty of many employees, corporate branding is viewed by management as something to communicate to the outside world (of new or already loyal consumers, voters, and so on) as well as inward, towards the organization itself. The guiding principle of corporate branding and positioning can be formulated as ‘there shall be no ambiguity among the outsiders or the insiders of where we stand (position) and what we stand for (position-taking)’. This desire for absence of ambiguity, of course, is also an expression of the desire for control in a world perceived as uncertain. If going very far in corporate branding, in the sense of regulating norms, values, ethics, and so on, branding might be looked upon as a form of corporate totalitarianism and a wish for ‘world creation’; that is, for wanting something like ‘a world for us to act in . . . guided by our vision and our special mission; a world that does not hide anything’. This craving for control and visibility is to some extent valid for the receiving end of branded advertising too, although perhaps in a more reactive manner. As more or less involuntary consumers of advertising and branding, social agents are seldom totally trustful of advertising, and at times want to know more about the intentions and practices behind offers, smooth talk, and shiny surfaces. Accordingly, the term transparency is very likely to appear in these contexts, and with it – or in place of it – various supposedly positive connotations implied and associated with a discourse of information, visibility, and knowledge; that is, a discourse deduced from the episteme of the supposed eternal goodness in the ability to view, to see, and therefore to know, at the best, everything. A cluster of terms then comes to mind: again, information, and openness, illumination, insight, fluoroscopy, publicity, and also modernity, enlightenment, rationality, democracy – in contrast to a sea of negativity spelt secrecy, obscurity, darkening, shadowing, opaque, enchantment, (evil) tradition, and dictatorship (behind dark glasses). But is secrecy necessarily something evil, and should a thing like, say gossip, be for ever banned? Social secrecy can build strong alliances, and confidentiality, in some contexts like friendship, love, research, psychoanalysis, journalism, and business, is a point of honour. ‘Certain things will never

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be put on open view; they are shared in secrecy as part of a type of exchange that is different from the one that involves visibility’ (Baudrillard, 2003, p. 33). Advertising has to handle the risk that while conveying its public message, it leaks its sender’s more acute economic or political perplexities and ambitions. ‘Good advertising’, meaning the kind of advertisement that often receives the business’s consecrating awards, can be said to talk about something while talking about something else. It resembles the perfect metaphor, the one that manages to deliver exactly the message intended by way of (seemingly) talking about something completely different. The advertiser’s product, service, message, and so on (which by now might well mean the advertisers vision) will finally be communicated dressed up in the outcome – after art direction, copywriting, graphic design, and more – of the total work of branding. The crux is that the content to be communicated, has to be optimally communicated, and in competition with competitors also trying to communicate optimally; which simultaneously, due to the obvious risk of then exaggerating and thus destroying consumer interest, cannot be done in too brutish a manner (exemplified by the golden rule for every door-to-door sales(wo)man not to be too eager wanting to ‘exchange’). The social interest, or social libido, to exchange that resides behind all advertising production therefore requires a certain element of decorum. And this is where a cautious measure like branding comes into play. Through it, the people involved try to create a time lag in the relation between the brand-owner making the exchange offer and the brand buyer (or believer) receiving the offer, and (ideally) countering it by paying, applying for membership, voting, and so on. Counter to advertising that brutally shouts ‘Buy This Now’, careful branding is used as a means of trying to create an atmosphere of something else, something more ‘positive’, like friendship, kinship, mutual appreciation, respect. This, if achieved, creates a wholly different relation and situation for exchange – perhaps not even perceived as one of exchange, but rather like the relationship a well-known Swedish mobile phone company uses in its currently running commercials, a relationship ‘Between friends’.22 Even though friendship is deeply dependent on the involved parties to fulfil their ‘obligations’ – that is, to be watchful of the equilibrium in attention given to the other(s) – this is rarely what is really experienced by the phenomenon commonly perceived as ‘real friendship’ in which you can relax and let go of questions of etiquette and formality. As Bourdieu put it: [T]he operation of gift exchange presupposes (individual and collective) misrecognition of the reality of the objective ‘mechanism’ of the exchange, a reality which an immediate response brutally exposes: the interval between gift and counter-gift is what allows a pattern of exchange that is always liable to strike the observer and also the participants as reversible, i.e. both forced and interested, to be experienced as irreversible. (1977, pp. 5–6, italics in original)

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To conclude, even though brand-building and brand positioning by advertisers and advertising consultants is normally perceived as a means, among others, to ultimately reach ‘a larger share of the market’ and to ‘add value to the owners’, the ultimate objective in distinguishing brands lies in distinguishing not brands, but real people; that is, in distinguishing certain brand buyers from other brand buyers, as well as certain brand-owners from other brandowners. A dividing process, a process of classification, is put to work which simultaneously also can integrate those sharing the same distinction. A crucial thought in promoting specific values, and constructing social visions to capture specific target groups, is that this dividing process is thought to be achieved through the distinction of one brand from other competing brands. The social objective though, behind the economic euphemism of branding, lies not in distinguishing (or integrating) brands, but, again, real people. From the perspective of a brand-owner, a social life and social career involves having a job, ‘earning a living’, maintaining a lifestyle and a class position, and at all costs avoiding downclassing (Bourdieu and Passeron, 1979, p. 86ff), perhaps even switching classes upwards. This, however, also means having to compete with others with similar aspirations, and following similar (unconscious, rather than conscious) social strategies. In this sense the brand workshop is about constructing communicative meanings out of cherished values which will attract the right kind of target audience, while at the same time handling brand-owners’ and branding consultants’ more intimate realities of social standing and appropriate lifestyle. Corporate owners, as well as advertising agencies, continuously develop more or less conscious strategies to maintain or increase the value of their resources or capital, in competition within their own field and in relation to other occupational groups and class fractions whose composition of capital is different. Thus – to maximally compress a long process – branding and advertising is very much a capacity to ‘reveal while veiling’ (Bourdieu, 1996a, p. 4). Concerning the advertising agency, this double job means showing the advertising field – future clients, colleagues, competitors, prize award juries, and so on – its communicative skills through the successful work it does for its clients. This revealing is still somewhat veiled though by the agency showing necessary good manners boasting sophisticatedly in advertising journals and on home pages that economic and social success is embodied in its successful advertising and branding.23 Performing the social and confessional exercises in brand workshops displayed here should therefore also be seen as a more unthought, or doxic, ‘mechanism’ for market and other actors in the field of power to try to control and perpetuate not only brand competition and distinction, but also the more hidden and hierarchical dimension of already existing social distinctions and divisions – a considerable task if your lifestyle is dependent

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on substantial expenditure. The social anthropological challenge is to understand how social agents go about doing this ‘social work’ of positioning clients and themselves while simultaneously experiencing that what they are doing is nothing more than working hard in the both prestigious but often also despised advertising business. I have stated that brands and branding ought to be analysed from the outset of Pierre Bourdieu’s (1987, p. 2) assertion that ‘[a]gents are both classified and classifiers, but they classify according to (or depending upon) their position within classifications’. Reflexively, the same is true for the social anthropologist. The understanding put forward here of brandbuilding as ‘revealing while veiling’ is admittedly informed by having followed things from a specific social position and point of view which have created the object and the analytical standpoint presented. This classifies my argument into its objective position in social space, and so helps make more transparent the full struggle over the objective reality of these smooth social operators of distinction, called brands.

ACKNOWLEDGEMENTS This project was funded by The Swedish Research Council, through the project ‘Fashioning markets: accountability and transparency in the global marketplace’.

NOTES 1.

2. 3. 4.

5. 6.

This chapter is written from empirical material gathered during year-long fieldwork conducted in an international advertising agency in Stockholm, Sweden, in 2003. The agency’s name is TBWA – an acronym representing the four agency founders: Bill Tragos, Claude Bonnage, Uli Wiesendanger, and Paulo Ajroldi, who started the business in Paris, France, in 1970–71. Today, the head office is on Madison Avenue, New York, and the ‘network’ of agencies reaches almost 80 countries on all continents. Some of TBWA’s global clients/brands are Apple, Absolut Vodka, Sony Playstation, Michelin, Nivea, and Nissan. The Stockholm office opened in 1997. In Sweden, the planner is also called strategist (strateg). The managers’ ages vary within the middle age span, and their gender is of relatively even distribution. Because of the range of different advertisers consulting the advertising agency – commercial producers, political parties, interest group organizations, non-profit organizations, and so on – the different ways of addressing the individual or group in the target audience are quite marked. I am grateful to my colleague Victor Alneng, for alerting me to Gregory Bateson’s definition of information: ‘difference that makes difference’. Sir Michael Perry, chairman of Unilever, says: ‘Take a look at government advertising, and government has for many years been one of the very biggest advertisers in the United Kingdom. . . . Ah, yes, say the critics, but that isn’t advertising . . . What

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nonsense. Of course, social advertising, public service advertising – whether it’s for drinking and driving, social benefits, AIDS or public information of any kind – is advertising, and often state of the art advertising at that’ (Advertising, 2002, p. 36). 7. www.kulturhuset.stockholm.se/default.asp?id=1439, accessed 21 January 2005. 8. The appropriateness of the IKEA exhibition in this cultural context was at the time widely questioned in Swedish newspapers’ culture pages. (IKEA is a sponsor of the cityowned Kulturhuset.) 9. TBWA in London has had the British (New) Labour Party as client, and TBWA in Stockholm currently works with the Swedish (social-democratic) government’s Social Ministry, and the Swedish liberal party, Folkpartiet liberalerna. These clients’ communication is at root handled the same way as other brands. The same goes for the general branding of municipalities, churches, museums, art galleries, and non-profit organizations. (See also note 6.) 10. Interestingly, this brand critical study is both carefully read and quoted among Swedish advertising and branding agents. See for example Jäfvert (2003, p. 230) and (Ind, 2003). 11. According to my planner informants at the advertising agency, and confirmed by Uggla (2000, p. 84). 12. Incidentally, a brand management book exists entitled Living the Brand: How to Transform Every Member of your Organization into a Brand Champion (Ind, 2001). 13. The brand-building process though, is but one element alongside others in the advertising agency’s total service offer which, for example, includes business strategy, communication strategy, public relations, art direction, copywriting, and graphic design. Optimally, the elements reinforce each other. 14. Martin Luther, the fifteenth-century monk and church reformist. It is common in Sweden to refer to Luther when talking, often in a self-reflective and somewhat ironic manner, about work ethics, and of duty. ‘Luther’ is in this case something of a euphemism for an internalized panoptic (God’s) eye. 15. Västerås is a small industrial Swedish town in Stockholm’s vicinity. 16. Swedish crowns, that is. (1000 crowns are roughly about 900 euros.) 17. One of Sweden’s most successful rock groups; they originate from Eskilstuna, a neighbouring town to Sara’s (or Catherine’s) Västerås. 18. This combination of a specific kind of coffee, associated among my informants with old times and rural conditions, together with interest in the ‘weeklies’, carried an implicit meaning of ‘low-educated, working-class women’. 19. ‘Illusio is the fact of being caught up in and by the game, of believing the game is “worth the candle”, or, more simply, that playing is worth the effort’ (Bourdieu, 1998, pp. 76–7). 20. Folkhem (‘people’s home’) is a historical and strongly value-laden term for the Swedish welfare state, mainly built on the ideology of the Swedish Social Democratic Party. 21. This, however, is not so unique. All Swedish political parties represented in the Swedish parliament, have, for example, well-chosen (well associated, that is) flowers as their totem, or brand, sign. 22. www.tre.se/templates/SubscriptionPlanStart.aspx?id=1418, accessed 29 June 2005. 23. The extensive coverage by the Swedish trade journal Resumé of the social rather than the businesslike activities around the advertising business’s annual Cannes Lions awards, on the French Riviera, suffices as an example of this important dimension of the social life of branding.

REFERENCES Aaker, David A. (1991), Managing Brand Equity. Capitalizing on the Value of a Brand Name, New York: Free Press. Aaker, David A. (1996), Building Strong Brands, New York: Free Press.

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Advertising (2002), World Federation of Advertisers, European Association of Communications Agencies and United Nations Environment Programme, www.eaca.be/default.asp?s=Documentation&sb=CSR, accessed 20 December 2003. Baudrillard, Jean (2003), Passwords, London: Verso. Bourdieu, Pierre (1977), Outline of a Theory of Practice, Cambridge: Cambridge University Press. Bourdieu, Pierre (1984), Distinction, Cambridge, MA: Harvard University Press. Bourdieu, Pierre (1987), ‘What makes a social class? On the theoretical and practical existence of groups’, Berkeley Journal of Sociology, 22, 1–17. Bourdieu, Pierre (1989), ‘Social space and symbolic power’, Sociological Theory, 7 (9), 14–25. Bourdieu, Pierre (1990), The Logic of Practice, Stanford, CA: Stanford University Press. Bourdieu, Pierre (1996a), The Rules of Art: Genesis and Structure of the Literary Field, Stanford, CA: Stanford University Press. Bourdieu, Pierre (1996b), The State Nobility: Elite Schools in the Field of Power, Cambridge: Polity Press. Bourdieu, Pierre (1998), ‘Is a disinterested act possible?’, in Pierre Bourdieu, Practical Reason: On the Theory of Action, Cambridge: Polity Press. Bourdieu, Pierre and Jean-Claude Passeron (1979), The Inheritors, Chicago, IL: University of Chicago Press. Durkheim, Émile and Marcel Mauss (1963), Primitive Classification, London: West and Cohen. Garsten, Christina (1994), Apple World. Core and Periphery in a Transnational Organizational Culture, Stockholm Studies in Social Anthropology, 33, Department of Social Anthropology, Stockholm University, distributed by Almqvist and Wiksell International. Garsten, Christina (2004), ‘Market missions: negotiating bottom line and social responsibility’, in Christina Garsten and Monica Lindh de Montoya (eds), Market Matters: Exploring Cultural Processes in the Global Marketplace, Basingstoke: Palgrave Macmillan, pp. 69–90. Grant, John (2000), The New Marketing Manifesto: The 12 Rules for Building Successful Brands in the 21st Century, London and New York: Texere. Hannerz, Ulf (1992), Cultural Complexity, New York: Columbia University Press. Imber, Jane and Betsy-Ann Toffler (2000), Dictionary of Marketing Terms, New York: Barron’s Educational Series. Ind, Nicholas (2001), Living the Brand: How to Transform Every Member of your Organization into a Brand Champion, London: Kogan. Ind, Nicholas (ed.) (2003), Beyond Branding: How the New Values of Transparency and Integrity are Changing the World of Brands, London and Sterling, VA: Kogan Page. Jäfvert, Kjell (2003), ‘Du får ett övertag när du satsar hårdare på ditt varumärke i lågkonjunkturen!’, in Business-to-Business Pocket, Stockholm: Dagens Industri. Kapferer, Jean-Noel (1997), Strategic Brand Management: Creating and Sustaining Brand Equity Long Term, London: Kogan. Klein, Naomi (1999), No Logo: Taking Aim at the Brand Bullies, New York: Picador. Lagergren, Håkan (1998), Varumärkets inre värden, Göteborg: ICT Education. Lenas, Sverker (2003), ‘Den nakna kommersen på snabbvisit’, Dagens Nyheter, 11 June.

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Nittve, Lars (2002), ‘När gränserna suddas ut: närmandet mellan konst och kommers’, in Ingalill Holmberg and Mats Wiman (eds), En varumärkt värld, Malmö: Liber Ekonomi. Room, Adrian (1998), ‘History of branding’, in Susannah Hart and John Murphy (eds), Brands: The New Wealth Creators, London: Interbrand Macmillan Business. Salzer, Miriam (1994), Identity Across Borders: A Study in the ‘IKEA-World’, Department of Management and Economics, Linköping University. Uggla, Henrik (2000), Managing the Brand Association Base, Department of Business Administration, Stockholm University. Wacquant, Loïc (1992), ‘Toward a social praxeology: the structure and logic of Bourdieu’s sociology’, in Pierre Bourdieu and Loïc Wacquant, An Invitation to Reflexive Sociology, Chicago, IL: University of Chicago Press.

4.

The naked corporation: visualization, veiling and the ethico-politics of organizational transparency Christina Garsten and Monica Lindh de Montoya

INTRODUCTION: TRANSPARENTIZING THE CORPORATION Corporations are a peculiar type of social organization. Designed to reveal, but just as much to conceal, the corporation is something of a Janus-faced figure. One of the more significant activities that corporate managers engage in is attempting to control what is revealed and what is concealed, what information and knowledge flows across the boundaries of the organization, and who receives access to particular information. The transparency of a corporation may be something of a new addition to the corporate agenda, but is by no means a new problem. Rather, it is a classic problem thoroughly tied in with attempts at organizing and managing. Secrecy and concealment imbue the corporation with excitement. From the outside looking in, we can imagine that lots of interesting stuff is going on in the corporate cubicles. Creative minds are at work, huge resources are being moved around and new innovations being crafted. These activities are not for everyone to see. Indeed, entrepreneurial activity frequently depends on balancing elements of secrecy and confidentiality; be it in business concept, product design, or company strategy and organization. In research and development, information about new products is rigorously kept secret from competitors. Corporations are often reticent about providing information about suppliers, production prices, labour arrangements and new products in the pipeline because it might rob them of their competitive edge. New recruits in organizations often have to sign agreements of confidentiality, as a condition of employment. Key employees sign contracts prohibiting them from revealing information about aspects 79

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of the company or their work for it without prior approval, and forbidding them to work for a competitor, sometimes even for years after leaving the company. Employees then agree not to reveal aspects of the organization that are considered to be competitive advantage, discretionary, or otherwise unsuited to outside scrutiny. At times, the confidential may also involve issues that are unethical, unlawful, or which would for some other reason lead to negative reactions and perhaps sanctions from the outside. We know these stories through media reports on the avalanche of corporate accounting scandals around companies like Enron, WorldCom, Scandia or Tyco that have periodically rocked the markets.1 But a corporation is also designed to reveal. The organizational structure of the corporation is depicted and visualized in charts, policy documents and through presentations of various sorts. Processes and procedures are made visible and understandable through internal meetings and documents and through public relations and media reports. Through its corporate vision and brand (see Galli’s chapter in this volume) some of the core values and aspirations of the corporation are displayed for consumers and stakeholders. And, not least, through numbers, calculations and statistics in yearly reports and other documents, the financial status, development and dealings of the corporations are manifested. To ‘open the books’ through a carefully scripted audit process is a universal and mandatory ritual in corporations. The many positions geared to the management of information, such as ‘public relations manager’, or ‘public relations officer’, are also signs of the significance of revealing information in corporations; indeed, one of the most serious afflictions a corporation can experience is reputational damage. Great care is taken to diminish the risk of such damage, which might seriously harm the brand and the image of the company. Employees are taught how, when and with whom to share corporate information, when to copy sheets of paper and email communications, forward important information and the like. Not least, the technologies of ‘performance evaluation’, at individual as well as collective level remind us that what is valuable is also visible and measurable. The power of revelation is perhaps most evident in situations of crisis. Often, the deepest outrage towards executives is expressed when it is known that they have being trying to keep the public in the dark even after a scandal is an established fact. The best way to tackle lost confidence after allegations of unethical behaviour such as an accounting fraud is often considered to be to plead guilty and to invite external scrutiny. Transparency appears to be a powerful remedy for corporate scandals of various kinds, and serves to illustrate that the one who utters the word has nothing, or at least little, to hide. Enhancing transparency on certain issues can restore confidence in the organization and in its managers, and rebuild the legitimacy that was lost.

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The more we are permitted to see, it seems, the more likely we are to believe and trust the actor under investigation. Those who are outside of, and dependent on, an organization may quite legitimately feel that they are being ‘kept in the dark’. Knowing what to reveal and what to conceal, when to do so, and to whom, is of utmost importance. An important part of organizational life consists of handling information in a way that balances secrecy and confidentiality with openness and sharing. There are many examples of managers or employees who have had to leave corporations after revealing too much or too little, to the wrong party, or at the wrong time. Balancing revealing and concealing is an activity of utmost importance, and a faulty step can have devastating consequences. Transparency, then, is about boundary-work as much as it is about power. Our interest in transparency in relation to organizations has to do with the fact that social transformations at large have brought forth significant challenges in the governance of corporations and other market actors. Globalization has significantly weakened the influence of the nation state over transnational corporations and the flow of resources. The institutions established to control the dealings of corporations are not fit to oversee the implementation of existing sets of rules, and there are areas in which existing regulations are insufficient to ensure a reasonable degree of accountability. There are also instances in which a ‘ring-fencing of liability’, through, for example, outsourcing, provides companies with a way to steer away from adherence to international regulations. We are facing a ‘regulatory gap’, in which hard measures such as law and directives are having a difficult time, and in which ‘soft law’, in the form of voluntary standards, codes of conduct and policies are being established.2 Over the past two decades, we have seen a boom in the establishment of codes of conducts, social standards and the like which are meant to promote openness, transparency and accountability in organizations. Likewise, the significance of transparency and accountability is manifested in yearly reports, in which examples of the measures taken and illustrative examples are provided, conveying the image of the audited organizations as responsive to stakeholder demands, adhering to democratic norms and as guided by ethical considerations and standards. ‘Corporate social responsibility’ has gained a hold on the agenda of corporations as well as non-governmental organizations and state agencies, suggesting that today’s global business landscape requires companies to develop responsible business policies and practices and make them an integral part of their mission, values, strategy and operations. To successfully navigate a set of economic, environmental and social challenges they must address stakeholder demands for greater transparency, accountability and responsibility.

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Moreover, corporate social responsibility is seen to affect all aspects of business operations – from supply chain to marketplace and from employee productivity to investor return. The notion of ‘Corporate Citizenship’ is also a recognition that the corporation has social, cultural and environmental responsibilities to the community in which it operates, as well as economic and financial duties to its shareholders or immediate stakeholders.3 Transparency is generally regarded as a measure to come to terms with the need for improved openness and communication to better meet responsibilities to all stakeholders, and effectively, to achieve. The changing global landscape of economic operations thus involves the fashioning of new forms of control and surveillance of its actors. New forms of control create accountability and legitimacy through sets of norms that to a large extent have to do with transparency, with rendering organizational processes visible, observable and subject to judgement (see also the chapters by Hasselström, Grossman et al. and Yenkey in this volume). Transparency itself becomes a criterion of organizational progress and health. Arrangements aimed at enhancing transparency render decisions and actions amenable not only to numerical, but to ethical evaluation. They serve at once to signal auditability and responsibility. Michael Power (1997) suggests that technologies of audit are ‘technologies of mistrust’ (see Rose, 1999, pp. 154–5). Facts, figures, indicators and various kinds of reports are often thought to counter insecurity and lack of trust and to provide a robustness and degree of facticity to events and procedures. But rather than addressing and diminishing mistrust and suspicion, such endeavours may amplify points where doubt and suspicion can be generated (Rose, 1999, pp. 154–5). More transparency can lead to more suspicion. That an organization engages in efforts to enhance transparency does not mean that trust and confidence are simply restored. If anything, attempts to make visible and lay bare organizational practices, ideas, motives and the like, are likely to lead to more and intensified attempts. There is no obvious point at which transparency projects reach completion. In this chapter, we aim to show some of the ways in which the call for transparency is manifested in corporate life. In particular, we are interested in transparency as an organizational goal, a normative statement of a desired direction. The direction towards which processes of transparency aim is one of openness, visibility and legibility. More so, it involves notions of cleansing and moral restoration. We take transparency to mean openness, visibility and legibility. But transparency as it appears in the world of business is also an imperative to act; it involves a pressure to reveal, to cleanse and to manifest integrity. Hence, transparency makes up an assemblage of normativity that mobilizes actors to respond in certain ways. The assumptions and practices that go along with transparency are designed to gain trust in the

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corporation and at the same time to control social practices, ideas and the flow of information. Transparency urges us to think ethically in certain ways, and as such, transparency and the practices and technologies that support it are part and parcel of what Rose calls the power game of ‘ethico-politics’ (Rose, 1999, p. 188). Whilst Rose is focused on the ‘self-techniques necessary for responsible self-government and the relations between one’s obligation to oneself and one’s obligation to others’ (italics in original) at the level of the individual, we are here more interested in the ethico-politics of organizations as collective actors, and the reworking of organizational actors towards responsible government and enhanced accountability. What exactly counts as good, ethical behaviour and responsible action is up for grabs, and subject to negotiation and contestation. It is this very polysemy of the concept of transparency that makes it such a powerful normative device.

‘CLEAR PROGRESS’: TOWARDS THE FUTURE Many eyes are now fixed on the corporation. Businesses are under pressure to demonstrate responsiveness to the wider environment in which they operate and to stakeholders with an interest beyond the bottom line. To show ‘good corporate governance’, in the sense of having a well-functioning system of corporate direction and control, is closely tied to enhancing transparency in corporate processes. Good corporate governance is essential to help ensure transparency in the conduct of private business, just as a degree of transparency is vital to achieve good governance. By making sure there are effective controls and greater transparency in their actions, corporate actors can help fight corruption in which money, gifts or other forms of inducement are provided or promised to achieve certain advantages. Transparent corporate rules and practices are seen to provide a rational base on which investment and business decisions can be made and save resources that may otherwise line the pockets of public officials or corrupt business people. Effective corporate governance, with a system of internal controls, checks and balances and independent external verification can thereby minimize risks of reputational damage as well as illegitimate use of resources.4 Transparency, with sibling terms like accountability, provides tools for making the corporation responsible. Enhanced transparency signals that the corporation is taking its social responsibility seriously, and that there are no skeletons in the closet. The facticity of numbers and indicators of transparency produces an apparent objectivity to reports and documents (cf. Porter, 1995; Rose, 1999, p. 208). That transparency is used as part of the crafting of the image of the corporation is shown in the many advertisements in which the term figures.

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‘Clear progress’, as in the subheading above, was the heading of an ExxonMobil advertisement in The Financial Times (9 October 2006). The advertisement is built around the strength of transparency and ExxonMobil’s involvement in enhancing transparency. An extract from the (rather long) text message reads: Clear progress Transparency can promote better natural resource management It’s called the ‘resource curse.’ Some believe that countries rich in oil and other natural resources are destined to suffer from high poverty rates and other problems due to poor government policies and practices. In fact, when managed properly, natural resource wealth is a blessing, not a curse, capable of benefiting producers and consumers the world over.

To this end, the Extractive Industries Transparency Initiative (ETI) is encouraging governments to disclose the revenue they receive from oil, gas and mining. This transparency improves governance, and helps make leaders more accountable for how they spend the country’s revenues. ExxonMobil is proud to support ETI. It is part of our commitment to sound corporate governance and high ethical standards wherever we conduct business. Transparency – along with the rule of law, civil liberties and a strong public voice – can help combat corruption and spread resource wealth. Disparaging the resource itself is not the answer. Promoting better management of it through greater transparency is.

There are many similar examples. As we can see, transparency here provides a narrative around which corporations can build an image of themselves and their position in the world. It provides the backbone of a storyline in which the corporation figures as a responsible and ethical actor. Transparency gives direction to endeavours otherwise disconnected to the corporate bottom line, such as the spread of resources, high ethical standards and sound natural resource management. It is a well-known characteristic of corporations that they tend to be forward-facing and future oriented (see, for example, Garsten, 1994; Höpfl and Linstead, 1993). The idea of progress, in connection to growth, is central to any business endeavour. When paired with progress and a forward-facing scenario, concepts like transparency become even more powerful as organizational ideals. Transparency combines the element of just and open governance with notions of development and change. Transparency thus aligns itself with the future, so to speak. This is very evident in the microfinance industry, which is now in the process of ‘going mainstream’ and attracting the attention of international

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finance capital. Having proven that small loans to otherwise ‘unbankable’ people are an efficient tool in fighting poverty, the next challenge for the microfinance industry, according to multilateral agency experts, is to expand the number of clients they can serve and to ‘reach down’ to lend to even poorer groups. In order to do so, microfinance institutions (MFIs) need to streamline their operations to cut costs, achieve sustainability and submit to international rating and ranking procedures so that their creditworthiness can be assessed by prospective large funders. Microfinance institutions that want to be able to grow and serve more micro-entrepreneurs in the future thus need to open their organizations to minute scrutiny and measurement carried out by professional consultants who collect necessary information from within the organization in order to calculate a series of indicators. Efficiency, as measured in return on capital and in daily lending routines (such as how many clients one loan officer can serve) is highly valued in such assessments; here, it is not a question of reaching the greatest profits but of making the best possible use of donor funding, which by definition comes from public sources – someone’s taxes. Smaller or less well-run organizations are encouraged by donors to merge with those that are stronger and to adopt ‘state-of-the-art’ practices if they want to stay in business, as funding is thought likely to be channelled increasingly to the most competitive organizations, which are also those most likely to be attractive to commercial finance. Here, then, ideas of accountability and transparency coupled with particular pro-growth visions of the future of microfinance held by actors in central economic and political nodes (the World Bank, the United Nations) reshape patterns of work and emphasize ways of representing achievement in these missiondriven grass-roots organizations. Women’s World Banking, an NGO that focuses on expanding access to loans for women, specifically searches worldwide for MFIs that are anxious to grow, carefully examines their resources and ability to expand quickly, and provides those chosen with the support they need to become the leading MFIs in their regions, with a high rate of growth and healthy ranking figures. Thus ‘opening up’ and accounting carefully for organizational ideals, practices and financial achievements (or challenges) are coupled with both sustainability as an organization and progress in meeting organizational goals or fulfilling the institutional ‘mission’.

VOLUNTARY VISIBILITY, FORCED SCRUTINY As noted above, transparency is part of a voluntary battery of tools aimed at softly governing the organization. By voluntarily disclosing corporate

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decision-making procedures, resources, ‘golden parachutes’ and the state of financial accounts, the corporation can proactively escape the more forceful intrusion of the eye of the state. Voluntary disclosure also signals the willingness of corporate actors to communicate to the outside world, and to invite the outside world to see. The element of volition is an important aspect of the discourse and practice of transparency in corporations. In Florini’s (2003, p. 32) words: Transparency means deliberately revealing one’s actions so that outsiders can scrutinize them. This element of volition makes the growing acceptance of transparency much more than a resigned surrender to the technologically facilitated intrusiveness of the information age. It is a choice, a potential standard for the way powerful institutions [as well as individuals, authors’ addition] ought to behave.

Corporate actors engaged in transparency often make a strong case out of the voluntary base upon which their engagement is built. Making it explicit that they have chosen to respond to calls for greater transparency works to strengthen their legitimacy and the trust they can gain from the outside world. One example of this is the Swedish company Gambro, which has made the topic of ‘risk transparency’ an important feature of their yearly report. In 2005 Gambro was awarded the Risk Transparency Award by the consultancy Ernst & Young. The award is given on a yearly basis to companies that are seen as good role models and provide good examples of how risks can and should be reported. The jury reasoned as follows: Gambro AB presents a wide-ranging and thorough report on the structuring of the company and analysis of its risk exposure. In its yearly report the company has given a detailed description of the risk management tools the company makes use of, and of what risks that are external to the control of the company. – We appreciate the award very much. We are many within Gambro who have put efforts into these issues, says Lars Granlöf, CFO at Gambro. (www.gambro.se/Pages/InfoPage.aspx?id=8657, accessed 20 October 2006, our translation.)

The element of volition may sometimes be ever so coercive, however. Strathern (2000) speaks of ‘the tyranny of transparency’ as she writes about the world of accountability in higher education; of the techniques for assessing, auditing and evaluations. In the corporate world, too, there is a forceful side to transparency. Most organizations today are faced with this tyranny of transparency, and have to balance voluntary visibility with forced scrutiny. Even though transparency on all accounts may not be obliged by law, it may well be pushed forth by media and public pressure or through branch organizations.

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It should be noted that meeting such demands also involves economic costs. Report-writing and the management of information takes time and energy, and can be particularly onerous in small organizations. In discussions with microfinance institutions in Bosnia-Herzegovina (Lindh de Montoya and McNeil, 2003), Monica noted complaints concerning the many hours spent on generating reports for numerous funders, and the problems of accounting for the destination of funding that was tied to particular social groups. For example, some funders may support loans for women, other loans for agriculture, others loans for demobilized soldiers. As the microfinance organizations sought to lend to as many loan-seekers as possible who meet their economic criteria, reports were by nature constructions produced after the fact to fit in with the particular ‘strings’ attached to the funding. When seeking funds for on-lending, reporting requirements were a consideration. Similarly, larger banks in Bosnia-Herzegovina noted that they had to employ several people to produce the numerous ‘anti-money-laundering’ reports and documentation required by national ministries and multilateral international entities (Lindh de Montoya and Tanovic, 2003). The critics of voluntary approaches argue that transparency in corporations may turn into a formal and ritualized ‘box-ticking exercise’, devoid of any sincere commitment to transparency and accountability. Practices of reporting on transparency – both voluntary and required – run the danger of becoming smokescreens behind which murky, unethical practices may continue unabated. Or, they may function as ‘lightning rods’, directing attention to some practices that are voluntarily opened up for observation, whilst veiling others that are less appropriate for the spotlight (Garsten and Hernes, 2008). It is in relation to the forced voluntariness of its associated practices that we may understand the new power games and forms of control that the discourse and its associated technologies bring about. The discursive grid of transparency opens up new arenas for inspection and intervention, and creates new subjects for scrutiny. Corporate practices that were previously of little interest are now at centre stage of public attention. Managers have to reflect on how to deal with the public eye and, if they want to climb the career ladder, make sure they do not have too much to hide. In this arena, narratives of transparency are often tuned towards the ethical, and towards personalized integrity and moral standards.

CLEANSING AND FLUSHING THROUGH As stated above, transparency may appear to come in neutral guise, and to bring about objective facts and figures. However, there is nothing neutral

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about transparency. Rather, it is part of a normative assemblage of terms and tools, indicating a certain directionality. In corporations, this normative, or moral, dimension of transparency is often quite evident. It figures in practices of ‘morality testing’ of new candidates, in the moral language of yearly reports, and in public statements on contributions to ‘doing good’. Not least, it urges corporate managers to reflect on, and take a stance regarding, what ought to be made visible and what ought to be veiled, and to consider the legitimacy of their choices. Transparency then takes on a personal dimension, as something to which each individual must relate and respond. Similar processes have been noted in the work on selfdiscipline in the workplace and the consequences of new forms of international regulation (such as the ISO 26000) in a number of occupations from the world of finance (Zaloom, 2005) to the meat-packing industry (Dunn, 2005). Workers are increasingly subject to having their work monitored and are being obliged to work utilizing new routines that make their production easily observable and assessable. Christina Garsten’s research on corporate social responsibility (CSR) took her to a conference in Miami in 2002, organized by the American business association, Business for Social Responsibility (BSR). We learn from their web page (www.bsr.org/Meta/About/index.cfm, accessed 18 October 2006) that BSR, is a global organization that helps member companies achieve success in ways that respect ethical values, people, communities and the environment. BSR provides information, tools, training and advisory services to make corporate social responsibility an integral part of business operations and strategies. A nonprofit organization, BSR promotes cross sector collaboration and contributes to global efforts to advance the field of corporate social responsibility.

Business for Social Responsibility organizes yearly conferences attracting well-known corporate leaders, policy-makers and politicians as keynote speakers, and corporate professionals, non-governmental activists, trade union representatives and one or two academics as participants, among them Christina. She participated in this conference in order to get a sense of BSR as an arena in which CSR is being discussed, defined and implemented, and in which actors from various sectors meet and work through the CSR discourse. At this particular conference, located in an up-scale Miami hotel, an entire session was devoted to the discussion of ‘corporate transparency’ and how to communicate potentially harmful information across organizational boundaries. The panelists were seated according to a ‘fishbowl concept’, on high chairs at the very centre of a number of

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concentric circles of seats. The audience thus constituted the periphery of the fishbowl, so to speak. The moderator opened the discussion by stating ‘If you want to talk about transparency – this is the place!’ She then went on to outline her view of transparency, implying a broad understanding of the term, such as access to information, being able to respond to the engagement of stakeholders or employees, replying when somebody is critical or just curious. Transparency also involves a process of verification, providing information to a broader audience, she continued. One of the participants, a male business leader in his early forties, then presented his case, and opened by stating: ‘Transparency is about communication, about telling the full story in order to offset conspiracy theories among our customers. It is about opening up our books to show what we are doing, to build trust. Facts are friendly. Transparency is so much more than a single document.’ Another participant, a male representative of a non-governmental organization, underlined that business leaders have a responsibility to report to those who have legitimate interests: ‘Stakeholders have a right to know. Transparency builds good relationships with stakeholders.’ A third participant, a man who had set up his own CSR consultancy in the aftermath of an environmental crisis caused by the company at which he was employed, had his own view on transparency: ‘Transparency is about telling what makes us uneasy. It goes beyond what you would want to know. Basically, we should demand from companies what we demand from our children – that they admit when they did wrong, that they are honest. Transparency is a personal thing.’ Sharing information across organizational boundaries, revealing information and making visible the uncomfortable lays bare the ethical interlinkages of organizational leaders with actors outside of the organization. Ethical considerations become an important element in this conception of transparency, which is transformed into a personal relationship in which each actor has to demonstrate his or her responsibility for making things transparent. Here, transparency becomes an exercise of cleansing, of flushing through and of re-establishing the moral order of things. The corporate voices in our example above reveal the ways in which transparency may compel people, the way in which it may reflect ‘the inner voice’ of the individual. This, then, is an extension of the version of transparency that is being pursued and put into practice through ‘trust in numbers’, benchmarking, rating and ranking and the like. Whilst the technologies of transparency are based on a recognition of the merits of rationality, rules and organization, there are also normative and ethical dimensions to it, based on an individual capacity for intersubjective and reflexive reasoning and engagement with the Other.

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CONCLUDING NOTES: TRANSPARENCY AS ETHICAL NARRATIVE The legibility, or transparency, of organizations may be viewed as a distinctive sign of the increasing rationalization of modern, organizational life and order. Transparency is a goal to be systematically pursued; a task, something that needs to be enforced on often recalcitrant organizational actors. ‘Transparentizing’ the organization is seen by many policy-makers and market actors as an important step in making the globalizing world hospitable for trans-organizational, transnational and sometimes supernational interventions and administrative procedures powers (cf. Bauman, 1998, p. 33). Only by making organizational procedures, numbers and decisions visible to the external eye can the organization claim to be an accountable and legitimate player in society and in the marketplace. The same often applies to entire nations, as can be noted, for example, in the series of internal reforms that the Southern European and Balkan states must undergo in order to accede to the European Union (European Union, 2002; 2004a; 2004b; 2005). By accepting and complying with such demands for openness and scrutiny, nations and organizations also make transnational administrative systems of verification and control possible. Just as the transparency of space, through maps and various forms of surveillances techniques, was a distinctive mark of the rational order of modernity and offered a sense of order and security, the transparency of organization is a marker of the rational organization and an indispensable condition for a globalized audit society. To a certain degree, the public’s opinion as to the ‘transparency of a company’ – be it in economic accountability or social accountability as reflected in procurement and labour policies – is becoming an important part of its image, and part of its potential selling power. But transparency takes us beyond the rational, the factual and objective in the direction of a set of normative claims about the way corporations and other market actors should operate. It provides an ethical narrative for the organization and its members and becomes imbued with both the factual and the subjective. We suggest that the infusion of ethical discourse into the corporate lingo reflects what Rose (1999) calls the power game of ethico-politics: Ethico-politics has a particular salience at the close of the twentieth century [and, we may add, even at the beginning of the twenty-first, our comment]. For it appears that somehow ‘we’ – the subjects of advanced liberal democracies – in the absence of any objective guarantees for politics or our values, have become obliged to think ethically. Hence it is likely to be on the terrain of ethics that our most important political disputes will be fought for the foreseeable future. (Rose, 1999, p. 188)

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The call for transparency expresses a concern for ethical reflexivity in the pursuit of profitable business. The business of transparency in corporate life is, in a sense, a case of ‘moral transformation’, in which data and practices that are already in place are now repositioned, change their meaning and come to exist in a moral field (see also Garsten, 2003). Transparency and the technologies developed to attain it contribute to a particular moral order (cf. Harper, 2000, p. 47). In this moral field, the pursuit of transparency provides a way for companies to place decisions and processes beyond political contestation, as morally and ethically sound, just because they pertain to have been made transparent. In Harper’s view, such transformations are likely to be salient in all organizations and institutional contexts subject to the rationalization of seeing, and of audit. They are part and parcel of ‘audit society’ or ‘audit culture’. By way of concluding, the hidden will always be with us, will always occupy a significant portion of human thought and action. The corporation is an arena in which a delicate balancing act between revelation and concealment will always be part of the game. The work of transparency is not only to make visible, but also to determine what we desire to be made visible, when, and to whom. And as such, transparency is not just about making visible, but about making a normative claim.

ACKNOWLEDGEMENTS The research upon which this chapter is based is part of the projects ‘Fashioning markets: accountability and transparency in the global marketplace’, funded by The Swedish Research Council, and based at the Department of Social Anthropology, Stockholm University; and ‘Social affairs: forms of governance for a normative economy’, funded by The Bank of Sweden Tercentenary Foundation, based at Score, Stockholm University.

NOTES 1. There is also a niche for consultancies, civil society organizations and news agencies in reporting on corporate scandals. With increased pressures for transparency and accountability, this niche has grown considerably in recent years. For example, Forbes publishes the Corporate Scandal Sheet, and the non-governmental organization Transparency International provides quantitative diagnostic tools regarding levels of transparency and corruption, both at global and local levels, through its TI Corruption Perceptions Index (CPI), and the Bribe Payers’ Index (BPI). ‘Whistle-blowing’ by employees is also being turned into a niche for companies, an example of which is SafeCall, ‘the whistleblowing company’ (www.safecall.co.uk, accessed 20 October 2006). There are also a number of

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films on the topic, such as The Corporation (directed by Mark Achbar and Jennifer Abbott, Big Picture Media Corporation, 2003) on the modern-day corporation and its behaviour towards society. See also the book Conspiracy of Fools, Kurt Eichenwald‘s detailing of the Enron scandal (2005). 2. There is now a growing body of literature on the challenges of global governance and the emergence of transnational regulations. See, for example, Brunsson and Jacobsson (2002), Djelic and Sahlin-Andersson (2006); Hall and Biersteker (2002); Held and McGrew (2002); Mörth (2004); and Strange (1996). 3. The area of corporate social responsibility and corporate citizenship are often hard to separate from one another. There is now a vast plethora of books targeting these movements. See, for example, Andrioff and McIntosh (2001); Crowther and Rayman-Baccus (2004); McIntosh (2003); Windell (2006); Zadek (2001). 4. See for example Transparency International (www.transparency.org, accessed 25 June 2007).

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bosnia_and_herzegovina/mip_2005_2006_bih_en.pdf, accessed 13 November 2007. Florini, Ann (2003), The Coming Democracy, Washington, DC: Island Press. Garsten, Christina (1994), Apple World: Core and Periphery in a Transnational Organizational Culture, Stockholm: Almquist and Wiksell International. Garsten, Christina (2003), ‘The cosmopolitan organization: an essay on corporate accountability’, Global Networks, 3 (3), 355–70. Garsten, Christina and Tor Hernes (eds) (2008), Ethical Dilemmas in Management and Organization, London: Routledge. Hall, Rodney B. and Thomas J. Biersteker (2002), The Emergence of Private Authority in Global Governance, Cambridge: Cambridge University Press. Harper, R. (2000), ‘The social organization of the IMF’s mission work: an examination of international auditing’, in Marilyn Strathern (ed.), Audit Cultures, London: Routledge, pp. 21–53. Held, David and Anthony McGrew (eds) (2002), Globalization/Anti-Globalization, Cambridge: Polity Press. Höpfl, Heather and Steve Linstead (1993), ‘Passion and performance: suffering and the carrying of organizational roles’, in Stephen Fineman (ed.), Emotion in Organizations, London: Sage. Lindh de Montoya, Monica and Kent McNeil (2003), Micro-credit Organizations and Savings Mobilization in Bosnia and Herzegovina. An Assessment for USAID, USAID, Financial Sector Business Advocacy and Training Project (FSBAT). Lindh de Montoya, Monica and Jusuf Tanovic (2003), Overview of Current Commercial Financing of the Agro-industry, Wood products and Tourism Sectors in BiH, USAID, Financial Sector Business Advocacy and Training Project (FSBAT). McIntosh, Malcolm (2003), Raising a Ladder to the Moon: The Complexities of Corporate Social and Environmental Responsibility, Basingstoke: Palgrave. Mörth, Ulrika (ed.) (2004), Soft Law in Governance and Regulation: An Interdisciplinary Analysis, Cheltenham, UK and Northampton, MA, USA: Edward Elgar. Porter, Theodore M. (1995), Trust in Numbers: the Pursuit of Objectivity in Science and Public Life, Princeton, NJ: Princeton University Press. Power, Michael (1997), The Audit Society: Rituals of Verification, Oxford: Oxford University Press. Rose, Nikolas (1999), Powers of Freedom: Reframing Political Thought, Cambridge: Cambridge University Press. Strange, Susan (1996), The Retreat of the State: The Diffusion of Power in the World Economy, Cambridge: Cambridge University Press. Strathern, Marilyn (2000), ‘The tyranny of transparency’, British Educational Research Journal, 26, 309–21. Windell, Karolina (2006), ‘Corporate social responsibilty under construction: ideas, translations and institutional change’, doctoral thesis, Uppsala University, Department of Business Administration. Zadek, Simon (2001), The Civil Corporation: The New Economy of Corporate Citizenship, London: Earthscan. Zaloom, Caitlin (2005), ‘The discipline of speculators’, in Aihwa Ong and Stephen J. Collier (eds), Global Assemblages: Technology, Politics and Ethics as Anthropological Problems, Malden, MA and Oxford: Blackwell, pp. 253–69.

PART II

Transparency and Regulation: Negotiation, Ideals, Compromises

5.

Economies through transparency Emiliano Grossman, Emilio Luque and Fabian Muniesa

INTRODUCTION Wim Duisenberg, former president of the European Central Bank (ECB), asserted that the ECB, as compared to the Federal Reserve, follows a policy of total transparency; Pascal Lamy, while a member of the European Commission, said that transparency is a key component of the governance developments required by globalization; the European Union has increased transparency to be closer to its citizens (Deckmyn and Thompson, 1998; Peterson, 1995). International treaties like the Aarhus Convention (which establishes a number of rights of the public with regard to environmental information and decision-making) try to set norms of transparency for specific policy domains such as the environment. The Director of the French financial markets’ regulator and the Governor of the Banque de France say that financial transparency is one of the conditions for the efficacy of markets (COB and Commission Bancaire, 1998, pp. 5–10). On the cover of a recent book about financial markets, electronic trading is said to bring liquidity, accessibility and transparency to the markets (Young and Theys, 1999). Management scholars experience an increasing inclination to explore this term (Larsson and Lundberg, 1998), as do avant-garde essayists (Brin, 1998). The International Corporate Governance Network (ICGN), a group of powerful institutional investors, calls for transparency in all aspects of the shareholders–management nexus; ICGN principles build on and amplify the Organisation for Economic Co-operation and Development (OECD) Principles of Corporate Governance (OECD, 2004). Law and administration are increasingly required to be transparent (Conseil d’Etat, 1998). The Cromme Commission (a German government commission whose task was to prepare a corporate governance code of conduct) has recently amended the German Corporate Governance Code, whose aim is to make Germany’s corporate governance rules transparent and understandable. Do all or any of the above instances of the notion of transparency share all or any of their meanings and dimensions? Does this vocabulary define 97

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a new way of representing accuracy and fairness in economic and political activities? Is it an answer to the increasing demand for ethics in the economy? Does transparency correspond to a new principle of socioeconomic organization? The analysis of the meaning and use of such a notion is far from straightforward. On the one hand, transparency is drowning in polysemy, misunderstandings or empty statements. On the other hand, the notion is widely used by actors not only concerned with representing economic, social and political life, but also with intervening in it. The notion of transparency seems to be both relevant and ambiguous. The aim of this chapter is not – and cannot be – to provide a definition of transparency that would embrace all its different uses. Rather, we wish to focus on a limited number of these in order to find out whether it is possible to identify common elements, an underlying logic that may help to increase our understanding of the rise of transparency. This chapter focuses on transparency more as a ‘device’ or an ‘instrument’ than as a ‘principle’ (a dimension explored at length elsewhere in this volume). We connect here with the Foucauldian analysis of ‘technologies of government’ and, more precisely, with recent developments in the study of ‘governmentality’ (Burchell, et al., 1991; Miller and Rose, 1990; Rose and Miller, 1992). A particular feature of advanced liberal democracies is, within this perspective, the reduction of the costs of control and the proliferation of ‘self-correcting’ actors. This practical economy of power is based on the development of devices (dispositifs) that are able to distribute control and enact autonomy at local levels. Accounting (Power, 1996) and audit (Power, 1997) are good examples of this array of devices. The history of statistical instruments provides other interesting illustrations (Desrosières, 1998). In the area of public policy, the increasing use of one particular device, independent regulatory agencies, has led to terms like ‘regulatory state’ (Majone, 1996; 1997) or ‘regulatory capitalism’ (Levi-Faur, 2005), thus implying a particularly profound change enacted by such instruments.1 These devices can easily be thought of, in some sense, as ‘transparency-making’ devices to the extent that they prompt some kind of visibility, calculability and accountability. Is transparency thus becoming a general resource for governing contemporary economies? How does transparency activate (and deactivate) political behaviours? The trouble with claims for (or against) transparency is that they introduce intricate, pragmatic questions: who claims, against whom, how, by what means, and to what purpose? A claim for transparency first understood as a call for representative and public proofs can suddenly turn into a call for surveillance and authoritative supervision. Take the case of activists, say, opposed to nuclear energy, that condemn the opacity of a corporation or an institution, for example, nuclear energy

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authorities, and therefore ask for more transparency (Chateauraynaud and Torny, 1999). They are then inundated with massive, detailed, abstruse information on weekly incident reports, and are finally forced to demand some kind of filtering. The social meaning of transparency can be rendered explicit only through an inquiry into the mediations and delegations upon which it calls. The purpose of this chapter is to make such processes more clearly expressed by looking at the different dimensions of transparency in concrete arenas. We aim at developing a typology of the uses of transparency which may help to clarify debates on transparency and limit misunderstandings caused by its ambivalent uses. We begin by exploring the deployment of transparency in a leading economic literature database, so as to ascertain whether we are right in identifying both its rise and intrinsic polysemy. We identify three thematic areas, namely, markets and price discovery, corporate management and institutional investors, and state regulations and economic policy. We then tackle these three thematic areas in the three following sections, through three brief case studies: (1) transparency and anonymity in the context of exchange automation at the Paris Bourse, (2) a ballot statement controversy in the light of corporate governance principles at the retirement fund for California public employees, CalPERS, and (3) the use of transparency at a state level in the context of the European Union (EU) financial regulation. In a final section, we try to condense our findings into a tentative typology, and go back to our guiding hypotheses and see if they still hold.

PERVASIVENESS AND THE POLYSEMY OF TRANSPARENCY: A PRELIMINARY APPRAISAL We would like to explore two sets of intuitions in this section, with the help of rather basic quantitative techniques based on network analysis. The first concerns the rise of transparency in economic and political discourses: are we really observing an increasing pervasiveness of transparency? The second relates to the polysemy of the notion: what people mean when they say ‘transparency’ may often be contradictory, unrelated or thematically divergent. We have chosen to use the EconLit database as a ‘corpus’ of reference. Maintained by the American Economic Association, and holding more than 630 000 records, EconLit coverage includes major economic and political journals’ articles, books, collective volumes, dissertations, working papers in economics and book reviews appearing in the Journal of Economic Literature. This impressive range of sources, types of documents

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and the international scope of this bibliographical database are our rationale for using it as a litmus test for the global development of transparency. Of course, we acknowledge the distance that may separate scholarly vocabulary from an actual use of a notion in practice. Media coverage, operational reporting or ethnographic interviews may provide textual material more suitable to a study of a notion ‘at work’. But the academic literature serves our purpose well for at least two reasons: first, efforts in the articulation of a notion (definitions, discussions, associations) are particularly visible in this kind of literature; second, current literature in economic sciences encompasses a wide array of disciplines that are often close to interventions in operational realms (such as accounting or financial engineering) and that feed, in a rather reflexive fashion, the construction of economic institutions (Callon, 1998). Let us get started with a simple indicator of relevance, which should allow us to answer how often ‘transparency’, or its adjectival or adverbial forms, appear in the economic literature, while controlling for the fluctuation in total number of records in the database. We have displayed in Figure 5.1 the result of dividing the hits of the search string /transparen*/ by the total number of records in the EconLit database, computed for each year from 1986 onwards.2 We notice a clearly increasing trend, with particularly sharp rises in 1998 and 1999, in the wake of the Asian crisis. What is transparency ‘made of’? What terms do we find it associated with? Based on previous encounters with the notion, we expected a set of clusters or ‘regions of usage’. We have therefore extracted optimized clusters of terms that tend to appear in the same abstracts in the EconLit ‘/transparen*/ corpus’, in order to check our impression of the variety of meanings associated with this notion (see Table 5.1). Although the technique is far from perfect, in terms of its reliability and comprehensiveness we can tentatively recognize a number of regions of usage that fit quite interestingly with our expectations.3 Sometimes openly imprecise, sometimes carefully framed and defined, the notion of transparency refers to several kinds of objects: firms, prices, governments, and so on. The way in which these objects are referred to is also variable: declarative disclosure, quantitative monitoring, and the like. Connotations of the use of this notion are primarily positive, although sometimes warnings against excesses of transparency can be raised. In Table 5.2, we provide some isolated – out of context – excerpts from the 2004 sample that provide a flavour of the dominant vocabulary associated with transparency. We would now like to identify three ‘areas of meaning’ that correspond, roughly, to price discovery, corporate governance and economic policy. These areas are far from exhaustive and exclusive, but they seem to make

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The rise and rise of transparency: hits of /transparen*/ divided by total records in EconLit, times 1000

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Figure 5.1

0

1

2

3

4

5

6

7

8

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Table 5.1 Transparency clusters: optimized clusters in our EconLit /transparen*/ corpus Cluster

Associated terms

Central banks

/bank/ /central/ /inflation/ /monetary/ /policies / /rate/ /stabilization/ /target/ /accountability/ /government/ /institution/ /political/ /public/ /reform/ /budget/ /debt/ /fiscal/ /macroeconomic/ /tax/ /europe/ /growth/ /level/ /model/ /performance/ /asset/ /fund/ /management/ /pension/ /risk/ /business/ /competition/ /corrupt*/ /privatization/ /credibility/ /exchange/ /liquidity/ /stock/ /companies/ /control/ /corporate/ /equity/ /sharehold*/ /asia/ /crisis/ /disclosure/ /international/ /standards/ /cost/ /finance/ /firm/ /information/ /invest*/ /market/ /price/ /rule/regulat*/ /trade/

Taming governments Budgets and taxes Eurosclerosis Risky funds Privatized corruption Liquid exchanges Shareholders in control The Asian crisis Prices/trade

sense, at least, at a macroscopic level. In Figure 5.2, we confront this intuition with a correspondence analysis: that is, a map that organizes the associations between terms that are most frequently present in abstracts containing the notion of transparency. As is visible in the scatterplot (Figure 5.2), the two dimensions of the correspondence analysis have identified, quite sharply, an X axis that goes from monetary policies of central banks to firms and corporate governance, and an Y axis from trade and price formation in markets to a (less clear) focus on budgetary restraint and the negative consequences of privatization (that is, corruption). A central region is shared by all ‘use regions’, which stresses the potential ambiguities of the notion. Trust, confidence, regulation and disclosure, control, standards and performance are thus the shared vocabulary of transparency.

REPRESENTING THROUGH PRICES Let us focus now on the area of financial markets, understood in the sense of the ‘exchange’, that is, the trading environment where the formation of equity prices is organized. In this area, we find some of the keywords associated with what economists call ‘market microstructure’ or ‘price discovery’: liquidity, efficiency, volatility, that is to say, the vocabulary developed to describe the behaviour of prices. The notion of transparency is quite

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Chng (2004)

‘[O]rder flow transparency, which is supported by an electronic trading platform, improves price discovery.’ ‘[T]he decrease in market transparency does not compromise market liquidity.’ ‘In all cases, less transparent sellers have an advantage in bidding relative to more transparent sellers.’ ‘[D]espite increasing disclosure requirements, a firm’s net risk profile may not be transparent to shareholders.’ ‘We investigate corporate transparency, defined as the availability of firm-specific information to those outside publicly traded firms.’ ‘[W]ith institutional investors as stakeholders in the holding company, this structure is suited for more transparency and disclosure.’ ‘[P]rivate-sector economists do not consider the ECB transparent.’ ‘Monetary Policy transparency improves the workings of financial markets, enhances central bank credibility and eliminates market uncertainties and volatilities.’ ‘In order for an international arms trade tax to work, the level of transparency in the international arms trade would need to increase.’ Brzoska (2004)

Nel and Lekalake (2004)

De Haan et al. (2004)

Loulmet (2004)

Bushman et al. (2004)

Hallerbach and Menkveld (2004)

Wilson and Dahl (2004)

Tse and Hackard (2004)

Source

Sample quote (from abstracts)

Economic policy, with an emphasis on central banking and on public understanding of monetary policy, with a national or continental scope, and considerations on procedures of communication and control at a state level

Corporate governance, information disclosure to shareholders (with an emphasis on misperceptions), risk assessment, with reference to reporting, to accounting, to information systems and to indicators (qualitative and quantitative)

Market microstructure, design of financial exchange, quality of price formation (or ‘price discovery’), visibility and calculability of prices, with references to their public display (at-adistance), emphasis on quantitative data and considerations of a game-theoretical kind

Area of meaning

Table 5.2 Transparency samples: excerpts containing /transparen*/ from 2004 abstracts included in the EconLit database

104

–0.45

–0.40

inflation

–0.35

target

monetary

–0.30

policies

bank

–0.25

–0.20

–0.15

rate

credibility

Central Banks and inflation

central

–0.10

stabilization

accountability

–0.05

exchange

0

0.05

price

0.10

Prices and trade

invest*

0.15

market

0.20

firm

Corporate control

corporate

trade

information stock

equity

companies

disclosure sharehold* competition

liquidity

risk

management

finance

rule/regulat*

cost asset

business

standards

control

level

debt

fund

international

asi asia

privatization macroeconomic crisis performance

model

europe

government reform political institution pension tax public corrupt*

budget

growth

Taming government

fiscal

Figure 5.2

A map of transparency

Note: Words appearing in the same abstract containing /transparen*/ (from 1996 to 2004) are associated and displayed here graphically through a correspondence analysis scatterplot.

0.32 0.30 0.28 0.26 0.24 0.22 0.20 0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0 –0.02 –0.04 –0.06 –0.08 –0.10 –0.12 –0.14 –0.16 –0.18 –0.20 –0.22 –0.24 –0.26 –0.28 –0.30 –0.32

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present in this vocabulary. It is used in market microstructure literature (for example, Bloomfield and O’Hara, 2000; Madhavan, 1996; 2000), a literature that is particularly present in the above-mentioned corpus. In this kind of semiotic environment, the word ‘transparency’ to a large extent refers to the ‘disclosure’ of market information. Market information can embody very precise and varied definitions: price of executed trades, quantities, bid or ask price for standing orders, market depth (that is, unexecuted limit orders that are waiting in the order book of a stock), but also the identity of the parties who place those orders (identity of stockbrokers and intermediaries, or identity of investors). Lee (1998, pp. 97–9) identifies no less than 18 parameters that can enter in the definition of transparency in this precise context. This kind of procedural, often quasi-algorithmic, discussion on transparency is often associated with the rise of electronic mediation in financial exchanges.4 According to this kind of literature, the type of transparency can have an effect on the behaviour of prices and the efficiency of allocation.5 It can also open (or close) opportunities for strategic behaviour. For instance, if traders can recognize the identity of potential counterparts, collusion is likely to be enhanced, whereas a blind auction protocol may reduce such kinds of behaviour. An interesting shift of meaning can be observed precisely with regard to the identification of counterparts and the introduction of anonymity in financial exchanges. The notion of transparency has been often employed in a ‘literal’ sense: a market is transparent if market participants can see or recognize each other, as is the case for stockbrokers in an open outcry market. In this sense, a market in which the anonymity of counterparts is enforced is perceived as opaque. But this meaning of transparency is not stable. With the rise of electronic trading, anonymity can be conceived of as a quality criterion and thus be an element of transparency. It is not unusual, nowadays, to read that a marketplace guarantees both ‘the transparency of prices and price-setting rules’ and the ‘non-discrimination and anonymity of participants’.6 Let us explore this phenomenon with a close look at the case of the Paris Bourse, which became a fully automated stock exchange in the late 1980s: the open outcry institution (the exchange ‘floor’) was abolished and replaced by an electronic quotation system that conducted the ‘price discovery’ process automatically (see Bacot et al. 1989, for a first-hand account). The notion of transparency was used by bankers to push for this innovation (Commission Pérouse, 1981, vol. 2, pp. 185–95). It concerned breaking the ‘closed’ culture of the agents de change, the French stockbrokers that were monopolizing trading at that time. But the agents de change also had an argument for transparency: they needed to recognize

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each other in order to guarantee a sound and liquid trading process.7 The engineers in charge of the reform decided to publicize the identity of the agents de change among themselves in their new trading terminals (through an identification code). The new trading architecture was said to be transparent because it allowed stockbrokers (but not investors) to observe each other on their trading screens. This gave stockbrokers the ability to detect and contact each other individually (through the telephone) and thus to arrange bilateral deals below the public order book. This prerogative lasted until quite recently. But in April 2001, with the advent of the new Euronext market model, the Paris Bourse decided to enforce full anonymity in its trading system – a decision that caused discontent among Parisian stockbrokers.8 One may see in this decision an effect of the struggle between competing trading platforms in Europe. The Paris Bourse needed to attract big international intermediaries (and especially big Anglo-American brokers and investors) that are usually inclined to trade in more anonymous environments (such as quote-driven markets). But the decision was also justified in more transparency-friendly terms. If the market allows for the recognition of individual counterparts, then the publicity of price formation cannot be guaranteed.9 Bilateral trades typically correspond to an ‘over the counter’ procedure, whereas the principle that guarantees the production of liquidity in an order-driven, centralized market is precisely the fact that the order book of an equity is public (at least for market professionals). In this case, market transparency is strictly associated with the visibility of prices and volumes (bid-ask spread and market depth), and not with the identification of the ‘personal element’, to use a Simmelian notion. Perhaps this distinction between two meanings of transparency, one associated with the identity of market participation and another associated with a strictly price-mediated visibility, can be seen as an instance of a more encompassing distinction between ‘literal’ and ‘abstract’ transparency.10 While literal transparency intends to preserve traits of the actor or object so that they can be easily recognized (we can see through the device), abstract transparency reorganizes the task of representing so that they can be easily transported and processed (we can only see through the device). We can translate this to an economic domain. Literal transparency would refer to a kind of face-to-face environment such as an open outcry market, or to a mediated type of exchange where the identity of the parties is maintained (a telephonic conversation with a broker or a market-maker, or a screen-trading interface that allows the identification of the agents that are intervening in the market). On the contrary, abstract transparency could characterize an anonymous bidding protocol, or a

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clearing house-type of exchange in which the counterpart is, by definition, not ‘chosen’ but determined by an algorithm and participants are translated through their abstract expression – prices and quantities. We may understand this move from literal to abstract transparencies as a shift in the architecture of different regimes of coordination. Literal transparency roughly corresponds to a world of networks à la Granovetter (1985) in which commercial transactions require personal recognition and interpersonal entanglement, whereas abstract transparency better matches the neoclassical leitmotiv of an impersonal exchange mediated by a mechanical auctioneer (Ingrao and Israel, 1990).11

MONITORING CORPORATIONS AND AVOIDING MONITORS Transparent is a hard state to be in, since it diminishes your opportunities to behave freely, that is, your actions will be scrutinized to verify whether they are in accordance with the standards you are expected to follow. In this section we focus on an obscure controversy around ballot statements to further explore the elusive functions and actions of transparency as wielded in the ongoing battle between corporate managers, boards of directors, banks, governments and institutional investors over control of economic life; a battle in which investors have of late managed to score some points by increasing corporations’ transparency. We are not able here to provide a detailed background of this massive displacement of economic power that appears in the right-hand section of our map (Figure 5.2), and in which transparency has been playing a crucial role.12 To outline the rationale of this long-standing battle between managers and shareholders, we may turn to a crucial synchronizing actor (Luque, 2001): the OECD. This ‘public’ think tank of global capitalism framed the necessity of launching an initiative on corporate governance principles addressing ‘governance problems that result from the separation of ownership and control’ (OECD, 2004, p. 12). Here the framework sets out to ‘ensure that timely and accurate disclosure is made on all material matters regarding the corporation, including the financial situation, performance, ownership and governance of the company’ (OECD, 2004, p. 22). Transparency, thus defined, comes to be a central element in addition to ‘proper incentives for the board and management to pursue objectives that are in the interest of the company and shareholders’, by facilitating ‘effective monitoring’ (OECD, 2004, p. 11). A telling example of how a powerful actor attempts to alter its relationships to other actors by means of transparency, is provided by the

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powerful CalPERS.13 CalPERS has been the spearhead of the global ‘activist shareholder’ movement to redesign corporate law and financial market regulations to allow shareholders to more closely control the governance structures of corporations. It is a founding member of the International Corporate Governance Network,14 and together they press for the worldwide adoption of the Global Corporate Governance Principles, which amplify the OECD Principles to which we refer above. Here, we will focus on section IV, Disclosure and Transparency, of the ICGN version (ICGN, 1999), which demands ‘accurate, adequate and timely information . . . so as to allow investors to make informed decisions about the acquisition, ownership obligations and rights, and sale of shares’. Among the information required we find that the IGCN ‘asserts that corporations should disclose upon appointment to the board and thereafter in each annual report or proxy statement sufficient information on the identities, core competencies, professional backgrounds, other board memberships, factors affecting independence, and overall qualifications of board members and nominees’ (our emphasis). This sounds familiar and sound enough. But CalPERS of course has a board of its own, whose members are elected after publicizing a ballot statement that is the sole source of information for CalPERS voters. We learn that the board intended to amend section 554.4 on Candidate Statements in the regulations by which CalPERS abides.15 This amendment prevented candidates from stating the following: their ‘education and background, and a list of organizations to which the candidate belongs, and positions held in those organizations’ and ‘statements indicating the candidate’s opinion or positions on issues of general concern to the System’s membership may be included’. The amendment also denied the Election Coordinator the right to ‘request the candidate to verify the truthfulness of any factual statements’, for which ‘[t]he candidate shall provide timely verification upon such request’, under the risk of being ousted from the ballot if he or she did not comply. That is to say, incumbent CalPERS board members rejected the very transparency guidelines they so forcefully press for elsewhere, since at least the positions held in other organizations by candidates are certainly ‘factors affecting independence’. The devil of transparency is mostly in the details: other candidates may challenge statements, but with just a five-day deadline after mailing for filing these. These complaints must then follow an expensive procedure of private arbitration. Disincentives for information-seeking and publicity are the equivalent to decoy and deception in satellite countermeasures, as they alter the cost structure of transparency-based control. In fact, the displacement of controversies to ‘private’ and expensive areas could precisely be part of the definition of non-transparency.16

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What we witness in this jungle of rules and amendments is a fight for control waged around transparency devices: actors A(ctivists) were trying to discipline actors B(oard) by forcing them to provide a flow of information that would enable other actors V(oters), who could exert control on B, to form a judgement on their behaviour, as meeting (or not) a standard for public control. We would like to stress here that it is through a reference to a legally constructed ‘prudent person’ that the legal/moral character of their behaviour will be appraised. The California Constitution, in its Article XVI, section 17(b), states that ‘[t]he members of the retirement board of a public pension or retirement system shall discharge their duties with respect to the system with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims’. Transparency means here ensuring the flow of information that allows those concerned to verify this character of conformity to public standards, and disciplining the deviants accordingly. A second moral of the ballot statement story is related to the crucial issue of resources in transparency-making. As a US municipal bond market watchdog put it, ‘[i]t is not just getting the information, it is getting the information out there to investors who know what to do with it’.17 When challenging ballot statements, costs were very easily out of reach for individual claimants. Literal transparency of this kind may be replaced by abstract transparency, which means that another actor (the Attorney General was suggested at one point) will bear the brunt of verifying and controlling the production of the flow of information – but at a price. There will be increased opacity in the transparency-generating procedures – there are, after all, instances of Bruno Latour’s black boxes (Latour, 1987). As the software programmers’ motto goes: good, cheap, fast, pick two. But how relevant is the ballot statement story in the overall ‘shareholders v. managers’ epic? Here we should stress how relatively minor changes on what must appear, where and when can profoundly affect corporate governance. In a recent rule issued by the Securities and Exchange Commission, investment companies are required to disclose ‘how they vote proxies relating to portfolio securities they hold’.18 This should enable shareholders to monitor the proxy voting policies of the funds they have invested in, or in which they are about to invest. However, the matter of costs emerges again: how accessible is this information?19 As in the case of executive compensation, SEC rules may be next to be avoided in practice if they are ‘literally’ followed, providing the required information in diverse and incompatible types of documents which require time- and money-consuming processing. Format, then, is of the essence in transparency matters.

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KEEPING THE STATE AT A(N INCREASING) DISTANCE This section discusses several instances of the strengthening of transparency in financial regulatory policy. The rise of transparency in this area must largely be seen as the product of a changing view of politics in general, that is, a means of introducing permanent scrutiny and a tendency towards ‘open government’ (Curtin, 1998, p. 108). The simplest and one of the most developed devices of transparency in this area is access to documents. It usually takes the form of ensuring disclosure, publicity and accountability of policy processes and public finance. Access to documents reverses the very logic of state secrecy. The state now has to disclose all information and quickly. Furthermore, if it does not disclose, it has to motivate and justify its refusal to do so. This strongly contrasts with ‘étatiste’ traditions like that of France, where the reference to raison d’état used to be enough to ensure the secrecy and opacity of large areas of public policy (but see Conseil d’Etat, 1998). The European Union has pushed the debate on transparency further than most of its member states. Since 1993, the EU has ‘opened up’ its policy process as a response to criticisms concerning its opacity and complexity and as an attempt to bring citizens closer to EU-level political processes. Since Maastricht, the right to access EU documents is stated in article 255 of the EC Treaty. As a consequence, the EU has quickly surpassed most member states concerning access-to-documents regulation (for an overview, see Peterson, 1995).20 In European financial regulatory policy, as in most other regulatory policy areas in the EU, the access-to-documents procedure is mainly used by financial firms themselves or lawyers and professional lobbyists working for them.21 Most firms’ representatives or lobbyists, however, hardly ever have to go as far as to formally request a document. Commission officials usually send even preliminary documents rapidly to their contacts in the industry.22 Moreover, the widespread use of White and, especially, Green Papers or Books, which was taken from the British civil service, ensures systematic consultation of market actors. The Green Paper implies a proactive attitude of the administration. It seeks to inform the public on the administration’s projects and asks for reactions and comments that may be included in a later policy proposal (Lodge, 1994, p. 349).23 The Financial Services Action Plan (FSAP), which is to remove remaining obstacles to the Single Market for Financial Services by 2005 (European Commission, 1999), has started a wide consultative procedure with ‘Forum groups’ discussing its main issues. Even though many participants were still unhappy about the actual input of these groups into the policy process, the Commission did circulate

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early drafts – even before Green Papers were issued – of most legislative proposals among the actors. In the case of the creation of a European securities’ committee, a ‘Wise Men’ group published a first report in November 2000, which was submitted to consultation within the industry, well before the publication of the final report in February 2001 (Lamfalussy, 2001, p. 13).24 This kind of procedural transparency appears in this context as a means of promoting the integration of financial and banking markets in the EU. Consultation of market participants means to increase the efficiency of regulatory policy, as well as the legitimacy of these measures. Their implementation depends, especially in the area of – non-binding – ‘soft law’, on the goodwill of the actors themselves. For instance, a recent voluntary code of business conduct laid down the rules of a European Standardized Information Sheet (ESIS) on home loans. Credit institutions across Europe are to respect the format of this sheet in order to render data on home loans more comparable and, thus, transparent (EMF, 2001). Transparency has another meaning in the context of EU financial regulation: it implies controlling and limiting state participation in the economy.25 The so-called EU ‘transparency directive’ governs the financial relations between public authorities and public undertakings. Any public funds made available to public undertakings are to appear separately and be clearly stated in the latter’s accounts.26 The idea behind this is that state intervention will necessarily distort market competition. It is part of the more general policy of controlling and restricting state aids of any kind in the Single Market. The application of the ‘market investor principle’ is to ensure that the state as an entrepreneur demands competitive rates of return, if it is to avoid the accusation of state aid (Pesaresi and Rochefordière, 2000). This line of thinking in the financial area has led to two notorious interventions on behalf of the Commission. In the case of the bankruptcy of the then state-owned French bank Crédit Lyonnais, the French state had to negotiate its rescue with the Directorate-General for Competition. Massive subsidies were eventually accepted on the condition that the bank be returned to the private sector by October 1999 (European Commission 1998).27 More recently, a complaint against the system of state guarantees for German public banks has been filed by the European Banking Federation. German public banks had been the target of an earlier complaint, in 1993, and the transparency directive explicitly aimed at their particular corporate structure. In December 1999, a new complaint argued that liability guarantees granted to public banks by their owners distorted competition by yielding normally high ‘ratings’ which would not be justified on purely economic grounds (EBF, 2000). As a consequence of the complaint, the guarantees will be removed by the end of 2005. Transparency here

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becomes a means of ensuring the limited and exceptional character of state intervention in the economy. The ‘transparency phenomenon’ thus has two main expressions in European financial regulatory policy. What we term procedural transparency is meant to ensure the openness and the legitimacy of the policy process. Actors are to be consulted and informed to avoid inefficient regulatory policies. Their input to the policy process will also ensure the respect of regulation and the efficiency of markets. A second type of transparency protects the same market efficiency from state intervention. Intrinsically suspect, the state is put under closer scrutiny and its role in the economy is progressively restricted. The latter is clearly more abstract than the first, even if, as we will see in the concluding section, it is difficult to use the same terms to describe all dimensions of transparency.

CONCLUDING REMARKS In this section, we try to pull together some threads from the preceding discussions. One of the major similarities in our examples is that transparency is about making things accurate, visible and comparable. Now, how is accuracy achieved? What is being compared to what, through what means of representing, and with what purpose? What forms of accountability and calculation derive from such arrangements? We can at least try to begin answering these questions. We may distinguish two main ‘regions of practice’ where transparency gathers distinct meanings. We may call these ‘disciplinary’ and ‘enabling’ deployments of transparency. What is characteristic of the first type (disciplinary) is the effect of holding a type of behaviour to account in relation to a public standard, through a description as detailed as possible of events and decisions. An interesting instance of this meaning of transparency would be MinistryWatch.org, a Christian charity watchdog that publishes a Transparency Grade ranking, and issues ‘Donor Alerts’ when a given religious organization fails to provide IRS data or audited financial statements.28 The core of the second type of transparency (enabling) is the setting up of an infrastructure for coordinated action (typically around exchange), where the amount of information about the intervening actors and objects is key to the initiation or stabilization of joint operations. To this we can add the dimensions of ‘literal’ and ‘abstract’ transparencies, which focus on the means of translating actors and objects into manageable entities. Making representations more or less mobile, more or less public, letting actors see through devices or not, depends on the regime of co-ordination at work, on the political economy of the monitoring or

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exchange that is enacted. In fact, some deployments of transparency are intimately connected to anonymity, whereas others are meant to enhance the mutual identification of the actors involved. In each case, the ‘public’ is constructed differently. Literal transparency stresses the individual engagement in the collective. It furthers intervention and participation. The public born out of literal transparency, so to say, is a gathering of mutually observed and entangled beings. But the existence of mutual arrangements makes it difficult, or at least problematic, to gain an overarching, panoptical view. With abstract transparency, publicity is fostered but the public is ‘abstracted’. Representations can be aggregated more easily because the stress is put on procedures and mechanisms of visibility (read ‘of calculability’). Any participation that is not performed through these visibility devices may be seen, at best, as ‘noise’ (or, at worst, as a disturbing element that hinders the functioning of the mechanism). So, we would be left with something like Table 5.3, in which we have placed a number of illustrative examples. It is obvious that not all examples discussed above can be easily fitted into a single case. Access to documents, for instance, is clearly literal, but can be both disciplinary and enabling. We can, however, satisfactorily locate a good part of the instances of transparency deployment in our rather minimal typology. Say that institutional investors would like to control the ‘ecological dimension’ of the companies in which they may invest, in the light of the Kyoto process or the likely consequences of global warming awareness in the economy. A convenient way to shift the costs of this control to those very corporations is to force them to report on their carbon emission level. The Carbon Disclosure Project builds such a regime, where companies become subject to performance comparison (whether with competitors or themselves in time) in terms of their carbon emissions.29 From the point of view of individual investors, for example, their Climate Leadership Index becomes an ‘abstract-disciplinary’ instance of transparency. Table 5.3 A tentative classification of uses of transparency and means of representation Uses of transparency

Disciplinary Enabling

Means of representation Literal

Abstract

Ballot statements regulations in corporations Access to documents and Green Books in the context of the EC Treaty

Market investor principle (EU competition policy) Paris Bourse’s trading system after anonymity (Euronext market model)

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The refraction of transparency into this assortment of devices and discourses could perhaps better be understood within the remarkable framework of ‘justification regimes’ provided by Boltanski and Thévenot (1991).30 For these authors, a justification regime corresponds to a ‘common world’ which is governed by a particular ‘order of worth’ and characterized by a ‘common superior principle’.31 This principle may be referred to when invoking justice in situations of conflict or dispute. According to this approach, several ‘orders of worth’ can coexist. But agreements may be reached easily when arguments are compliant with a common metric, that is, with a suitable justification principle. Is transparency a (or the) constituent element of a particular ‘common world’? Transparency could fit as a justification principle of the ‘market world’ since it is a notion through which the categories of mercantile principles can be developed: harmonious competition and revelation of desires and forces through prices. Interestingly enough, the idea of transparency happens to be central to the vocabulary of mainstream economics. But the ‘industrial world’, the universe of organization and machinery, could also be linked to specific uses of the notion of transparency that are close to the imagery of hierarchies and engineering. In computer engineering, in an interesting twist of meaning, a transparent network architecture is one that allows the user not to notice that several hosts are performing tasks within it. However, in their study of contemporary forms of capitalistic legitimacy, Boltanski and Chiapello (1999) have identified the justification regime that characterizes the ‘connectionist world’, a world of management where activities are shaped around ‘projects’. These authors explicitly underline that the notion of transparency is not specific to this ‘connectionist world’: while the market is supposed to be transparent in order to enhance a price formation process, networks (the main leitmotiv in the ‘connectionist world’) are recognizable only at local levels (Boltanski and Chiapello, 1999, p. 194). An elucidation of the status of transparency as a justification principle in our contemporary economic world would call for an inquiry into the specific trials in where this notion is invoked and put to the test. Have we located the seeds, then, of a new ‘justification regime’? Probably not. Although transparency has come to be highly regarded in a number of spaces of public controversy, it does not seem to be the source of a ‘common metric’ for those spaces. But although not the source, it is certainly the precondition for increasing the ‘tension’ of the ‘trials’ (Boltanski and Thévenot, 1991). Calls for transparency would seek, in our reading, a redistribution of resources to hold to (public) justification, to construct accountability, within diverse regimes, and thus with diverse and often incompatible meanings and implementations. In fact, one of the most remarkable properties of transparency – as our analysis points out (but see

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also Garsten and Lindh de Montoya in this volume) – is its ambivalence. Calls for transparency can hardly be stable and finite statements. Calls for transparency tend to engender (further) calls for explicitness. In order to be effective (that is, politically relevant), transparency needs to be decoded and recoded, in other words rendered explicit in a number of multiple ways. Should it translate into ‘full access’ or ‘filtering’, or into ‘publicity’ or ‘recording’, the notion of transparency often needs to be folded into concrete (and differentiated) devices. In a political context of ‘advanced liberal government at a distance’, as the governmentality school would put it, the matter of the (political) representation of forces and interests seems to be intimately associated with the proliferation of transparency-making devices: access-to-documents protocols, price discovery mechanisms, reporting methods and indicators, and so on. On one hand, this proliferation is ‘expensive’, in the sense that it requires strong ‘investments in forms’ (Thévenot, 1984) and, sometimes, the demolition of deeply rooted institutions (the transition from open outcry markets to automated exchanges is a good example). On the other hand, it is ‘economic’, in the sense that it is usually driven by a ‘cost efficiency’ philosophy, by a concern about economizing (the reduction of the state’s scale is usually presented in this way). Is this the reduction of the costs of control that for decades haunted the liberal utopia of a (transparent) market as the ideal interface between ‘self-correcting’ selves? Probably yes. Only it is important to keep in mind the variety of styles and modalities of transparency and to make the effort of decoding the many versions of these transparency-enabled entities. Finally, what socio-political changes does transparency both perform and codify in these recent years of its ascent? The co-production of governance by civil society, market and state actors is likely to be a candidate. Monitoring is both transferred to and embraced by NGOs in the largest sense, as the Aarhus Convention shows.32 The distribution of power among actors, in so far as transparency is waged as a disciplining device and is defined by certain costs structures, must be taken on board too, as in the rise of institutional investors. The transformation of state action from being a central player to securing the framework for other players may be another leitmotiv of current changes. But in all these displacements the devil is in the details, which takes us to our initial stance of considering transparency as a set of devices, not as a principle. In the latter case, we may get carried away by the promises of enhanced mutual control, decentralized power, a longer set of dramatis personae in democratic life. Our focus on arrangements shows that how transparency is enacted (see Saward, 2003) has a huge impact in defining what actors do get into the show, and their chances of having some say in

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how it is run. In suggesting our taxonomy of enabling and disciplinary deployments of transparency, we have tried to disentangle transparency when used as a technology of exchange from its use as a technology of government. As suggested by ‘Anglo-neo-Foucauldians’, transparency may well be an ongoing project to shift control costs to the very agents to be controlled, whereby they are expected to render themselves amenable to regulation by providing the means of surveillance. Thus, they increase their self-regulation, allowing ‘government at a distance’, but are in the process turned into subjects of ‘performance’, colonized by the very indicators they must provide about themselves (Dean, 1996).33

ACKNOWLEDGEMENTS A preliminary version of this paper was presented at the workshop ‘Organizing visions: the ambiguity of transparency in science, technology and politics’, Department of Science and Technology Studies, Cornell University, Ithaca, NY (19–21 April 2002) and at the seminar ‘Illégitimité et légitimation du secret: Approches pluridisciplinaires’, Ecole des Hautes Etudes en Sciences Sociales, Paris (10 December 2002). We thank Dominique Cardon, Eve Chiapello, Christina Garsten, Ellen Hertz, Stephen Hilgartner, Cyril Lemieux, Vincent Lépinay, Javier Lezaun, Monica Lindh de Montoya and Anna Maerker for their remarks and suggestions. Authors’ names appear in alphabetical order.

NOTES 1. 2. 3.

See Lascoumes and Le Galès (2004) for recent developments. We counted about 1486 abstracts including /transparen*/ for the period 1986–2004; 1302 for 1996–2004. The procedure to generate this outcome has been as follows: we accumulated all abstracts containing the string /transparen*/ appearing in EconLit from 1996 to 2004 in a single corpus file, with one abstract per line. We then located the appearances of a set of keywords in the corpus. Keywords were the most frequent terms in the corpus, with a threshold of 80 hits (for pure readability reasons), and lemmatized, that is, grouped under a single heading (thus, ‘trade’, ‘trades’ and ‘trading’ go under /trade/). This provided the input matrix for UCINET (Borgatti et al., 2002) that was transformed into a co-occurrence (keyword-per-keyword) matrix by means of the ‘affiliations’ procedure. We then ran both an optimized cluster and a correspondence analysis, obtaining Table 5.1 for the former and Figure 5.2 as the scatterplot of the second. The UCINET procedure we have used to extract these clusters (Table 5.1) from the keyword-per-keyword cooccurrence matrix is ‘optimized clusters’, based on density, and attempts to optimize these measures to try and find the best fit for a given number of blocks. We have chosen the best fit indicator to find the ideal number of clusters, increasing the number of iterations and random starts seeking more robust results. We reiterate that they must be

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taken with a grain of salt, since some of the terms ‘jumped’ from cluster to cluster in different configurations. However, most of them are robust enough to warrant their inclusion in our table, and they are born out by the correspondence analysis below. 4. See also Domowitz (1993) for an early survey of transparency protocols in electronic trading systems. 5. See, for instance, quotes from Chng (2004) and Tse and Hackard (2004) in Table 5.2. 6. These two phrases appear next to each other, for instance, in the mission statement of a recent pan-European electronic platform for greenhouse gas tradable quotas: ‘La Bourse française d’échange de quotas de CO2 devrait être opérationnelle en mars’, Le Monde, 7 January 2005. 7. This and what follows is based on field interviews with several actors involved in this process. Interviews were carried out between 1999 and 2002. 8. ‘L’anonymat gêne les professionnels’, La Tribune, 24 April 2001. 9. On this issue see also Lee (1998, pp. 234–8) and Biais et al. (1997, pp. 53–68). 10. This use of the notion of ‘abstraction’ is roughly inspired by Georg Simmel’s work (Simmel, 1990). We also owe the distinction between literal and abstract (or ‘phenomenal’) transparency to Rowe and Slutzky (1997). 11. See also Muniesa (2000) for an analysis of the neoclassical resonances of the Paris Bourse’s electronic double auction. 12. That ‘activist shareholders’ may now have the clout, resources and legitimacy to exert pressure on boards and management must be primarily connected to the momentous rise of institutional investors, which cannot be discussed at length here. See OECD (1998) and the articles of a special issue of L’Année de la Régulation on pension funds and shareholder value, especially Montagne (2000), O’Sullivan (2000), Sauviat and Pernot (2000) and Lordon (2000). 13. We owe some of our sources to the controversies among the actors involved such as James McRitchie (see McRitchie’s comments and correspondence at www.perswatch.net/). See also: ‘CalPERS muzzles critics: ballot rules protect board, keep others in the dark’, Sacramento Bee, 24 May 1999. 14. International Corporate Governance Network members were estimated to hold total assets exceeding $10 trillion in 2004. 15. Amendments to this section were adopted by CalPERS board on 21 March 2001, and became operative on 16 January 2002 (the California Code of Regulations is available at http://ccr.oal.ca.gov/). 16. Private, in a flow-of-information definition, means ‘under no surveillance’ by other actors, which in turn means that all costs will be born by the actors concerned, and no allies will be in sight to detect and punish deviations from publicly held standards. 17. ‘Let there be light’, The Economist, 5 February 2005. 18. ‘Final Rule: Disclosure of proxy voting policies and proxy voting records by registered management investment companies’, SEC, release 33-8188, file S7-36-02, 14 April 2003, available at www.sec.gov/rules/final/33-8188.htm. 19. See Mercer Bullard’s comment on ‘Proposed rule: disclosure of proxy voting policies and proxy voting records by registered management investment companies’, SEC, release 338131, file S7-36-02, 21 October 2002, available at www.sec.gov/rules/proposed/s 73602/ mbullard.htm. 20. Major exceptions are the Scandinavian countries and, especially, Sweden, where such procedures have existed for more than two centuries. See Gronbech-Jensen (1998). 21. European Union statistics reveal that those interested in documents are academics (20.4 per cent), public authorities (20.8 per cent), lobbyists (17.6 per cent), industry (15.4 per cent) and lawyers (12.8 per cent). The general public accounts for 8.1 per cent. Numbers are for 1998 and all policy areas included (European Commission, 2000). 22. This is based on several interviews with banking associations and lobbyists in Brussels, Berlin and London conducted in 2000 and 2001. 23. There are also more informal ‘consultation documents’ fulfilling similar functions. 24. And, in principle, anybody else, as the report was available on the Commission’s website.

118 25. 26. 27. 28. 29. 30. 31. 32. 33.

Transparency and regulation Competition policy is the only area of EU policy where the Commission may investigate, judge and sanction. See Cini and McGowan (1998). Directive 2000/52/EC of 26 July 2000 (amending Directive 80/723/EEC); it came into force on 1 January 2002. On the scandal of Crédit Lyonnais, see De Blic (2000). It is remarkable that the moral ‘constructed entity’ is described here in the relevant Christian sequence of confrontation, reconciliation and repentance. See: http://www.cdproject.net/. An English overview of the work of these authors is given in Boltanski and Thévenot (1999; 2000). This is the translation of the French expression ‘ordre de grandeur’, as suggested by the authors themselves (Boltanski and Thévenot, 1999). Within the World Trade Organization (WTO) the term non-governmental organizations (NGOs) includes economic interest groups in addition to traditional environmental or humanitarian NGOs. See Strathern (2000) for a bitter rejection of this process in the British academic domain.

REFERENCES Bacot, François, Paul-François Dubroeucq and Hervé Juvin (1989), Le nouvel âge des marchés français, Paris: Les Djinns. Biais, Bruno, Thierry Foucault and Pierre Hillion (1997), Microstructure des marchés financiers: institutions, modèles et tests empiriques, Paris: PUF. Bloomfield, Robert and Maureen O’Hara (2000), ‘Can transparent markets survive?’, Journal of Financial Economics, 55 (3), 425–59. Boltanski, Luc and Eve Chiapello (1999), Le nouvel esprit du capitalisme, Paris: Gallimard. Boltanski, Luc and Laurent Thévenot (1991), De la justification: les économies de la grandeur, Paris: Gallimard. Boltanski, Luc and Laurent Thévenot (1999), ‘The sociology of critical capacity’, European Journal of Social Theory, 2 (3), 359–78. Boltanski, Luc and Laurent Thévenot (2000), ‘The reality of moral expectations: a sociology of situated judgement’, Philosophical Explorations, 3 (1), 208–31. Borgatti, Stephen P., Martin G. Everett and Linton C. Freeman (2002), Ucinet for Windows: Software for Social Network Analysis, Harvard, MA: Analytic Technologies. Brin, David (1998), The Transparent Society: Will Technology Force Us to Choose Between Privacy and Freedom?, Reading, MA: Perseus Books. Brzoska, Michael (2004), ‘Taxation of the global arms trade? An overview of the issues’, Kyklos, 57 (2), 149–71. Burchell, Graham, Colin Gordon and Peter Miller (1991), The Foucault Effect: Studies in Governmentality, Chicago, IL: University of Chicago Press. Bushman, Robert M., Joseph D. Piotroski and Abbie J. Smith (2004), ‘What determines corporate transparency?’, Journal of Accounting Research, 42 (2), 207–52. Callon, Michel (1998), ‘Introduction: the embeddedness of economic markets in economics’, in Michel Callon (ed.), The Laws of the Markets, Oxford: Blackwell, pp. 1–57. Chateauraynaud, Francis and Didier Torny (1999), Les sombres précurseurs: une sociologie pragmatique de l’alerte et du risque, Paris: Editions de l’EHESS.

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Chng, Michael T. (2004), ‘A model of price discovery and market design: theory and empirical evidence’, Journal of Futures Markets, 24 (12), 1107–46. Cini, Michelle and Lee McGowan (1998), Competition Policy in the European Union, London: Routledge. Commission des Opérations de Bourse (COB) and Commission Bancaire (1998), La transparence financière, Paris: Commission Bancaire. Commission Pérouse (1981), La modernisation des méthodes de cotation, d’échange et de conservation du marché des valeurs mobilières, Paris: La Documentation Française. Conseil d’Etat (1998), Pour une meilleure transparence de l’administration: étude sur l’harmonisation des textes et l’amélioration des droits du citoyen en matière d’accès aux données publiques, Paris: La Documentation Française. Curtin, Deirdre (1998), ‘Democracy, transparency and political participation: some progress post-Amsterdam’, in Veerle Deckmyn and Ian Thompson (eds), Openness and Transparency in the European Union, Maastricht: EIPA, pp. 107–20. De Blic, Damien (2000), ‘ “Le scandale financier du siècle, ça ne vous intéresse pas?” Difficiles mobilisations autour du Crédit Lyonnais’, Politix, 13 (52), 157–81. De Haan, Jakob, Fabian Amtenbrink and Sandra Waller (2004), ‘The transparency and credibility of the European Central Bank’, Journal of Common Market Studies, 42 (4), 775–94. Dean, Mitchell (1996), ‘Putting the technological into government’, History of the Human Sciences, 9 (3), 47–68. Deckmyn, Veerle and Ian Thompson (eds) (1998), Openness and Transparency in the European Union, Maastricht: EIPA. Desrosières, Alain (1998), The Politics of Large Numbers: A History of Statistical Reasoning, Cambridge, MA: Harvard University Press. Domowitz, Ian (1993), ‘A taxonomy of automated trade execution systems’, Journal of International Money and Finance, 12 (6), 607–31. European Banking Federation (EBF) (2000), Begründung der Beschwerde der Bankenvereinigung der Europäischen Union vom 12.12.1999, prepared by Gleisse, Lutz, Hootz and Hirsch Law Firm, presented on 26 July 2000, Brussels: EBF. European Commission (1998), Décision de la Commission du 20 mai 1998 concernant les aides accordées par la France au groupe Crédit Lyonnais, Decision 98/490/CE, Brussels: European Commission. European Commission (1999), Financial Services Action Plan, COM (1999) 232, 11 May, Brussels: European Commission. European Commission (2000), Note to File: Access to Documents – Statistics, D(2000), Secretariat-General, Directorate C, 26 July, Brussels: European Commission. European Mortgage Federation (EMF) (2001), European Agreement on a Voluntary Code of Conduct on Pre-contractual Information for Home Loans, 5 March, Brussels: EMF. Granovetter, Mark (1985), ‘Economic action and social structure: the problem of embeddedness’, American Journal of Sociology, 91 (3), 481–510. Gronbech-Jensen, Carsten (1998), ‘The Scandinavian tradition of open government and the European Union: problems of compatibility’, Journal of European Public Policy, 5 (1), 185–99. Hallerbach, Winfried G. and Albert J. Menkveld (2004), ‘Analysing perceived downside risk: the component value-at-risk framework’, European Financial Management, 10 (4), 567–91.

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Ingrao, Bruna and Giorgio Israel (1990), The Invisible Hand: Economic Equilibrium in the History of Science, Cambridge, MA: MIT Press. International Corporate Governance Network (ICGN) (1999), ICGN Statement on Global Corporate Governance Principles, Frankfurt: ICGN. Lamfalussy, Alexandre (chairman) (2001), Final Report of the Wise Men Committee on the Regulation of European Securities’ Markets, 15 February, Brussels: European Commission. Larsson, Mats and David Lundberg (1998), The Transparent Market: Management Challenges in the Electronic Age, London: Macmillan. Lascoumes, Pierre and Patrick Le Galès (eds) (2004), Gouverner par les instruments, Paris: Presses de Sciences Po. Latour, Bruno (1987), Science in Action: How to Follow Scientists and Engineers Through Society, Cambridge, MA: Harvard University Press. Lee, Ruben (1998), What is an Exchange? The Automation, Management, and Regulation of Financial Markets, Oxford: Oxford University Press. Levi-Faur, David (2005), ‘The global diffusion of regulatory capitalism’, The Annals of the American Academy of Political and Social Science, 598 (1), 12–32. Lodge, Juliet (1994), ‘Transparency and democratic legitimacy’, Journal of Common Market Studies, 32 (3), 343–68. Lordon, Frédéric (2000), ‘La “création de valeur” comme rhétorique et comme pratique: Généalogie et sociologie de la “valeur actionnariale” ’, L’Année de la Régulation, (4), 117–65. Loulmet, Laurence (2004), ‘Le discrédit des banques et l’impact des réformes au Japon’, Revue d’Economie Financière, (75), 263–90. Luque, Emilio (2001), ‘Whose knowledge (economy)?’, Social Epistemology, 15 (3), 187–200. Madhavan, Ananth (1996), ‘Security prices and market transparency’, Journal of Financial Intermediation, 5 (3), 255–83. Madhavan, Ananth (2000), ‘Market microstructure: a survey’, Journal of Financial Markets, 3 (3), 205–58. Majone, Giandomenico (1996), Regulating Europe, London: Routledge. Majone, Giandomenico (1997), ‘From the positive to the regulatory state: causes and consequences of changes in the mode of governance’, Journal of Public Policy, 17 (2), 139–67. Miller, Peter and Nikolas Rose (1990), ‘Governing economic life’, Economy and Society, 19 (1), 2–31. Montagne, Sabine (2000), ‘Retraite complémentaire et marchés financiers aux Etats-Unis’, L’Année de la Régulation, (4), 13–45. Muniesa, Fabian (2000), ‘Un robot walrasien: cotation électronique et justesse de la découverte des prix’, Politix, 13 (52), 121–54. Nel, Hugo and Kaone Lekalake (2004), ‘Monetary policy transparency in South Africa’, South African Journal of Economics, 72 (2), 349–64. Organisation for Economic Co-operation and Development (OECD) (1998), Institutional Investors in the New Financial Landscape, Paris: OECD. Organisation for Economic Co-operation and Development (OECD) (2004), OECD Principles of Corporate Governance, Paris: OECD. O’Sullivan, Mary (2000), ‘Le socialisme des fonds de pension, ou “plus ça change . . .”: Financement des retraites et corporate governance aux Etats-Unis’, L’Année de la Régulation, (4), 47–87.

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Pesaresi, Nicola and Christophe de la Rochefordière (2000), ‘Crises bancaires: un bilan de l’application des règles de concurrence en matière d’aides d’Etat. Leçons de la crise du Crédit Lyonnais’, Competition Policy Newletter (European Commission), (3), 12–26. Peterson, John (1995), ‘Playing the transparency game: consultation and policymaking in the European Commission’, Public Administration, 73 (3), 473–92. Power, Michael (ed.) (1996), Accounting and Science: Natural Inquiry and Commercial Reason, Cambridge: Cambridge University Press. Power, Michael (1997), The Audit Society: Rituals of Verification, Oxford: Oxford University Press. Rose, Nikolas and Peter Miller (1992), ‘Political power beyond the state: problematics of government’, British Journal of Sociology, 43 (2), 173–205. Rowe, Colin and Robert Slutzky (1997), Transparency, Basel: Birkhauser. Sauviat, Catherine and Jean-Marie Pernot (2000), ‘Fonds de pension et épargne salariale aux Etat-Unis: Les limites du pouvoir syndical’, L’Année de la Régulation, (4), 89–113. Saward, Michael (2003), ‘Enacting democracy’, Political Studies, 51 (1), 161–79. Simmel, Georg (1990), The Philosophy of Money, London: Routledge. Strathern, Marilyn (2000), ‘The tyranny of transparency’, British Education Research Journal, 26 (3), 309–21. Thévenot, Laurent (1984), ‘Rules and implements: investments in forms’, Social Science Information, 23 (1), 1–45. Tse, Yiuman and James C. Hackard (2004), ‘Can Island provide liquidity and price discovery in the dark?’, Review of Quantitative Finance and Accounting, 23 (2), 149–66. Wilson, William W. and Bruce L. Dahl (2004), ‘Transparency and bidding competition in international wheat trade’, Canadian Journal of Agricultural Economics, 52 (1), 89–105. Young, Patrick and Thomas Theys (1999), Capital Markets Revolution: The Future of Markets in an Online World, London: FT Prentice Hall.

6.

Transparency, democracy and the SEC: seventy years of securities market regulation Christopher Yenkey

I recommend to the Congress legislation for Federal supervision of traffic in investment securities in interstate commerce. In spite of many State statutes the public in the past has sustained severe losses through practices neither ethical nor honest on the part of many persons and corporations selling securities. Of course, the Federal Government cannot and should not take any action which might be construed as approving or guaranteeing that newly issued securities are found in the sense that their value will be maintained or that the properties which they represent will earn profit. There is, however, an obligation upon us to insist that every issue of new securities to be sold in interstate commerce shall be accompanied by full publicity and information and that no essentially important element attending the issue shall be concealed from the buying public. (President Franklin D. Roosevelt, 29 March 1933, from a letter to Congress urging passage of the Securities Act of 1933)

INTRODUCTION: OPERATIONALIZING TRANSPARENCY AND DEMOCRATIC GOVERNANCE In 1998, half of all US households owned stock in a publicly traded company.1 At the height of the US stock market bubble in 2000, the value of global equity capital markets was approximately US$35 trillion. On an average day in January 2005, 1.6 billion shares worth approximately US$54 billion were traded on the New York Stock Exchange, the largest of scores of such markets in the USA.2 Susan P. Shapiro (1984, p. 1) summarizes the significance of US capital markets: ‘With such astronomical numbers, it would be overkill to present an argument for the enormous significance of the securities markets for the economic viability of this nation.’ All securities offered for public sale, as well as the people, market structures and technologies that facilitate their trade, are regulated by an elaborate system of rules designed to increase transparency in these markets. Few aspects of 122

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modern securities markets are unaffected by transparency related government regulations. But what do we mean when we talk about transparency in this context? How is it manifest in securities markets? What are the strategies behind the government regulations that strive to increase transparency in securities markets, and how do actors with differing interests within these markets respond to them? This chapter explores these questions through an investigation of the regulatory efforts of the Securities and Exchange Commission (SEC). The SEC, operating under the jurisdiction of the US government, implements and enforces regulations that encourage transparent practices in the issuing and trade of securities. I consider relevant examples of SEC regulations in an effort to gain a better understanding of how transparency is operationalized and implemented in this context. A general definition of ‘transparency’ is easy to come by: sharing information and acting in an open manner.3 This definition is not substantially different from others offered in this volume (see Grossman et al. in this volume for an extensive account of the deployment of ‘transparency’ in the economic literature) but transparency in the context of securities markets is uniquely operationalized, including such topics as disclosure of firm characteristics and dissemination of bid and ask prices during the purchase and sale of equities. Here, transparency is concerned with the availability of information capable of affecting market outcomes. In the cases explored below transparency is violated when information having the capacity to alter stock valuation, for example, is not known to all actors in the market. Its goal is to provide all actors with the relevant ‘truth’, whether that is background information about a company one might invest in or seeing all available buy offers when one wishes to sell shares that one already owns. In a transparent market, actors trust they have enough information to make informed investment decisions, but transparency does more than simply facilitate trust between actors. The idea of transparency speaks directly to the primary function of securities markets: the rational distribution of scarce resources to their most productive end. When transparency is not present, information asymmetries can prevent rational allocation of scarce resources. Investors must be able to make informed decisions on where to allocate their resources; if sectors of the market are non-transparent our ability to purposefully allocate resources diminishes. The collapse of energy trading giant Enron Corp is a good example of how transparency is related to rational allocation of resources. In this case, investors are likely to have followed different strategies if they had access to the same information as top executives concerning company operations. The American Institute for Certified Public Accountants reports that Enron’s stock closed at 72 cents per share the day after it filed for bankruptcy, down from $75 per share one

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year earlier: ‘Many employees lost their life savings and tens of thousands of investors lost billions.’4 Our study of how transparency is addressed is a political and sociological one, but the role it plays in these markets is largely economic. The SEC is the primary actor responsible for ensuring that this type of transparency is present in US securities markets. Created by Congressional order in the Securities Exchange Act of 1934, the SEC is ‘concerned primarily with promoting disclosure of important information, enforcing the securities laws, and protecting investors’.5 While both Congress and the SEC are vested with the power to set policies for regulating capital markets, the Commission is responsible for implementing and enforcing Congressional mandates as well as its own policies. As stated by the Commission, the ‘primary mission of the SEC is to protect investors and maintain the integrity of the securities markets’.6 Inherent in this goal is the concept of equality of opportunity, that every investor should have equal access to the information necessary to make informed investment decisions and the equal opportunity to act on that information. Here, transparency not only serves as a mechanism for rational decision-making by market participants, but also facilitates what has come to be known as deliberative democracy. Cohen (1998, p. 186) argues that: Democracy, in the deliberative view, is not exclusively a form of politics; it is a framework of social and institutional arrangements that 1) facilitate free reasoning among equal citizens by providing, for example, favorable conditions for expression, association, and participation; and 2) tie the authorization to exercise public power – and the exercise itself – to such public reasoning.

This conception of democracy moves away from an emphasis on participation in the political process of rule making, focusing instead on democracy as equality of opportunity. In the context of participation in capital markets, I explore transparency and deliberative democracy in two areas, as equal access to information as well as equal opportunity to act on that information. In each of these areas, SEC regulations seek to establish an even playing field on which all market participants have an equal chance to realize positive returns. In this chapter, I argue that these efforts to establish equality of opportunity are the embodiment of democratic governance in the securities markets. As mentioned above, these transparency-oriented regulations seek to provide all actors in the market equal access to ‘truth’, but in a later section of this chapter I consider two barriers to discovering ‘truth’. The first is that not all regulated firms agree with all regulations, and they are able to circumvent them by a number of different strategies outlined below, the most significant of which is delisting from public trading. I also explore

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MacKenzie et al.’s (2005) finitist perspective, which argues that modern, complex organizations are incapable of determining their precise financial situation. This suggests that publicly traded firms, instead of reporting the reality of their current position as required by government regulations, can only present the best approximation of their activities, a process that involves a considerable amount of discretion on their part. In summary, I argue that the goal of transparency regulations in securities markets is the discovery of ‘truth’, but since such absolute knowledge is unlikely, striving for equality in information and market access for all actors is the next best strategy. However, truth and equality is not in all actors’ best interests, which sets up resistance to these regulations and power play between regulators and the regulated.7 In the following two sections, I discuss examples of transparency promoting SEC regulations and how these regulations are greeted by their targeted organizations. I then return to the idea of how SEC regulations facilitate democracy, and conclude the chapter with some final remarks.

ACCESS TO INFORMATION There was little public or government interest in regulating US securities markets before the stock market crash of October 1929. Stock markets in the 1920’s exhibited what John Kenneth Galbraith (1988) calls ‘speculative euphoria’, where post-First World War prosperity led to a wave of unregulated, under-informed market speculation. At that time, there were no government regulations in securities markets requiring disclosure of firm information to investors; instead, many investors traded on hearsay and the assumption that the high rates of return seen in recent years would continue. Disclosure of internal firm characteristics, such as financial statements, executive actions and business strategies were entirely voluntary. A defining characteristic of speculative bubbles is the inevitable crash that marks their end, and 1929 was no exception. The crash wiped out the savings of countless individual investors and banks that invested in the markets. The market lost approximately 70 per cent of its value in October 1929 alone, and 82.6 per cent between that time and July 1932, going from a market valuation high of $89.7 billion to a low of $15.6 billion (Bierman, 1991, p. 120). Individual shareholders, rather than large investment banks or other institutional actors, suffered the worst of these losses. The dramatic decline in equity prices and the devastating losses suffered by investors severely crippled their confidence in the firms and the stock market, and many withdrew from capital markets altogether. This mass exodus from capital markets robbed many publicly

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traded companies of the financial backing necessary for investment and growth in the same time period leading up to the Great Depression when macroeconomic conditions in the USA were not conducive to providing investment capital. In addition to being detrimental to the economic position of numerous US firms, this decline in trust in US securities markets was a potential threat to US national security interests because it reduced its relative economic position internationally. Max Weber (2000 [1924]) noted long ago the strategic importance of maintaining strong capital markets, stating that they were crucial for ‘securing the means to power in each and any economic struggle’ between nations (emphasis in original) (p. 369). In an effort to restore the public trust and revive US securities markets, Congress passed legislation designed to regulate securities markets and to enhance the disclosure of material information that investors could use to make informed investment decisions: the Securities Act 1933 and the Securities Exchange Act 1934. This legislation addressed four fundamental principles: First, that the public should be protected from fraud and manipulation, but with the least possible interference to honest business enterprise. Second, the government’s role should be limited so as not to be construed as an approval or guarantee of any security. Third, no essentially important element attending the issuance of securities should be concealed from the investing public. Finally, persons sponsoring the investment of other people’s money should be held to the high standards of a trustee.8

An early SEC publication describes the Securities Act of 1933 as follows: ‘This Act is designed to compel full and fair disclosure to investors of material facts regarding securities publicly offered and sold in interstate commerce, or through the mails, and to prevent fraud in the sale of securities.’9 In its original form, the Securities Act promoted disclosure through two primary requirements: mandatory registration statements by firms and the preparation of prospectuses by dealers. Registration statements contain information on firms seeking to offer stocks for public purchase, such as descriptions of the firm’s type of business, its assets, liabilities and other relevant financial information, as well as the type and quantity of securities to be offered. Dealers must offer condensed versions of this information in the form of a prospectus to investors interested in purchasing these stocks. The Securities Exchange Act of 1934 expanded on the effort to force disclosure. The 1934 law added proxy solicitations to the list of regulated disclosure documents. These are documents in which shareholders’ votes are sought for the approval of corporate actions, such as the election of directors, at annual meetings. The Securities Exchange Act requires that all

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material facts relating to the action for which votes are solicited be disclosed. In addition, the 1934 law requires that transactions of company stock by company officials and principal stockholders must be publicly reported. It is important to note that the SEC does not guarantee the accuracy of a company’s disclosed information; if an investor suffers a loss as a result of misleading information, however, incorrectly disclosed information is admissible as evidence in a court of law. The 1933 and 1934 laws were crafted in such a way as to try to make them acceptable to any honest businessperson, but there was no small amount of resistance to this new legal framework. Many publicly traded companies threatened to delist their securities from stock exchanges rather than comply with the new regulations. Rather than trade on stock exchanges, firms had the option of moving their securities to over-the-counter markets, which at that time the SEC did not have the authority to regulate. Stocks traded through over-the-counter markets are sold directly to buyers in private markets rather than going through intermediaries such as formal stock exchanges. There was much discussion about how far the SEC could push the issue because a sizeable flight of firms to over-the-counter markets would disrupt the operation of financial markets, in effect defeating the original purpose of the legislation.10 The SEC at this time only had the right to regulate firms listed on traditional stock exchanges; it could neither force firms to list on these exchanges nor prohibit them from leaving these markets and entering the unregulated secondary markets. The proposed regulations were seen to be a benefit for investors, but these gains would not be realized if there was a mass delisting of firms. Therefore, the SEC had to find a way to increase regulatory intensity without disrupting existing markets. They adopted a two-sided approach. First, they compromised on several corporate demands in order to prevent high numbers of delisting. The original provisions were amended in 1936, declaring that firms whose securities were traded before 1 March 1934 were excluded from many of the new disclosure regulations. Another part of the 1936 amendments stipulated that the periodic reporting requirements of the Securities Act would only apply to firms whose securities were valued at more than $2 million. While the Commission and Congress both recognized that these compromises were antithetical to the intent of the original legislation, they admitted that they were a necessary step in implementing a longer-term workable disclosure environment.11 This longer-term vision for compliance relied on the increased legitimacy granted to firms that remained in these markets and met the increased regulatory demands. When investors came to see compliant firms as more trustworthy, they were more willing to invest money in these firms, and this served as a lever for forcing increased compliance by other firms. Rather than legislating

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compliance, the SEC simply installed a system in which compliance to regulations created an environment in which investors sought out transparent firms, stimulating a market demand for SEC compliant firms. The Securities Act and Securities Exchange Act continued to evolve. By 1982, the Securities Act of 1933 had been amended on no fewer than 37 occasions, and many of those amendments changed several aspects of the law. Congress and the SEC were in a process of almost continuous revision as they tried to find the most efficient method of enforcing information disclosure. In 1964, for example, disclosure requirements were extended to include securities traded in over-the-counter markets, bringing this previously unregulated domain under government supervision. Annual reports also came to be seen as important sources of information about a company, and in 1974 the SEC began requiring that certain standard categories of information be included in these reports.12 Amendments to the Securities Act and the Securities Exchange Act required a growing quantity of disclosure documents, so much so that in 1967 the SEC formed an internal study group to make recommendations on how the disclosure requirements of each act could be simplified into a more standardized disclosure process. The result was the development of a system of standardized forms for disclosing particular information.13 Today, there are 37 different standardized registration forms covering requirements of the Securities Act and 17 registration forms that address Securities Exchange Act requirements.14 In an effort to make such an extraordinary amount of information more accessible to investors, the SEC today organizes all disclosure documents by publicly traded firms into a searchable online database.15 Efforts to improve the efficiency of disclosure regulation over the years have also been met with evolving efforts on the part of firms to circumvent these regulations. In the years after the Second World War, for example, many large corporations hired public relations professionals to aid in the use of popular media to influence investor opinions.16 Through publicity campaigns and public relations efforts designed to disseminate information that put the firm in a positive light, firms could circumvent disclosure regulations and create artificial demand for their stock, thus increasing the value of their equities. The SEC was able to prove that this practice constituted intentional misrepresentation of company information in an attempt to mislead investors. This issue was pursued through the courts rather than through additional policy-making, and with a verdict favourable to regulators in the 1968 case of SEC v. Texas Gulf Sulphur, the practice effectively came to an end.17 In addition to pursing regulations arising from Congressional action, the SEC also explores disclosure regulations through its own initiatives. On 23 October 2000, the SEC implemented Regulation Fair Disclosure (Reg

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FD). The Reg FD is an example of how the SEC pursues transparency in the form of information access in modern times. The goal of Reg FD is to end what the SEC calls ‘selective disclosure’, which is the disclosure of material, non-public information to a select group of individuals. ‘Material’ in this sense implies information that is likely to alter a firm’s stock price. A typical example of selective disclosure is when a company official discloses quarterly earnings data to an analyst or other representative from a brokerage that then uses that information to buy the stock if the data is better than expected, or sell the stock in the opposite case. In either case, the ‘insider’ is able to trade according to information not available to other market participants. By the time this information becomes public, the insider has already been able to avoid losses or secure gains that would not have been possible without advance warning. Selective disclosure often results from company efforts to curry favour with analysts, who in return for insider information, issue excessively positive reports about the firm – a practice that typically raises share prices. Then chairman of the SEC Arthur Levitt (2002, p. 87) recognized selective disclosure as an unfair trading practice that unduly benefited industry insiders at the expense of public investors. In its announcement of the final rule, the SEC states: We believe that the practice of selective disclosure leads to a loss of investor confidence in the integrity of our capital markets. Investors who see a security’s price change dramatically and only later are given access to the information responsible for that move rightly question whether they are on a level playing field with market insiders.18

The final rule announcement frames selective disclosure as a practice inconsistent with our earlier definition of deliberative democracy, one where ‘A privileged few gain an informational edge – and the ability to use that edge to profit – from their superior access to corporate insiders, rather than from their skill, acumen, or diligence’.19 Rather than a process that establishes ‘favorable conditions for expression, association, and participation’ among ‘equal citizens’, selective disclosure produces information asymmetries among actors that bestow advantages to industry insiders, thus violating the idea of deliberatively democratic participation in securities markets. The SEC’s answer to this problem is to require that material, non-public information disclosed to one source must also be simultaneously disclosed to the public through a variety of sources, including press releases, public access conference calls in which all interested investors can listen in and webcasts of data releases. Similar to the reduced intensity and delayed implementation of the first round of legislation in the 1930s caused by objections by private firms, the

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case of Reg FD demonstrates how transparency related regulations are negotiated and implemented, with the SEC on one side and publicly traded firms on the other. Even though the government has the ability to adopt the rules it sees fit, private firms retain many options for reacting to the regulations, resulting in a situation where it is often in the government’s best interests to make some compromises in an effort to increase the legitimacy, and therefore voluntary compliance, of its regulations in the eyes of private firms. In his 2002 book, Take on the Street, SEC chairman Arthur Levitt recalls the financial community’s fierce opposition to the new rule as well as the practically unanimous praise it drew from public investors: ‘The agency was inundated with comments – more than six thousand in all, the highest in SEC history. It made a deep impression on me when I saw that the industry comments were almost uniformly negative while the public comments were almost uniformly positive’ (2002, p. 93). Individual investors felt that they were at a disadvantage compared to larger, institutional investors who had insider access to company officials and were able to trade based on information not available to the rest of the market. Institutional investors, on the other hand, were loath to give up their ability to draw on non-public information that increased their ability to realize positive gains. These market insiders claimed that instead of leveling the playing field by reducing the flow of privileged information between firms and themselves, Reg FD would reduce the total amount of information disclosed by publicly traded companies. The Securities Industry Association (SIA), a professional organization representing hundreds of securities firms, led the lobbying efforts against Reg FD by arguing that companies would use the excuse of the fear of liability and prosecution under the new law to cut off all nonessential communications with market actors, effectively reducing the total amount of information available to the markets about a company’s activities. ‘In the view of these commentators, issuers would find it so difficult to determine when a disclosure of information would be “material” (and therefore subject to the regulation) that, rather than face potential liability and other consequences of violating Regulation FD, they would cease informal communications with the outside world altogether.’20 The SEC was not convinced of the severity of such repercussions, but it did compromise on some aspects of the new rule. The SEC responded to industry concerns by better specifying what information is considered ‘material’ and which personnel are restricted from engaging in selective communications, as well as reducing the severity of the penalties incurred should a violation occur. These concessions were meant to ameliorate industry concerns and also reduce the possibility of firms using the new rule as an excuse to not disclose important information to market participants.

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Any discussion of legislative efforts to force transparency in issues relating to disclosure would be incomplete without a discussion of the recent Sarbanes–Oxley Act (S–O Act) of 2002. The wave of corporate scandals in the late 1990s, including multi-billion dollar write-offs by firms such as Enron, WorldCom, Global Crossing and Tyco, created an atmosphere ripe for legislative action not experienced since the stock market crash of 1929 resulted in the passage of the Securities Act and Securities Exchange Act in the early 1930s. In a clear example of how the political environment can influence transparency related issues, Senator Paul Sarbanes introduced the legislation, which proposed a revamping of corporate governance regulations, to the Senate in early June 2002, just following the Enron collapse. This bill received little support until a few weeks later when it was announced that WorldCom had also restated its corporate earnings, reducing its earlier estimates by almost $4 billion. Following this news, public outrage was strong and sudden, resulting in a climate where Congressional action was all but guaranteed; as Texas Senator Phil Gramm noted at the time, ‘In the environment that we’re in, virtually anything could have passed the Congress’ (Bost, 2003, pp. 4–5). One year after the passage of the S–O Act, North Carolina Senator Watt notes the manner in which the legislation was drafted and approved: ‘While the law is working, it was drafted in a rushed response to some tremendous scandals. I believe it is very appropriate for this Committee to revisit this work and recognize that it may need to be improved in the future.’21 The S–O Act was passed on 30 July 2002, and the SEC implemented its provisions between August 2002 and July 2003. The Act focuses regulatory efforts on two major issues: increasing the independence and integrity of the accounting industry and executive endorsement of financial statement disclosures. Our discussion here will focus on the latter. The SEC implemented section 302 of the Act on 27 August 2002. This regulation stipulated: Section 302 of the Sarbanes–Oxley Act requires the principal executive and financial officers of a company filing periodic reports to certify in each quarterly and annual report, among other things, that the report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, not misleading, and the financial statements, and other financial information included in the report, fairly present in all material respects the financial condition and results of operations of the company.22

Section 404 of the Act, made effective by the SEC on 27 May 2003, stipulates that company management must submit an annual report discussing how the company controls its financial reporting, as well as a review of how its independent audits were conducted for that year.23 Section 906 of the

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Act makes it a criminal offence to knowingly falsify financial information in these periodic reports. The passage of the S–O Act has led to the reemergence of the issue of firms delisting from stock exchanges. The threat of joining unregulated over-the-counter markets made by firms in the 1930s is no longer valid since these markets came under SEC regulation in 1964. Now some firms consider trading their publicly traded status for a return to private ownership. Reports in the popular business press indicate there is a significant debate going on currently between regulators and publicly traded firms. Firm representatives frequently cite the significant financial costs of compliance with the Act, and small firms especially find that providing all the necessary certifications of internal controls and outside audits is costly and time consuming. Critics of the S–O Act argue that the unreasonable and costly nature of compliance with Sarbanes–Oxley leads firms to delist from stock exchanges and revert back to private ownership. One private report issued in April 2003 states that the rate of businesses reverting to private ownership increased 26 per cent after passage of Sarbanes–Oxley, a direct result of the increased cost of compliance needed to remain publicly traded.24 A December 2004 study by professors at University of Pennsylvania’s Wharton School of Business claims that 198 firms chose to delist in 2003 compared to only 67 in 2002.25 The Wall Street Journal quotes the latter report, stating ‘We basically find that going dark can serve as a way to conserve cash but it may also be exploited by insiders trying to avoid the scrutiny of the market.’ Leuz [the Wharton professor quoted in the abovementioned article, author’s note] suggested this was because ‘they are not managing the firm in the most efficient way or because their compensation is excessive’. The SEC recognizes that these requirements are disproportionly difficult for smaller firms, and not unlike the concessions made to some firms over issues of disclosure compliance from the 1930s legislation, they somewhat reduced the demands made on smaller firms. For example, firms with less than $75 million in market capitalization were given until 15 July 2006 to demonstrate compliance, the equivalent of a one-year extension.26 However, many top policy-makers disagree with the idea that firm delisting is counterproductive to the effort to increase transparency or efficiency in capital markets. Former Federal Reserve Bank Chairman Paul Volcker and former SEC chairman Arthur Levitt argue that just such a migration of some smaller firms back to private ownership could be good for the health of the securities market: In any other time but the overheated markets of the past decade, they [small firms] would not have gone public in the first place. Our hunch is that Sarbanes–Oxley

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is but an excuse for a movement into private control that should occur anyway. Furthermore, if a company does see the certification of the effective internal controls as a burden, then it should neither be public nor attracting investor’s money.27

These comments indicate that regulatory efforts aimed at improving market performance via increased transparency are not synonymous with facilitating capital-raising efforts by all firms. Instead, the regulatory effort aims to protect the viability of the market as a whole, even if that means sacrificing some currently traded companies.

ACTING ON INFORMATION In addition to the role disclosure plays in facilitating transparency through access to information, there is also a role for transparency in regulating the trading behaviour of actors on stock exchanges and in other marketplaces. This section investigates SEC regulations that define acceptable trading behaviour in capital markets, as well as how trading systems change over time in order to facilitate the highest level of transaction related transparency possible. Here I add to the earlier issue of information disclosure a description of how market participants interact with each other to complete exchanges of securities. This is an additional aspect of transparency in securities markets. Not only do actors seek information on publicly traded companies, they also work to discover the bid and ask prices of as many buyers and sellers in the market as possible. In this aspect of market participation, exposure to as many other market participants as possible is an important aspect of transparency. The Securities Exchange Act of 1934 contained the first federal rules that governed stock market transactions. The preamble to the Exchange Act states its primary goal: ‘An Act to provide for the regulation of securities exchanges and over-the-counter markets operating in interstate and foreign commerce and through the mails, to prevent inequitable and unfair practices on such exchanges and markets.’28 In 1933, before passage of the Exchange Act, The Wall Street Journal accurately summarized Congress’s regulatory strategy: ‘This preliminary thinking seems to point toward some plan of setting up a group of uniform exchange standards and perhaps an enactment to see that all exchanges adopt these standards.’29 The first provision of the Exchange Act is that all market participants must register with the SEC, including stock exchanges and other marketplaces; dealers, who buy and sell securities for and from their own portfolios either for themselves or for clients; and brokers, who are responsible for completing the transactions on behalf of dealers.30 Another major

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provision of the Exchange Act is the prohibition of unfair trading practices. ‘Practices such as manipulation and false and misleading statements are prohibited. Other practices such as short sales, market pegging, etc., are regulated.’31 A technical description of such practices is beyond the nature of this chapter; the important point is that those who execute investors’ transactions are in a position where it would be possible to influence stock prices rather than let them be determined by fair market conditions. Exchange Act regulations work towards the goal that all market participants’ interests should be evenly represented. This effort is directly related to equality of opportunity within the markets, which fits our view of how SEC regulations work to establish a system of deliberative democracy in securities markets. In addition to the goals stated in the preamble of the Exchange Act cited above, Section II of the Exchange Act lists ‘the maintenance of fair and honest markets’ among its goals.32 This language is found frequently in SEC regulations, and I argue that it speaks directly to the government’s efforts to facilitate a market environment that operates in a manner consistent with the principles of deliberative democracy described earlier. In the early decades of market regulation, the SEC’s approach was to establish standardized rules and let each stock exchange govern itself according to those rules. The government felt it would be more efficient to set rules by which all markets must abide, but then let each exchange selfgovern: ‘the committee experts are very well aware that the governors of a stock exchange have far greater authority to enforce good conduct among its members than could be imposed by any set of laws which either federal or state authority possibly could pass’.33 The stock exchanges were designated ‘self-regulating organizations’, and as long as they kept order within their boundaries the SEC was content to allow them to self-govern. By the early 1970s, however, trading practices and market structures had changed sufficiently to warrant changes in this regulatory structure. The illustrative case I consider here is the creation of the National Market System (NMS) in the 1970s. The NMS was a Congressional initiative pursued by the SEC that links stock exchanges to each other so sales of stocks in each exchange are exposed to buy and sell offers on other exchanges around the country. When transacting in securities markets, seeing and being seen by other market participants is an important aspect of transparency. Before the establishment of this system, each exchange operated independently, which had negative implications for transparency and market efficiency. When an offer to buy or sell a security is only exposed to a small number of possible exchange offers, the sale price is likely to be less than would be the case if more potential buyers were exposed to the sell offer; the opposite is true for buyers – fewer sellers implies that only those

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charging higher than equilibrium prices are willing to sell. In order to effect efficient transactions, all possible sellers must be exposed to all possible buyers and vice versa. Such is the purpose of linking all exchanges through the NMS, increasing transparency in the sense of increasing the number of market participants visible to each other. While the idea of increasing transparency in this manner was theorized at an earlier date, the technology for building such a system was not feasible until the 1970s. At the heart of the system is a computer-driven national composite quotation system where all buy and sell orders for a security are listed in one location. Inherent in this system of visible bids and offers is the idea of increased efficiency through fostering competition. When more sellers and buyers are visible to each other, they improve their chances of obtaining higher selling prices or lower buying prices, a process that is facilitated by this type of transparency in the market. Not surprisingly, however, there was resistance to such a system. Stock exchanges operate as business entities themselves, charging commissions on the sale of each share transacted on their sales floor. If a better price is found on another exchange through such a national system, the exchange loses the commission that comes with the execution of that transaction. The New York Stock Exchange accounted for approximately 80 per cent of all stock transactions in the early 1970s, and the SEC recognized that they would not willingly part with their market share: Given the market making importance of the specialists on the floors of the two New York exchanges, this approach recognized that meaningful competition will not come about quickly and may never develop unless potential competitors have the means actively to display their trading interests to the world at large. It appeared, therefore, that a composite quotations system along the lines suggested by the Advisory Committee on Market Disclosure would substantially serve this purpose.34

The idea of a national market linkage developed into a communications link between exchanges known today as the Intermarket Trading System (ITS). This computerized system began operations in 1978, linking the New York and Philadelphia exchanges, allowing trading of fewer than 20 stocks. The idea was to allow exchanges to test the new system on a small scale and then expand the system to include more exchanges and more cross-listed stocks as confidence in the system grew. The exchanges, however, did not meet the SEC’s requirements for self-expansion of the system. This was due to disagreements on how the market would be structured, which were caused by an inability to reach collective agreement on issues relating to the protection of individual exchanges’ interests. The stalemate is analogous to the earlier threats by firms to delist; existing powerful interest groups feared

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a loss of power and revenue with the new regulations and sought to delay their implementation. But instead of resulting in a compromised version of the regulation, this resistance led to a more forceful SEC mandate in 1981 requiring all stock exchanges be linked with the over-the-counter markets. Such a mandate was the upshot of the SEC’s belief that ‘because of its ability to permit market participants to send orders from one market to another, [ITS] was consistent with national market system goals and, if efficiently linked with all markets, could become a permanent feature of a national market system’.35 Today, this computerized system links nine exchanges and facilitates trades in stocks available through each of the exchanges.36 Volumes could be written about current efforts to reform intermarket linkage systems, but for our conceptual focus here, the fundamental issue is to demonstrate that transparency is also related to an ability to transact within the market as well as the need for information about the securities to be traded. The SEC summarizes how this form of transparency serves the interest of US capital markets: ‘The commission has long believed that transparency – the real-time, public dissemination of trade and quote information – helps to link dispersed markets and improves the price discovery, fairness, competitiveness and attractiveness of US markets.’37

DEMOCRATIC GOVERNANCE IN AN ENVIRONMENT OF IMPERFECT EQUALITY The cases explored in this chapter share an important central theme; they are all regulations focusing on decreasing the advantage of market insiders relative to individual investors. Through decades of disclosure regulation, from the original Securities Act of 1933 to the more recent Regulation Fair Disclosure and Sarbanes–Oxley Act in the twenty-first century, the regulatory philosophy has been that efforts by insiders to unfairly benefit from their positions of power, whether by issuing misleading information to investors or engaging in unscrupulous trading practices, would not stand up to public scrutiny. These attempts to facilitate equality of opportunity are indicative of an effort to establish democratic governance in capital markets by promoting an environment in which all actors have an equal chance to benefit because of the decreased dominance of powerful interest groups. However, it is important to recognize the limits of any governance structure, including an intendedly democratic system supported by transparency augmenting government regulation. Transparency in this chapter has been discussed as a mechanism for decreasing uncertainty in capital markets, thus facilitating market participants’ ability to make informed investment decisions. I argue, however, that

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while the presence of transparency increasing regulations increases our ability to rationally allocate resources, such regulations guarantee neither complete disclosure nor positive returns. In fact, they do not seem able to produce consistently rational behaviour. Even after decades of evolving regulations, the stock market experienced another crash in 1987 and 1920sstyle speculation in technology stocks during the 1990s produced a bubble that burst in the early months of the new millennium; following these events was a wave of investor losses resulting from the corporate accounting scandals headlined by Enron, Worldcom, Tyco and others. On a separate occasion, Federal Reserve Chairman Alan Greenspan sent a brief wave of panic through investors when he warned of ‘irrational exuberance’ in the stock markets in the late 1990s.38 Events such as these highlight the tension between transparency and performance in these markets. At times, disclosure of well-intended ‘truth’ can lead to reduced short-term performance, as was the case with Greenspan’s comments, and the tension between regulators and the regulated can lead to market disruptions, as noted above in the case of firm delistings in the 1930s and currently. It is therefore both logical to conclude and consistent with President Roosevelt’s original idea that transparency enhancing regulation cannot guarantee positive returns. Donald MacKenzie et al. (2005) apply the ‘finitist’ sociological perspective to an analysis of accounting systems used by modern corporations to argue that it is impossible to ever ascertain the ‘truth’ about complex modern firms. The authors argue that in an environment where complex organizations attempt to conform to highly specified legal reporting requirements, the information disclosed by firms is not ‘truth’ per se, but rather information ‘constructed by accountants and by others, and discretion in the way they are constructed may be ineliminable’ (MacKenzie et al., 2005, p. 4). The authors continue, ‘finitism is wholly consistent with the view that there is an “economic reality” to corporations that is affected by accounting classifications but not constituted in its entirety by those classifications’ (ibid., p. 11). While the regulatory environment is extensive in US securities markets, with disclosure requirements and restrictions on trading practices far too numerous to mention here, the finitist perspective points out that it can never be exhaustive. Even with scores of mandatory disclosure forms, Congress and the SEC are unable to legislate perfect information; and if ‘truth’ is never actually attained, the market cannot be perfectly transparent. If we can never be completely transparent, then, can the market still be said to be democratic? The discussion so far has largely centred on the role that transparencyoriented regulations play in increasing equality among actors in securities markets, but in light of the finitist argument, it is now necessary to consider the effects of unavoidable inequalities between actors in this context.

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Ronald Glassman (1989) considers the impact of inequality on society in today’s era of declining legitimacy of socialist governance and the spread of democratic, and more importantly capitalist, systems. Glassman quotes John Maynard Keynes’s views on the role of inequality in capitalist economies: ‘For my own part, I believe that there is social and psychological justification for significant inequalities of income and wealth, but not for such large disparities as exist today’ (Keynes, cited in Glassman, 1989, p. 70). Glassman also considers Aristotle’s concept of distributive justice and proportionate equality (1989, pp. 7–41). Aristotle’s idea of distributive justice centres on reaching a balance in the distribution of property; proportionate equality is the idea that society should materially reward those demonstrating high levels of ability, but society should also discourage the severe inequalities that result from pure competition and elitism. I argue that both of these concepts are visible in the intent of the regulations examined here. Aristotle’s suggested social arrangement for avoiding these inequalities also conforms to our area of focus; he advocated a system of public property with private ownership, a practice embodied in a capital market system of private ownership of publicly traded companies. Weber (2000 [1924]) spoke more directly to the governance of modern capital markets, going so far as to argue that individual investors with little experience, those same investors that the SEC so ardently seeks to protect, are a hindrance to the efficient operation of stock exchanges. Instead, Weber argued that a class of professional traders with specialized knowledge should be fostered, and once established, would form their own social norms that could govern the market. Weber (2000 [1894, 1924], p. 334) wrote that allowing well-financed capitalists to control the stock and commodity exchanges would lead to ‘the emergence of a unified view of what are or are not “honorable business practices” on the exchanges’. While there are elements of such a system in the designation of stock exchanges as self-regulating organizations, which the SEC gives considerable autonomy as long as they maintain order within their boundaries, we can also see the role played by such elites in the numerous price-fixing and corporate accounting scandals of recent decades. It would seem that Weber straddles the line between good theoretical ideas and a naiveté regarding the need for state involvement to maintain orderly markets. This discussion of balancing equality and democracy is directly relevant to our analysis here, especially in light of MacKenzie’s finitist perspective. I do not argue that transparency enhancing regulations in securities markets will provide absolute transparency in these markets or facilitate a system of complete equality in which all actors can expect equal and positive rates of returns. President Roosevelt, cited in the opening quotation, stated in 1933 that these regulations should not be construed as a government guarantee

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of positive profit. Instead, in the context of modern capital markets, there exists a significant effort to install a regulatory environment that, while neither perfect nor complete, enhances expectations of transparent transactions and facilitates a greater degree of democratic market participation and access to information that can augment rational decision-making. Pure democracy does not rein in securities markets, but elements of a system of deliberative democracy, such as the one described above by Cohen, are observable in the government’s efforts to oversee capital markets. Such a regulatory system is unique to situations where actors have different resources available for their actions, as is the case here with the government’s legislative and enforcement abilities on one side and publicly traded firms’ ability to take evasive action in order to circumvent regulatory pressure on the other. This type of system stands in contrast to those in which more equal actors must reach a compromise before an action is adopted (see Thedvall’s chapter in this volume for such an account).

CONCLUDING REMARKS: EVOLVING POLICIES AND UNCHANGING GOALS The examples of SEC regulations considered in this chapter provide a basic understanding of how transparency is operationalized in securities markets, how the government works to implement regulations, and of the trading environment these regulations are intended to create. The definition of transparency as information sharing and acting in an open manner consists, in this context, of firm disclosure, equal access to this information for all market participants, visibility of all possible exchange partners, and the expectation that no actors will engage in unfair trading practices. Equality among market participants by no means guarantees benefits to any investor, but it does facilitate a more democratic marketplace and the rational allocation of resources. The above examples of transparency-oriented regulation show that the government’s evolving efforts to achieve unchanging goals, exemplified here in the case of almost continuous amendment of information disclosure regulations as well as entirely new regulatory efforts designed to address changing market conditions, are observable in US securities market regulation. It is reasonable to think that additional strategies for enhancing transparency will be devised and implemented in the future. We will likely see new structural and technological developments arise in the execution of stock trades, and in the absence of a shift in political or ideological orientation to how these markets are perceived, however, it is reasonable to expect parallel adjustments in the regulatory scheme.

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Similarly, our discussion of how these regulations seek to establish an environment of deliberative democracy in these inherently unequal markets is likely to offer many insights into how these markets will be governed in the future. Just as the government’s conception of what constitutes a ‘transparent’ market has changed over time, evidenced by the expansion of regulated domains, its policy strategy for how to construct a fair marketplace changes as well. It can be said that while disclosure regulation is pursued in different ways over time, the goal of the regulations remains consistent. This regulatory evolution is matched, however, by an ongoing tension between regulators on one side and publicly traded firms and trading professionals on the other, an opposition rooted in the divergent interests of different market participants and one that is unlikely to fade with time.

NOTES 1. 2. 3. 4. 5. 6. 7.

8. 9. 10. 11. 12. 13. 14.

15. 16. 17. 18. 19. 20.

From the Federal Reserve Board’s 1998 Survey of Consumer Finance, in Levitt (2002, p. 245). Statistics courtesy of New York Stock Exchange: www.nyse.com/marketinfo/datalib. In a demonstration of just how this term can be defined similarly across domains, I adopt this definition from the Center for Philanthropy and Nonprofit Research, www.npgoodpractice.org/. www.aicpa.org/info/birdseye02.htm, accessed on 23 November 2004. See www.sec.gov/about/whatwedo.shtml. Ibid. The efficacy of government regulation of securities markets is a contentious issue, naturally and frequently putting regulators and regulated on opposing sides of many issues. Rather than attempting to reach a judgement of the quality of such regulations, I use their adoption, as well as the events leading up to and following, as a starting point from which to investigate the behavioural effects they have on different actors. Report of the Advisory Committee on Corporate Disclosure to the Securities and Exchange Commission, 1977, pp. 557–8. ‘The work of the Securities and Exchange Commission’, September 1940. See the SEC’s ‘Report on unlisted trading’, 1936. ‘Report of the Advisory Committee on Corporate Disclosure to the Securities and Exchange Commission’, 1977, pp. 585–87. Ibid., pp. 616–17. Ibid., pp. 614–15. Not every firm has to fill out each form. For example, some forms are applicable only to foreign firms listed on US exchanges, while other forms deal with annual reports, quarterly reports or other specialized circumstances. See www.sec.gov/info/edgar/ forms/edgform.htm#table1 for a listing and descriptions of all forms. See www.sec.gov/edgar/searchedgar/webusers.htm for more information. ‘Report of the Advisory Committee on Corporate Disclosure to the Securities and Exchange Commission’, 1977, pp. 606–8. Ibid., pp. 606–7. SEC Final Rule: Selective Disclosure and Insider Trading, p. 2. Ibid., pp. 2–3. Ibid., p. 5.

Transparency, democracy and the SEC 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38.

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‘Accounting under Sarbanes–Oxley: are financial statements more reliable?’, Hearing held before the Committee on Financial Services, US House of Representatives, 17 September 2003, p. 5. ‘Commission proposes amendments regarding CEO, CFO certification under Sarbanes–Oxley’, SEC press release, 21 March 2003. ‘Summary of SEC actions and SEC related provisions pursuant to the Sarbanes–Oxley Act of 2002’, SEC press release, 30 July 2003. ‘Sarbanes–Oxley Act spurs public-to-private trend’, The Oklahoma City Journal Record, 29 April 2003, p. 1. ‘Delistings soar in 2003, study shows’, The Wall Street Journal, 15 December 2004, p. 1. ‘Moving the market: Sarbanes–Oxley delay granted’, The Wall Street Journal, 3 March 2005, p. C3. ‘In defense of Sarbanes–Oxley’, The Wall Street Journal, 14 June 2004, p. A16. This passage reflects the 1964 amendment that brings over-the-counter markets under SEC jurisdiction. ‘Exchange study ready to start’, The Wall Street Journal, 7 October 1933, pp. 1–2. See Section 3 of the Securities Exchange Act of 1934 for definitions of all regulated actors in the market. ‘The work of the Securities and Exchange Commission’, September 1940, p. 6. See www.sec.gov/about/laws/sea34.pdf for full text of the Securities Exchange Act. ‘Exchange study ready to start’, The Wall Street Journal, 7 October 1933, pp. 1–2. ‘SEC Advisory Committee report on a central market system’, Federal Securities Law Reports, no. 469, 9 March 1973. ‘Final rule: adoption of amendments to the Intermarket Trading System plan to expand the ITS/computer assisted execution system linkage to all listed securities’, SEC press release, 14 February 2000. See www.itsplan.com for the complete Intermarket Trading System plan. ‘SEC market 2000 study’, chapter IV-1, in Bloomfield and O’Hara (1999, p. 5). ‘The challenge of central banking in a democratic society’, remarks by Chairman Alan Greenspan at the Annual Dinner and Francis Boyer Lecture of the American Enterprise Institute for Public Policy Research, Washington, DC, 5 December 1996.

REFERENCES Bierman, Harold Jr (1991), The Great Myths of 1929 and the Lessons to be Learned, New York: Greenwood Press. Bloomfield, Robert and Maureen O’Hara (1999), ‘Market transparency: who wins and who loses?’, The Review of Financial Studies (Spring, 1999), 5–35. Bost, Thomas G. (2003), The Sarbanes–Oxley Act: A Summary, Washington, DC: National Legal Center for the Public Interest. Cohen, Joshua (1998), ‘Democracy and liberty’, in John Elster (ed.), Deliberative Democracy, Cambridge: Cambridge University Press, pp. 185–231. Galbraith, John Kenneth (1988), The Great Crash 1929, Boston, MA: Houghton Mifflin Company. Glassman, Ronald (1989), Democracy and Equality: Theories and Programs for the Modern World, New York: Praeger. Levitt, Arthur (2002), Take on the Street, New York: Pantheon Books. MacKenzie, Donald, David Hatherly and David Leung (2005), The Finitist Accountant: Classifications, Rules and the Construction of Profits, Working Paper, University of Edinburgh, School of Social & Political Studies.

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Shapiro, Susan P. (1984), Wayward Capitalists: Target of the Securities and Exchange Commission, New Haven, CT: Yale University Press. Weber, Max (2000 [1924]), ‘Commerce on the stock and commodity exchanges’, Theory and Society, 29, 339–71. From Gesammelte Aufsätze zur Soziologie und Sozialpolitik, Tübingen: Verlag von J.C.B. Mohr, pp. 289–322. Translated by Steven Lestition. Weber, Max (2000 [1894, 1924]), ‘Stock and commodity exchanges’, Theory and Society, 29, 305–38. From Gesammelte Aufsätze zur Soziologie und Sozialpolitik, Tübingen: Verlag von J.C.B. Mohr, pp. 256–388. Translated by Steven Lestition.

7.

Transparency at work: the production of indicators for EU employment policy Renita Thedvall

INTRODUCTION: ‘TRANSPARENCY’ ACROSS EUROPEAN LABOUR MARKETS Within the European Union (EU) member states are currently striving to co-ordinate their labour market policies. To do this, the members of the EU have developed a strategy for employment policy that should guide employment policy in the member states. This strategy is commonly known as the European Employment Strategy and includes the EU employment guidelines that are supposed to guide member states’ labour market policies.1 The EU employment guidelines are initiated by the European Commission,2 and discussed and negotiated in one of the EU committees, the Employment Committee,3 and its working groups the Indicators group and the Ad hoc group,4 and decided on by the member states in the Council of the European Union.5 The guidelines are then to be implemented in the member states. In relation to the guidelines, there are indicators developed to monitor and assess progress within member states and between member states. These indicators are developed, discussed and negotiated in the Employment Committee mentioned above, and are used as tools for making policies more ‘transparent’, in the sense that the outcomes of policies are made visible through measurable indicators in statistical diagrams and tables. The process of developing indicators to make EU labour market policies transparent is the focus of this chapter. (For related discussions of the wide use of transparency, in proposing and enforcing new configurations of economic life and in the regulation of markets, see the chapters by Garsten and Lindh de Montoya, Grossman et al. and Yenkey in this volume.) I have followed the process of developing indicators in the Employment Committee during 18 months; first through holding a trainee position in the Commission during the autumn of 2001, and then as a ‘member’ of the 143

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Swedish delegation both at the preparatory meetings at the Swedish Ministry of Industry, Employment and Communication, and at the Employment Committee meetings during 2002. At the time, particular focus was placed on developing ‘quality in work’ indicators in the Employment Committee. The material below is based on my fieldwork in the Employment Committee and the working groups of the Council6 during these 18 months. As pointed out in the introduction to this volume, the concept of transparency has something to do with making things seen, making visible and laying bare things that have not been seen before. It is to do with openness. Transparency has become a buzzword during the past 10 to 15 years, and part of its attraction has to do with ‘its power as a mechanism for revelation, disclosure, and cleansing’ (Garsten and Lindh de Montoya, 2004, p. 5). The idea of transparency has spread in international organizations such as the United Nations, the EU, the International Monetary Fund, the World Trade Organization and the World Bank. Non-governmental organizations (NGOs) also rank states and corporations according to, for example, their level of corruption (as Transparency International7) or their level of pollution (as the US Environmental Defence Fund) (Florini, 2003, p. 62; Sanders and West, 2003, p. 1). Private corporations are constantly required, both by governments and NGOs, to be financially transparent and to provide information about workers’ conditions and environmental practices (Florini, 2003, pp. 33–6). Transparency may thus be discussed as regulation by revelation (Florini, 2003, p. 34). By making information about policy-making processes, decision-making, environmental and labour practices, or budgets accessible to the public, governments and corporations are forced to be responsible and trustworthy. One way the EU currently tries to make policies more transparent is to use statistics and indicators. The use of these is based on the idea that numbers are politically neutral and that they are easy to compare (Miller, 2001, p. 382; Porter, 1995, p. 8). Developing indicators may in fact be seen as a response to the demands for transparency. The trend labelled audit society or audit culture (Power, 1997 [1999]; Strathern, 2000a), implies that both individuals and organizations are becoming subject to increased scrutiny and control. Various types of control systems have begun to play an important public role, and individual and organizational performance are being increasingly formalized and made auditable. In the case of EU employment policy, statistical diagrams and tables are routinely used so that citizens and member states’ representatives are able to statistically follow how their member state performs compared with other member states. This procedure is supposed to give the policy-making process legitimacy and thereby make it democratic. As Power points out, the idea

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of assessing and monitoring through, for example, auditing is done in the name of someone (Power, 1997 [1999], p. 127). It is based on the lack of trust in a process, and auditing is believed to restore this trust and make the process more open and transparent (Power, 1997 [1999], p. 122). Making things transparent becomes a line of reasoning legitimising the policy process within the EU (see, for example, Power, 2003). However, it is important to ask what transparency really means. The concept of transparency gives the impression of being all good and neutral. However, as Strathern states, there is nothing innocent about the idea of transparency, and in making the invisible visible through numbers (Strathern, 2000b, p. 309, also see Garsten and Lindh de Montoya, 2004, p. 12). Sanders and West (2003, p. 16) point to the fact that processes may also be hidden in the name of transparency, and introduce the term ‘veil of transparency’ (Sanders and West, 2003, p. 26). This chapter is about what remains unseen beneath the veil of transparency, that is the conflicts, negotiations and compromises that have to be made in order to produce transparency. The actual process of developing indicators is important here since it is in this process, before the indicators are fixed, that what should be seen and what should not been seen is negotiated. In the Employment Committee meetings, member states and the Commission discuss what indicators may or may not be used to evaluate, audit and compare member states. The Employment Committee’s work on indicators seems, in many ways, to be about how transparent member states want to be, and for what they want to be accountable. Member states hardly ever want to look bad, that is, to have what they feel is a poor score in the comparisons made between the member states in the EU in the statistical tables and diagrams that are produced. This fact brings the political dimension of the idea of transparency to the surface. What shall be on display, and what shall remain hidden?

PRODUCING POST-NATIONAL INDICATORS The concept of transparency and the use of statistics and indicators, as discussed above, are based on an idea that numbers are politically neutral. There is, in the EU, trust in numbers and their ability to reflect the outcome of political decisions. It is understood that when a good definition and the right source are found, the comparisons will be impartial and the member states will accept the indicator. The impartiality and neutrality is to be guaranteed by the experts in the Employment Committee. However, the production of statistics is not politically neutral. The concepts of ‘good definition’ and ‘robust data’ are not objective entities, but reflect the

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surrounding environment. Indicators are produced in a political and cultural context that has an impact on the outcome. In addition, in a multinational committee, the formulation of indicators is not only coloured by different political opinions but also by ‘national’ opinions. The member states are being compared with each other, and have both a national and a European interest in having ‘good’ figures: national, in the sense that the European definitions of indicators have to correspond to the national definitions and be in line with national politics, and European, in the sense that member states want to do well compared to other member states. This makes agreement on the indicators even more problematic, as both competition among member states and the correspondence between European definitions and the national politics of the member states have to be taken into account. Thus, in order to take the national contexts into consideration, one idea by the ministers of the member states in the EU was to differentiate between ‘key’ and ‘context’ indicators.

‘KEY’ OR ‘CONTEXT’ INDICATORS? The idea of ‘key’ and ‘context’ indicators is interesting in several ways. Sometimes there are no available EU statistical databases that measure what the members want to measure. Instead, national databases, such as Statistics Sweden in Sweden, might be used. However, national data is not always considered to be comparable between member states since member states have different statistical definitions. If this is the case, it is possible to term the indicator a ‘context’ indicator to signal that it is not comparable between member states. The ‘context’ indicators were then only to be used in regard to ‘trends’, that is, to measure if member states do better or worse from one year to another and then compare these results with the other member states. The purpose of the ‘context’ indicators was to illustrate the ‘key’ indicators and dig a bit deeper. They were said to be more specific and more tuned to the national context. This arrangement suited the members that wanted to develop more indicators and it also suited the members that did not want to develop more indicators. For those who wanted the indicators, the division between ‘key’ and ‘context’ made it possible to agree on ‘context’ indicators in areas that might not otherwise have had an indicator at all. For the members who did not want the indicators, the division between ‘key’ and ‘context’ made it possible to argue for the ‘context indicator alternative’ whenever possible. Otherwise they might be forced to agree on ‘key’ indicators in more areas, since the ministers had asked them to find such. For them it also meant that

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since the ‘context’ indicators were based on national data, the member states would have more control over the data since it was produced within the member states. The arguments put forward in the Committee meetings were coloured by all these different possible interpretations of the use of ‘key’ and ‘context’ indicators. In the meetings members had to keep in mind what the outcome of different definitions of ‘key’ indicators and ‘context’ indicators might be, and how they might be used. In one Employment Committee meeting (4 October 2001) the members were, again, wondering what the difference between the two different indicators actually was, and they were clearly concerned about how the two different indicators were to be used. One of the Spanish delegates asked if both of them were obligatory for member states. The delegates from the United Kingdom and the Netherlands quickly followed the Spanish delegate’s argument. The Dutch delegate wondered if the ‘context’ indicators were to be voluntary. The delegates from France and Belgium tried to explain. They both emphasized that the ‘context’ indicators only were to measure trends within states, not the national results. One of the Belgian delegates said: ‘Context’ indicators should take into account the national differences. The ‘context’ indicators allow us to adjust the ‘key’ indicators to the national level. This is how I understand it. We agree with France. ‘Trends’ should be evaluated, not the national results, otherwise we might judge member states that are good at reporting for example ‘accidents at work’. (Employment Committee meeting, 4 October 2001)8

Member states were worried about how the ‘context’ indicators were to be used and what they would have to report. ‘Context’ indicators were to be used when the members could not find data and definitions that were considered comparable between member states or, to put it another way, not politically possible to agree on. ‘Context’ indicators might in that sense become even more politically sensitive than ‘key’ indicators, not just because they are being used in politically sensitive areas, but also because the national ‘trends’ will still be compared. The representative from the Commission tried to calm the member state delegates by pointing out that the ‘context’ indicators only were enrichments and that member states could pick and choose from the indicators. She said: Regarding the differences between ‘key’ and ‘context’. ‘Key’ indicators are references to principles we have agreed on. It’s on the basis of them that we make joint analysis so that we have something to make policy on. ‘Context’ indicators are enrichments. Member states can pick and choose from the context indicators. They’re domestic indicators. (Employment Committee meeting, 4 October 2001)

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However, in the next Employment Committee meeting (20–21 November 2001) the Commission’s representative was a bit more specific on how the ‘context’ indicators were to be used. They were not, in practice, for member states to pick and choose. The ‘context’ indicators were to be used in the National Action Plans.9 She said: ‘The “key” indicators should be included in the NAPs [National Action Plans]. The “context” indicators should also be included in the NAPs. They will not have the same value as the “key” indicators, but will show the context in which the NAPs are produced’ (Employment Committee meeting, 20 November 2001). The ‘context’ indicators push policy forward for the sake of policymaking since the indicators were seen as not robust enough, according to the definitions. It is a way to further develop the indicators. This continued to concern several of the member state delegates (UK, Ireland, Italy, Netherlands, Spain). A delegate from the Netherlands wanted a document where the ‘key’ and ‘context’ indicators were explicitly explained. He said: ‘We would like to produce a document where the “key” and “context” indicators are explicitly explained. We want to know how they are going to be presented in the NAPs [National Action Plans] and the JER [Joint Employment Report].10 We have to be clear’ (Employment Committee meeting, 20 November 2001). The Irish, British, Spanish, Finnish, German, Danish and Dutch delegates continued by arguing that the ‘key’ indicators were the only indicators to be discussed and decided on at the meeting. They believed that since the Employment Committee had to send their ‘opinion’ of the ‘quality in work’ indicators to advise the Council after the meeting, they should not include ‘context’ indicators if they were not sure of how they were to be used. Belgium, which had an interest in producing results since they held the Presidency, tried to save the situation. One of the Belgian delegates said: The Commission has tried to clarify the different states of ‘key’ and ‘context’. We think it is rather clear. We should not confine ourselves to ‘key’ indicators only. Our ministers would like as broad a view as possible. We have to show the progress that has been made with the clear distinction. (Employment Committee meeting, 20 November 2001)

The representatives for France and the Commission agreed that both ‘key’ and ‘context’ indicators had to be discussed and be part of the opinion. The representative of the Commission pointed out that if only the ‘key’ indicators were used then there had not been much progress. Spain suggested using some of the ‘context’ indicators, where the members had agreed on the source, to show progress. One of the Spanish delegates said: ‘Let’s take some “context” indicators, where we agree on the source, to show

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progress. But we have to be cautious’ (Employment Committee meeting, 20 November 2001). Finally, the President of the Employment Committee said that the Committee had to arrive at a clear standpoint, and that the ministers would not like to have the discussion on the difference between ‘key’ and ‘context’ indicators in the Council. He pointed out that ministers would have two questions: How bad is my country going to look? And how does this relate to the Luxembourg process? He said that so far, there was a majority for discussing only the ‘key’ indicators. One of the delegates for France immediately responded, upset by the President’s remark that ministers were only interested in how bad their country was going to look, and convincingly argued that it would be impossible to find ‘key’ indicators in all 10 areas defining ‘quality in work’.11 The French delegate said that the Ministers had asked them to find indicators, ‘key’ or ‘context’, in all ten areas. In order to show progress in all 10 areas they had to use ‘context’ indicators as well. He said: I totally disagree with the first part of the summary. The Ministers are only interested in how bad my country looks?! We can’t find all ten ‘key’ indicators today. That’s impossible. We don’t have a ‘key’ for all ten areas. All ten areas should be covered by the Ministers. In the compromise from the Indicators group the ‘context’ indicators were included, not only ‘key’ indicators, since we don’t have ‘key’ indicators for all ten areas. (Employment Committee meeting, 20 November 2001)

This was the end of the discussion. Both ‘key’ and ‘context’ indicators in the 10 areas of ‘quality in work’ were discussed. The member state representatives had to compromise on the definition of the ‘key’ and ‘context’ indicators in order to have an ‘opinion’ to be sent to the Council. The result was that the ‘key’ and ‘context’ indicators are instead used as two different toolkits for measuring progress in the member states. The ‘key’ indicators are the ideal. They are meant to be comparable across member states. At the same time they might hide conflicting ideas and perceptions. The ‘context’ indicators, on the other hand, make the conflict visible. In relation to transparency, the division into ‘key’ and ‘context’ indicators may on the surface make the indicators seem more transparent, since there are more variables measured and the numbers of tables and diagrams increase. Hence, when citizens or policy-makers want to monitor and assess policies in the member states they have a larger amount of numbers and data to examine. It gives the impression that the work is transparent and lucid. But what conflicts and compromises are hidden behind these numbers? In the next section we follow the process of developing ‘quality in work’ indicators in the one of the 10 areas, ‘social

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dialogue and workers’ involvement’, to see what will be visible and what will stay out of sight.

MAKING THE ‘QUALITY’ OF THE ‘SOCIAL DIALOGUE AND WORKERS’ INVOLVEMENT’ TRANSPARENT? One situation, where the conflict regarding what should be observable and what should be concealed was very intense was when the member states had to agree on how to measure the ‘quality’ of area number eight, ‘social dialogue and workers’ involvement’, through the ‘quality in work’ indicators. One of the explanations that was brought up by the members for the difficulties was that the political institutional settings in the member states are so different. While some member states’ labour markets are predominantly regulated by collective agreements, other member states’ labour markets are predominantly regulated by labour market laws. This has consequences for how member states want to measure successful social dialogue and workers’ involvement. Member states with a tradition of regulating via labour market laws have a stronger tradition of using strikes as a means of showing workers’ involvement, while for states with collective agreements and a tradition of involving social partners,12 membership in trade unions and the number of collective agreements in existence are a measure of ‘social dialogue and workers’ involvement’. Different voices were raised in the first Indicators group meeting (24 September 2001) to discuss the indicators on ‘social dialogue and workers involvement’. The Commission had suggested one ‘key’ indicator to measure the ‘quality’ of the ‘social dialogue and workers’ involvement’, which was the ‘number of days lost in strikes’. This indicator, however, was detrimental to member states with a social dialogue that often prevented negotiations from ending in strikes. If member states have a high number of days lost in strikes, it might imply that they have a high degree of workers’ involvement because the workers can show their support or their non-support by going on strike. But it could also be a sign of low involvement of workers, as ‘social dialogue’ proved insufficient to avoid strikes – instead workers’ involvement could be interpreted as high if the ‘social dialogue’ was particularly good and workers did not have to go on strike. It all depends on whether strikes are interpreted as a positive phenomenon in the sense that the workers are involved, or a negative phenomenon in the sense that there is a breakdown in communication between workers and employers.

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The members in the Committee were interpreting the indicator in different ways. One of the Commission’s representatives announced that it measured the ‘social dialogue’ in the negative, but it was the only indicator available that could be a ‘key’ indicator. What the Commission’s representative meant was that since the workers had to go on strike their ‘social dialogue’ had collapsed and that would measure the ‘social dialogue’ in the negative. Denmark’s delegate suggested that member states with collective agreements would have more ‘days lost in strikes’ than others. The members in the meeting room had to try to figure out what the Danish delegate meant. Could it be that member states with collective agreements had a high unionization and therefore would have more strikes? Or could it be that member states with a low number of collective agreements should be convinced by the argument that they would have less days on strike and therefore be against that indicator, which could have been the intent of the Danish delegate? While the members were thinking about what the delegate from Denmark had said, the delegate from France pointed out that he was not certain that ‘number of days lost in strikes’ was a measure of failure. It could also be good news in the sense that it showed workers’ involvement. A probable interpretation of the French delegate’s argument would be that France would score a high number in ‘number of days lost in strikes’. It would not be in their favour if that was interpreted as negative. In Greece, as well as in Portugal, they had another problem. The Greek delegate said: ‘There’s no distinction between public and private. In Greece people can lose their jobs if they strike. In the private sector most companies are small. People don’t strike because they’re afraid of losing their job. Not because of the success of the social partners’ (Employment Committee’s Indicators group meeting, 24 September 2001). The Spanish, Italian, Irish, Dutch and British delegates supported the indicator even though they thought it might have to take into account, for example, the difference between the private and the public sector. The Danish, Finnish, Swedish, German and Austrian delegates, on the other hand, were against it. They would be able to agree on the indicator if it was complemented by others, such as ‘number of workers covered by collective agreement’ but not as the single ‘key’ indicator on the ‘quality’ of the ‘social dialogue and workers’ involvement’. They thought that a good social dialogue between the social partners was a better measure. This came as no surprise, since these member states have a high degree of unionization and a tradition of collective agreements. The discussion showed that members did not only have different political institutions and traditions that would explain why they preferred one indicator to another. They also had different perceptions of what the indicators actually indicated.

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The President of the Indicators group reported what the group had discussed to the Employment Committee in the meeting on 4 October 2001. The Commission’s members and their co-workers had also tried to change the indicators in the document discussed according to the conclusion in the Indicators group. The indicator on ‘number of days lost in strikes’ was still proposed as a ‘key’ indicator. In addition, there were three context indicators suggested all related to collective agreements. One of the collective agreements indicators was ‘numbers of workers covered by collective agreements’. The Spanish delegate in the Indicators group had been positive to the ‘key’ indicator on ‘number of days lost in strikes’ but now one of the Spanish delegates in the Employment Committee was reluctant. She wondered if ‘number of days lost in strikes’ really was a good measure of ‘quality in work’. However, she was even more reluctant to measure collective agreements. She did not think that collective agreements were a measure of the ‘quality’ of the ‘social dialogue and workers’ involvement’. The Greek delegate agreed, pointing out that ‘number of workers covered by collective agreements’ was not a measure of ‘quality’. Member states in general had problems with finding indicators that measured the ‘quality’ of the ‘social dialogue and workers’ involvement’. Finally it was agreed that the Indicators group had to go back and work further on the indicators. That the Spanish delegates emphasized their unwillingness more strongly in this meeting than the earlier meeting was not unusual. Members might not always have a clear picture of what an indicator meant or indicated for their state, and they had to turn and twist the definitions and try to see the angles and try to understand what the indicators might indicate for other member states as well. Organizationally, there is also an important difference between the Indicators group and the Employment Committee – they have different roles in the organization of employment politics in the EU. The Indicators group is an expert group to the Employment Committee, and its job is to find the indicators, together with the Commission. The Employment Committee’s job is to think of the political consequences of a decision. Yet, the Indicators group also has to think of the political consequences. Nevertheless, it was in the Employment Committee that the final decision had to be made before the opinion or the report moved to the next level in the bureaucratic and political hierarchy: the Council. This meant that problems or conflicts in the Indicators group could be smoothed over since everyone knew that the final decision would be made in the Employment Committee. The next Indicators group meeting was scheduled for 8–9 November 2001. For this meeting ‘number of days lost in strikes’ were suggested as a ‘key’ indicator and ‘number of workers covered by collective agreements’

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was suggested as a ‘context’ indicator. While some members (for example the Italian, Danish, Belgian and Finnish delegates) were prepared to agree, others (the Irish and Greek delegates) wanted to keep ‘days lost in strike’ – but as a ‘context’ indicator’ – and reject ‘collective agreements’ as an indicator altogether. The French delegate suggested keeping them both as ‘context’ indicators. This was acceptable for all the member states, and that was also the conclusion of the Indicators group that was reported to the Employment Committee meeting at the end of November 2001. At the last Employment Committee meeting (20–21 November 2001) of the year, a ‘conclusion’ had to be decided on before the Committee’s opinion was remitted to the Council. One of the German delegates pointed out that to measure the ‘quality’ of the ‘social dialogue and workers’ involvement’ by measuring ‘number of days lost in strikes’ was extremely difficult. He also pointed out that ‘collective agreements’ were not any better. According to him ‘collective agreements’ would not be a good measure of the ‘quality’ of the ‘social dialogue and workers’ involvement’ since member states such as France would have a high score on ‘collective agreements’ because they are legally binding. However, according to the German delegate, this would not reflect the success of the ‘social dialogue’ since unionization is low. He said: On 28 [indicator number 28 on ‘percentage of employees covered by collective agreements’] we have very different traditions in different countries. Some collective agreements are legally binding in some countries and in France, for example, they have low unionisation but legally binding collective agreements, so they will have a high score. (Employment Committee meeting, 20 November 2001)

Most member states agreed that it was a difficult area, and it was finally decided that the Employment Committee should report to the Council that further work was needed. It was suggested that a menu of indicators in this area should to be developed since the indicators now being suggested did not reflect all the different institutional arrangements that were present in the member states. This was also concluded in the Council, and the work continued during 2002. The members had to reach a compromise. This had consequences for what the indicators would make visible and how transparent policies would be made. In order to be able to evaluate policies according to the logic of audit cultures they needed to be measurable. The idea was that the measurability would make policies visible and thereby transparent. Thus, it would be possible to measure whether a new political initiative made the ‘social dialogue and workers’ involvement’ more qualitative. However, the need to stabilize the process of making the indicators, resulted in the conflict behind each indicator remaining hidden.

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Seen from the outside, the indicators were judged as objective and politically neutral, while in fact the process of making them had been plagued with political considerations. During 2002 I was able to be part of the process that occurred before the meetings, and could observe how the Swedish delegates prepared their socalled ‘position’ (the work in the Employment Committee is based on the member states preparing ‘national’ positions) and how they discussed the different areas. In the preparatory meeting on 26 April 2002, one of the areas discussed was the indicators on the ‘quality’ of the ‘social dialogue and workers’ involvement’. There was a menu of indicators for member states to reflect on, including ‘trade union density’, ‘measuring employee representation and involvement’, ‘the coverage of works councils and other forms of representation and involvement’, and of course ‘number of days lost in strikes’ and ‘number of employees covered by collective agreements’. The member states had had the opportunity to communicate their ‘positions’ on the different possible indicators, and finally the Commission had proposed the same indicators as the year before: ‘number of days lost in strikes’ and ‘employees covered by collective agreement’. In the Swedish preparatory meeting for the Indicators group, Malin,13 a member of the Swedish delegation to the Employment Committee, pointed out that the year before, Sweden had said that we could agree on ‘number of days lost in strikes’ if we did have ‘collective agreements’ or ‘trade union density’ as well. She said that Sweden did not think that ‘number of days lost in strikes’ was a good measurement, but other members, such as Italy, did. She wondered if Sweden had statistics on the ‘number of members in trade unions’. In the same sentence she pointed out that the UK never would agree to use such an indicator. She informed us that they had given a long response to this question in the email correspondence between member states and the Commission. Karin, a member of the Swedish delegation to the Employment Committee, pointed out that this is a matter very close to their heart. She continued and said that Sweden should pressure the other member states on what ‘number of days lost in strikes’ indicates. It does not indicate how well the social dialogue works, she said. I said that in Italy they probably think that ‘number of days lost in strikes’ shows workers’ involvement. Anders, a member of the Swedish delegation to the Employment Committee, agreed, and said that Italy is like France, where only 10 per cent of the workers are members of a trade union, but 70 per cent can be mobilized in a strike. The Swedish members discussed how the other members would react to each proposal. This had to be taken into consideration when they stated their own position. One strategy was to let the member states who wanted the indicator ‘number of days lost in strikes’ explain what the indicator

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actually indicated for them, both in order to understand what they meant, and to make the member states in favour change their mind when they understood what, in Sweden’s perspective, was very evident: ‘number of days lost in strike’ was not a measure of a successful ‘social dialogue’. Malin brought us back to the issue by asking, if we have to agree on ‘number of days lost in strikes’, then what do we want to have as a complement: ‘collective agreements’ or ‘trade union density’? Do we have numbers on how many are covered by collective agreements, she wondered. Karin said: ‘Isn’t that a 100 per cent in Sweden?’ Anders responded that it is not completely true, and he turned to Malin and said: ‘take “trade union density” instead’. In the Indicators group meeting on 29 April 2002 the Italian and British delegates began the discussion and both stressed that ‘number of days lost in strikes’ was a good measure of ‘social dialogue and workers involvement’. They pointed out that it was the only unambiguous indicator. The Swedish delegate on the other hand emphasized that she would not accept ‘number of days lost in strikes’ if it was not complemented by ‘employees covered by collective agreements’ or ‘trade union density’, and that Sweden preferred ‘trade union density’. There was no agreement at the meeting. The members were stuck in the same ‘trench wars’ as the year before. They all knew that they had two more meetings before they had to conclude to report the Employment Committee, so they had time to negotiate. During the next two Indicators group meetings (4–5 July and 5–6 November 2002) discussions continued as above. The delegates from the UK, Spain and Italy were still antagonistic to the idea of using ‘collective agreements’ or ‘trade union density’ as a measure. The Swedish delegate continually stressed that ‘collective agreements’ was the better indicator, but they could agree to keep ‘days lost in strikes’ if it was complemented with ‘collective agreements’. The Swedish position had changed, as Spain’s had earlier. Sweden now preferred ‘collective agreements’ to ‘trade union density’, because they believed it would give Sweden a better score. In the last Indicators group meeting (5–6 November 2002) when the members had to agree on an opinion to be sent to the Employment Committee, the members agreed to a compromise. Both ‘number of days lost in strikes’ and ‘employees covered by collective agreements’ were reported as the best indicators available at the time. However, only as ‘context’ indicators. Even the British, along with Spanish and Italian delegates, had to bend to produce an agreement, even if they did not think, as they said, that the indicators reflected all national arrangements. The result of the chosen indicators affects what remains seen and what remains hidden. As some member states pointed out, it did not reflect all national arrangements. However, when the indicators would be available

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for the public in documents from the Commission and the member states, they might appear as politically neutral and context free. The result of the negotiations in the Committee was not the ‘objective’, ‘robust’ indicator that everyone was expecting, but it was a political compromise of a group of people in an EU committee.

CONCLUDING DISCUSSION: THE APPARENT NEUTRALITY OF INDICATORS In this chapter we have seen how the global discourse of ‘transparency’ is made operational through the development of indicators. This is a difficult undertaking, and the member states solve the problem by making a difference between ‘key’ and ‘context’ indicators. In the Employment Committee, where the national ‘positions’ are defended until the end, the possibility of compromise is made more likely by means of these bureaucratic tools. This means that on the surface there are many different indicators that measure member states’ progress or retreat in different policy areas, which might give the impression that the policy process is transparent and lucid. However, the political process of defining and developing transparent indicators does not shine through in the finished results. The conflicts, negotiations and compromises that made the indicators possible in the first place are instead obscured from view. Regardless, the indicators are treated as objective and politically neutral, and political decisions are based on the results of the statistics produced. When a decision is made, the members in the Committee abide by that decision. The indicators are used in the Commission’s and the member states’ documents, and the results are used as a basis on which to formulate new policies in the EU. Thus, while it may seem that policy-making in the case of European labour markets is a process based on visible, clearly defined and solid indicators, these indicators are themselves a result of a process of negotiation and compromise. They appear as proxies to the ideal, and as compromises between representatives of nation states, political interests and situational judgements. And while they may reveal a number of relevant aspects of the targeted phenomena, they also hide a number of significant aspects.

ACKNOWLEDGEMENTS The research for this chapter was funded by the Swedish Research Council through the ‘Transnational regulation and the transformation of states’

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(TREO) project, the Bank of Sweden Tercentenary Fund through ‘The new regulation’ project, and through the European Union via the EUROCAP project – ‘Social dialogue, employment and territories. Towards a European politics of capabilities’.

NOTES 1.

The European Employment Strategy included the EU employment guidelines, the National Action Plans, now called National Reform Programmes, that explain how the guidelines are implemented in the member states, the Joint Employment Report that analyses the National Action Plans and the Recommendations on what member states can do better based on the analysis of the Joint Employment Report. For more information on the European Employment Strategy see, for example, Jacobsson (1999), Jacobsson et al. (2001), Jacobsson and Vifell (2004) and Thedvall (1998; 2006). 2. The European Commission, from now on called the Commission, is the initiating and implementing body of the EU. The name ‘Commission’ refers both to the College of Commissioners as well as the bureaucracy of General Directorates assisting the Commissioners. It is in the General Directorates that the EU bureaucrats work. 3. The Employment Committee is an advisory decision-making committee in the service of the Council of the European Union. The members prepare decisions on the EU employment policy for the Council of the European Union. The Employment Committee members are senior civil servants; two from every member state, as well as from the Commission. The Employment Committee is assisted by two working groups: the Indicators group and the Ad hoc group. For more information on the Employment Committee see Jacobsson and Vifell (2003), Larsson (2003) and Thedvall (1998; 2006). 4. The Indicators group is a working group that assists the Employment Committee on developing indicators. The group has one member from every member state and from the Commission, and they are usually experts on statistics. The Ad hoc group prepares decisions for the Employment Committee on other issues than indicators. 5. The Council of the European Union, from now on named the Council, is the decisionmaking body in the EU. It consists of the responsible ministers of the member states, depending on the question discussed. If, for example, employment issues are discussed, the minister responsible for employment issues in each member country will attend. 6. The working groups of the Council are, as regards employment issues, the Social Questions Working group, that prepares for the Permanent Representatives Committee (Coreper), that prepares for the Council, that in turn makes the formal decision. 7. Transparency International was established in 1993. For more information see Florini (2003, p. 62) and Sanders and West (2003, p. 1). 8. The ‘quotations’ in the text are not exact quotations but taken from my notes from the meetings. However, I have chosen to write the ‘Belgian delegate said’ even if I do not have the exact quotation since I believe I have captured a way of speaking in the Committee, which is not my own. 9. As mentioned in footnote 1 above, the National Action Plans, commonly referred to as the NAPs, are written by the member states. In the NAPs the member states relate their labour market politics to the EU guidelines and show how they have followed the guidelines and the results achieved. One part of the NAPs is the Annex with the indicators that the Commission has asked the member states to report. 10. As mentioned in note 1 above, all the member states’ NAPs are then compared and evaluated in a Commission document called the Joint Employment Report, commonly referred to as the JER. The JER is also supported by an annex with indicators comparing the member states.

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11.

The 10 areas defining ‘quality in work’ were: ‘1. Intrinsic job quality’, ‘2. Skills, life-long learning and career development’, ‘3. Gender equality’, ‘4. Health and safety at work’, ‘5. Flexibility and security’, ‘6. Inclusion and access to the labour market’, ‘7. Work organization and work–life balance’, ‘8. Social dialogue and worker involvement’, ‘9. Diversity and non-discrimination’, and ‘10. Overall economic performance and productivity’ (CEC, 2001). The member states had to agree on indicators to measure these 10 areas. 12. The Social partners are the unions, the employers’ federations and other nongovernmental organizations that may have interests in the labour market. In this context it mainly refers to the unions and the employers’ federations. 13. The people in the text appear under pseudonyms.

REFERENCES Commision of the European Communities (CEC) (2001), Employment and Social Policies: A Framework for Investing in Quality, COM(2001) 313 final. Florini, Ann (2003), The Coming Democracy. New Rules for Running a New World, Washington, DC, Covelo and London: Island Press. Garsten, Christina and Monica Lindh de Montoya (2004), ‘The politics of transparency: accountability through visibility’, paper presented at the 20th EGOS Colloquium, Ljubljana, Slovenia, 1–3 July. Jacobsson, Kerstin (1999), Employment Policy in Europe: A New System of European Governance?, Score Research Report 1999:11. Jacobsson, Kerstin and Åsa Vifell (2003), ‘Integration by deliberation? On the role of committees in the open method of coordination’, paper for workshop on ‘The Forging of Deliberative Supranationalism in the EU’, Florence, 7–8 February. Jacobsson, Kerstin and Åsa Vifell (2004), ‘New governance structures in employment policy making: taking stock of the European Employment Strategy’, in Ingo Linsenmann, Christoph O. Meyer and Wolfgang Wessels (eds), Economic Governance in the EU, Basingstoke: Palgrave. Jacobsson, Kerstin, Karl-Magnus Johansson and Magnus Ekengren (2001), Mot en europeisk välfärdspolitik? Ny politik och nya samarbetsformer i EU, Stockholm: SNS Förlag. Larsson, Torbjörn (2003), Precooking in the European Union. The World of Expert Groups, Regeringskansliet, Ds 2003:16. Miller, Peter (2001), ‘Governing by numbers: why calculative practices matter’, Social Research, 68 (2), 379–95. Porter, Theodore M. (1995), Trust in Numbers. The Pursuit of Objectivity in Science and Public Life, Princeton, NJ and Chichester: Princeton University Press. Power, Michael (1997), The Audit Society. Rituals of Verification, Oxford: Oxford University Press. Power, Michael (2003), ‘Auditing and the production of legitimacy’, Accounting, Organizations and Society, 28 (4), 379–94. Sanders, Todd and Harry G. West (2003), ‘Power revealed and concealed in the new world order’, in Harry G. West and Todd Sanders (eds), Transparency and Conspiracy. Ethnographies of Suspicion in the New World Order, Durham, CT and London: Duke University Press, pp. 1–37. Strathern, Marilyn (ed.) (2000a), Audit Culture. Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge.

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Strathern, Marilyn (2000b), ‘The tyranny of transparency’, British Educational Research Journal, 26 (3), 309–21. Thedvall, Renita (1998), Flexibel Arbetskraft som EU fråga – aktörer, arenor och perspektiv, unpublished report. Thedvall, Renita (2006), Eurocrats at Work. Negotiating Transparency in Postnational Employment Policy, Stockholm Studies in Social Anthropology, 58, Stockholm: Almqvist & Wiksell International.

8.

‘. . . What gets measured gets managed!’1 Sorting out ‘the social’ in socially responsible investing (SRI) Anna Hasselström

INTRODUCTION: WORKING FOR A GOOD CAUSE IN THE NAME OF TRANSPARENCY ‘Ethical funds that invest in socially responsible corporations are a good way to make your savings grow – at the same time as they are doing as much good as they can.’ The quote comes from the web page of Banco Fonder (my translation, www.banco.se, accessed 29 April 2005), a leading retailer of ethical investments in Sweden. Ideas and practices relating to ethical investing would not exist unless there were un-ethical funds for sale as well. That is, unless the companies that sell financial investments also sold investments not specifically defined and constructed as ‘ethical’. ‘Morally bad’ investments are a prerequisite for ‘morally good’ investments. What is an ‘ethical’ investment and what is ‘the socially responsible’ way to act for individual savers as well as for corporations? This chapter investigates how different organizational and individual actors work towards defining and developing answers to these questions. It investigates connections between socially responsible investing (SRI) and ideas and practices of transparency in relation to rating and ranking technologies. More specifically the chapter looks at the following areas, all involved in SRI: (1) Banco Fonder – a Swedish corporation that monitors the social responsibility (SR) of other corporations, whose shares they then put together in investment portfolios and sell as ‘ethical funds’ to the general public, (2) academic articles from the Journal of Business Ethics written by researchers and academic business ethicists working on SR and SRI, and sometimes also offering their services as ethics consultants or experts, and (3) CoreRatings – a rating agency specialized in measuring corporate social responsibility (CSR). Banco uses the ratings of CoreRatings when deciding whether or not a share is to be defined as ethical.2 160

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In the SRI arena, ‘lack of transparency’ is constructed as a key problem needing to be solved. Being ‘transparent’ is closely associated with being socially responsible, and in order to evaluate whether a corporation is transparent or not, is taking its social responsibility seriously or not, various kinds of ratings and rankings are produced and applied. I argue that ratings and rankings are central technologies of governance and as such they are used to produce transparency, albeit of a selective kind. That is, transparency is produced in certain areas but at a cost of losing detail, nuances and complexity in other areas. In order to appear transparent ‘the social’ has to be defined, standardized and made into something that can be measured, rated and ranked.

SOCIALLY RESPONSIBLE INVESTING AND CORPORATE SOCIAL RESPONSIBILITY Socially responsible investing, also known as social investing, ethical investing, socially aware investing, socially conscious investing, green investing, value-based investing, mission based, mission related (Scheuth, 2003, pp. 189–9) is not a novel thing. The idea of doing good while investing goes far back in time. For instance, more than 200 years ago this kind of investing was associated with various religious groups that did not want to invest money in ‘sinful’ activities involving tobacco and alcohol. The more recent development of SRI is often dated back to the Vietnam War during the 1960s when investors tried to avoid supporting companies involved in the war industry. Other events often linked to the growth of SRI are apartheid in South Africa and various environmental issues such as the involvement in nuclear power. In the 1990s tobacco and sweatshop labour became another issue for SRI (see Dillenburg et al., 2003; Guay et al., 2004). Today’s SRI buzzword is ‘sustainability’, and it refers to a corporate kind of sustainability as well as to a social kind. This in turn is related to the many corporate scandals of the late 1990s and early 2000s, which has resulted in increased calls for greater transparency regarding corporate governance and business ethics (connections between transparency and corporate governance is further addressed by Garsten and Lindh de Montoya in Chapter 4 of this volume). So there is nothing new about trying to do good while making money. What has changed is the scope of the phenomenon (Guay et al., 2004). In a report from 2003 the Social Investment Forum states that assets in SRI during 2001 and 2002 ‘have grown 40 per cent faster than all professionally managed investment assets in the US’ (2003, p. i), and that socially screened portfolios increased from $2.01 trillion in 2001 to $2.14 trillion in 2003.

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How is this increase in SRI explained? One commentator, Mark S. Schwartz (2003), puts this development down to a number of different factors coming together, such as growth in investor concern, the corporate social responsibility movement, the possibility of attractive returns, the work of advertising, media exposure of issues relating to SRI, the development of sustainability indices, and the founding of various national social investment organizations. Schwartz is a lecturer on business ethics at one of the world leaders in business education: the Wharton School, University of Pennsylvania. The biographical note accompanying his article ‘The “ethics” of ethical investing’ in the Journal of Business Ethics lets us know that besides lecturing he has also ‘consulted for a number of companies on business ethics-related matters’ (2003, p. 195). Another commentator, Steve Schueth, argues that today’s US investors are better educated and informed, which would explain an increase in SRI (Scheuth, 2003). He also puts forward the idea that the increase of women in the workforce has resulted in a greater concern for SR issues since women have a ‘natural affinity to the concept of socially responsible investing’ (2003, p. 192). In his biographical note in the Journal of Business Ethics we learn that Schueth is the President of First Affirmative Financial Network which is an investment advisory firm. He has also been the Director of the non-profit Social Investment Forum since 1992. In order for an individual to be a socially responsible investor, the companies in which one invests need to take corporate social responsibility. Corporate social responsibility can be seen as an arena where state and corporate representatives interact in particular and, to certain degrees, novel ways. It is an arena that links and entangles ideas on morality, responsibility, human social development and monetary gains. Since the 1990s CSR has ‘emerged as one of the priorities in the policy documents and yearly reports of corporations’ (Garsten, 2004, p. 70). Ideas concerning CSR are often expressed in soft law such as standards, codes of conduct, indicators, recommendations and guidelines. As opposed to ‘hard’ law, soft laws are not legally binding, and as such they convey a picture of the new responsible corporation that is moral, ethical, social and sustainable (Garsten, 2004, p. 70). Other ways to display CSR can be through ethical certifications and partnerships with other accountable organizations, as when Banco Fonder displays the logotypes of Amnesty, the Red Cross and the Save the Children Fund on their web page. The past decade has seen a greater demand for responsibility, accountability and transparency in activities and relations referred to as economic or as belonging to the market (cf. Garsten and Lindh de Montoya, 2004, p. 5). This increasing demand for accountability is usually explained with reference to global processes, market forces and deregulation. States are

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seen as losing control: transnational flows of money, labour, goods and services can no longer be controlled by nation states. Corporations stretch across state borders with their subcontractors, factories and call centres. Geographically dispersed people and places are linked in various supply and demand chains. This representation of the contemporary world, sometimes also referred to as one of fragmented political authority, enables new forms of organization, competition, collaboration and contestation between state representatives, grass-root and non-governmental organization (NGO) representatives and corporate representatives (see Dunn, 2005). Political subjects and political action is changing with more actors wanting a say in matters previously handled by state or market representatives. The allocation of social responsibility has been made into an issue, a problem, and various interests and political agendas meet in the corporate social responsibility arena. What is corporate social responsibility? There are no simple answers to that question and much time and money is spent trying to define what it is, and how it can be measured. Examples of organizational actors wanting a say in the matter are the OECD (the Organisation for Economic Co-operation and Development) (Multinational Enterprises Guidelines), the European Union (EU) (Green Paper on CSR), Social Accountability 8000, Global Report Initiative, Business for Social Responsibility, International Standards Organization (ISO 26000), Investor Responsibility Research Center (IRRC) and the Interfaith Center on Corporate Responsibility (ICCR).3 On a very general level ‘socially responsible investing’ refers to taking into account ‘non-financial criteria’, as well as ‘financial criteria’, in relation to particular investments. ‘Non-financial’ in this context usually refers to the internal workings of a company such as employment policies and benefits, external practices and policies such as effects on the environment and indigenous people, and ranges of products such as, for example, tobacco, military equipment and alcohol (Guay et al., 2004, p. 2). From an SRI perspective ‘ethical investing’ is a way to make moral money or money moral. ‘Ethics’ also creates a kind of subject or citizen that takes responsibility for his or her own savings. As can be imagined, there are several obstacles that have to be overcome in order to make a distinction between an investment that is socially responsible and one that is not. For instance, where does a company end?4 How should subsidiary companies be regarded? Partownership? Subcontractors? Outsourcing? And how should one deal with the fact that different people have different ideas on what ‘ethical’ means? There is no single agreed-upon standard as to the definition of what an ethical investment is or what being socially responsible should entail, and organizational actors arguing for the standardization of the SRI industry often refer to this as a problem; a problem standardization would solve.

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The matter of problematizing the definition and measurement of SR is a shared interest among various organizational actors involved in SRI as well as among individual researchers. There is a common call for morality in investing, but it is not clear whose morality should be considered superior. For instance, Schwartz wishes to construct a code of ethics for ethical investment which would contain standards for disclosure, ethical audit and explicit criteria for screening, together with real-time information on what companies the funds have invested in. Schwartz is vague, however, when it comes to the actual definition of ‘ethical’. He refers to some kind of universal morality as the basis for these standards: ‘To be considered ethical screens, the behaviour in question must derive support beyond the moral standard of cultural relativism’ (Schwartz, 2003, p. 212). Another commentator argues that the ‘ultimate challenge in relation to social investing’ has to do with ‘enhancing the function of conscience in the modern global business corporation’ (Goodpaster, 2003, p. 239, italics in original). Kenneth E. Goodpaster has the David and Barbara Koch Endowed Chair in Business Ethics at the University of St Thomas, St Paul, Minnesota. Goodpaster, as opposed to Schwartz, is more explicit when it comes to deciding on the morality of choice appropriate to achieve this. He, and others with him (see Dillenburg et al., 2003) rely heavily on ‘a vision of conscience’ (Goodpaster, 2003, p. 240) based on the so-called Caux Round Table Principles (CRT). The Caux Round Table is an international network of business leaders ‘working to promote a moral capitalism’ (www.cauxroundtable.org/about. html, accessed 20 May 2005). The network was founded in 1986 by Frederick Phillips, former President of Philips Electronics and Olivier Giscard d’Estaing, former Vice-Chairman of INSEAD (the business school regarded as one of the best in the world, based in Fontainebleau in France and in Singapore). Together with Ryazaburo Kaku, former Chairman of Canon, Inc., the network’s attention was directed at global corporate responsibility. In 1994 the CRT Principles for Business were introduced, and the following year presented at the United Nations World Summit on Social Development (www.cauxroundtable.org/about.html, accessed 20 May 2005). These principles consist of a ‘set of ethical norms for businesses operating internationally or across multiple cultures’ (www.cauxroundtable.org/about. html, accessed 20 May 2005), and they are based on two so-called ethical ideals: kyosei and human dignity: The Japanese concept of kyosei means living and working together for the common good enabling cooperation and mutual prosperity to coexist with healthy and fair competition. ‘Human dignity’ refers to the sacredness or value of each person as an end, not simply as a mean to the fulfilment of others’ purposes or

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even majority prescription. (www.cauxroundtable.org/principles.html, accessed 20 May 2005)

However. as Goodpaster points out, it is not easy to go from vision to principles – principles that can be measured and evaluated. What is needed, according to him, is ‘objective criteria beyond articulation’ (Goodpaster, 2003, p. 240). That is, some kind of benchmark that goes beyond the statement ‘that corporations have responsibility beyond shareholders to stakeholders’ (Goodpaster, 2003, p. 240, his italics). These benchmarks have to be ‘credible’, ‘fair’ and ‘objective’. Another argument for ‘improving’ the technologies for measuring ‘the social’, put forward by William S. Laufer, is that this would make it possible to move ‘from simple screening methods to social and environmental metrics that hold the distinctive promise of affecting corporate behaviour’ (Laufer, 2003, p. 163). Laufer is Associate Professor of Legal Studies and Sociology at the Carol and Lawrence Zicklin Center for Business Ethics at the Wharton School. The idea behind this argument is that once made measurable, the social responsibility dimension can be screened by active shareholders that can then engage in dialogue with companies. This assumption is explicitly expressed on the web pages of Banco Fonder. Working ‘pro-actively’ with so-called ‘active shareholder engagement’ is a recurring way for Banco to describe what they do: ‘Through our methods of analysis and our pro-active way of working, we actively affect corporations when taking greater responsibility for people and the environment at the same time as we are working to make your money grow’ (www.banco.se, accessed 29 April 2005, my translation). But as pointed out by Laufer, there is no consensus as to appropriate SR standards (see also Grossman et al., in this volume, for a related discussion on the many meanings and applications of ‘transparency’). Investors do not agree, business leaders do not agree and business ethicists do not agree. This diversity in value and moral preferences is something fund developers and fund managers have to deal with. For them it is however not necessarily an impediment since a too strict SR standard closes off many competitive opportunities for selling ethical funds to investors with different ideas on what being ethical might entail. Laufer comes to the conclusion that there are many ‘valid’ approaches to social screening. Despite the fact that there are, according to him, many valid approaches, he still believes it possible, even desirable, to develop a set of Generally Accepted Accounting Principles for social reporting – based on the same idea on measurability as Generally Accepted Accounting Principles for financial reporting. He suggests the establishment of an independent body with generally accepted accounting principles for social reports, and alongside this he also sees the need for a new ‘respected profession’: the social auditor. As long as these

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professionals do not exist, Laufer argues, social screeners will continue to develop their own disparate ways of measuring which will hinder efficient comparisons (Laufer, 2003, p. 250). Battles over how to measure SR involve NGOs, supranational organizations, business representatives, as well as academic researchers. Many of the voices in this debate seem to agree that ‘valid measuring’ depends on ‘transparency’. Transparency is here understood mainly as corporations’ disclosure of certain dimensions of their activities. At the same time, however, the actual act of measurement is viewed as a means to achieve that same transparency. Thus many actors involved in the SRI industry agree that the business world needs reliable and valid measuring tools – measuring tools that make comparisons possible. The disagreements concern what these should look like and what they ought to measure. One attempt at constructing such a ‘valid’ measuring tool has been designed by Stephen Dillenburg, Timothy Green and Homer Erekson, and is discussed in their article ‘Approaching socially responsible investment with a comprehensive ratings scheme: total social impact’ published in the Journal of Business Ethics (Dillenburg et al., 2003). Dillenburg, a chartered financial analyst, is the Managing Partner of Summit Investment Partners. He is responsible for product development, marketing and management of the Summit Total Social Impact Fund. Timothy Green is President of the Total Social Impact Foundation, a non-profit research and educational organization focused on measuring principled business leadership. Homer Erekson is Dean and Harzfeld Professor of Economics and Business Policy at the University of Missouri, Kansas City. The authors describe what they see as ‘dramatic changes’ in the SRI industry (Dillenburg et al., 2003, p. 169), that is, a change from so-called avoidance screening to attempts at actually affecting corporate behaviour. They further argue that credible rating systems based on reliable, recognizable social and environmental metrics are critical to this process. Their invention, the total social impact (TSI) rating approach, is, they argue, such a new social metric scheme based on ratings of stakeholder issues. The authors argue that the ‘duty of transparency’ is an important factor with regards to the development of SRI (Dillenburg et al., 2003, p. 169). According to their text, the problem within SRI today is a ‘lack of consistency and transparency’. In other words, ‘[c]orporations are given mixed messages about what is being measured (Dillenburg et al., 2003, p. 169). In order to manage, corporations need to measure (Dillenburg et al., 2003, p. 170). Total social impact is a ‘mission to promote appropriate standards of corporate/business responsibility, behaviour and citizenship in a global society’ (Dillenburg et al., 2003, p. 170). These standards are based on the Caux Round Table Principles business leadership in order ‘to create

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a global society that is more prosperous, sustainable and equitable’ (Dillenburg et al., 2003, p. 170). Total social impact ratings produce results based on a ‘benchmarking process measuring externally available information about companies’ (Dillenburg et al., 2003, p. 170). Total social impact converts CRT’s seven principles into categories designed for ratings. The focus is on stakeholder effects and corporate performance. There are altogether eight categories. The first seven address ‘specific, identifiable impacts on specific stakeholders’ (Dillenburg et al., 2003, p. 172). The eighth addresses ‘fundamental responsibilities of business, labelled trust and transparency’ (Dillenburg et al., 2003, p. 172). The eight categories are: ● ● ● ● ● ● ● ●

Customers Employees Owners/investors Suppliers Competitors Communities The environment Fundamental duties: trust and transparency.

After this act of categorization follows the transformation from quality to quantity: The actual scoring is made up by 80 benchmarks, ten for each of the categories above. Corporate activity is scored under each benchmark in each category based on information gathered from a wide range of data sources . . . such as company documents, filings, and websites; analysis by third parties including NGOs and academics, and original research databases created by TSI. Nonpublic sources are used only in the absence of primary source data. The seven stakeholder categories are each worth 10%, accounting for 70% of the final score. The eighth category: Trust and Transparency: is triple weighted to reflect the significance of fundamental duties. Trust and transparency thus accounts for 30% of the final score. Scores are summed across the eight categories. This raw score is then indexed back to a 20 point scale to produce the TSI Rating. (Dillenburg et al., 2003, p. 174)

The higher the score, the better practices in principled business leadership. This and other attempts to make ‘the social’ into something that can be measured is a reducing process which results in a product, an artefact. This ‘thing’ usually takes the shape of a combination of numbers or a letters, that then become the foundation upon which other actors make comparisons and evaluations. Consequently, ‘the social’ is hereby possible to rate and rank – ‘the artefact’ takes on a life of its own. Lists, numbers,

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percentage points, letter combinations and mathematical calculations are produced and used to transform whatever complex relations the concept of ‘the social’ might entail in order to reach transparency. At the same time, however, ‘transparency’ within the corporation is itself a category to be evaluated.

RATING AND RANKING: TECHNOLOGIES OF GOVERNANCE Ratings and rankings can be of various kinds, such as, for example, when the Financial Times ranks the best financial analysts, or when the OECD rates various aspects of nation states. Rating and ranking are often used synonymously but are from a methodological perspective two separate ways of measuring value. Ranking means organizing a number of units in relation to each other, that is, creating a list of the best horror movies ever made. Rating is about grading units on the same scale, for example when Sweden’s ability to pay back credits given is awarded an Aaa rating by the credit rating agency Moodys (cf. Krosnick and Alwin, 1988). These two formalized methods to compare and evaluate, are ways to spread information. To rate or rank something is, however, far from a neutral and unproblematic procedure. Rather, these measuring manners are forms of ‘organized governance’ (Brunsson and Jacobsson, 2000, p. 10) that can both motivate and direct actors to act in certain ways. So whereas rating and ranking often are used as instruments to show the transparency and accountability of other phenomena, the technologies themselves are usually far from transparent (see the example from CoreRatings below). Rating and ranking do not only distribute information and knowledge, they also produce information and knowledge (cf. Callon, 1998; Foucault, 1994). We can understand these technologies or instruments for comparison and evaluation from various perspectives, that is, as a way to get a competitive advantage, as a way to stimulate change without formal regulation, as a consumers’ guide, and as an instrument for circulating information and knowledge (cf. Hayward and Boeker, 1998). They can also be understood as a ‘tool for communicating a company’s performance to regulators, investors, and other financial and non-financial stakeholders’ and as a ‘market tool’ (www.coreratings.com, accessed 23 May 2005). Let us return to Banco Fonder to see how they present themselves and their ethical investments. As already mentioned, Banco is one of Sweden’s leading companies selling ethical investments to the general public. It is

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part of Alfred Berg Asset Management, which in turn is owned by ABN AMRO Bank.

BANCO AND SRI ‘The more your savings grow, the more help ends up in the pockets of others’ (www.banco.se, accessed 29 April 2005, my translation). This is another quote from the opening web page of Banco Fonder. It is illustrated by a close up drawing of a back pocket of a pair of jeans. The word ‘help’ is highlighted in red. The text on the small label attached to the pocket reads: ‘non-profit organisation’ and the stitches on the pocket are shaped into a heart. A Swedish crown is on its way into the pocket. The logotypes of Amnesty, the Red Cross and the Save the Children Fund flash by on the same page, and next to this the introductory text reads: Welcome to Banco Fonder. Banco is one of the leading fund managers of ethical and non-profit5 funds in Sweden. Ethical funds that invest in socially responsible corporations are a good way to make your savings grow – at the same time as they are doing as much good as they can. (www.banco.se, accessed 29 April 2005, my translation)

How do Banco Fonder define ‘ethical savings’ and how do they decide what shares are to go into the ethical portfolios as opposed to other, supposedly unethical portfolios? According to the web page: The ethical fund management invests your money in companies that take responsibility seriously. Responsibility for the environment, for human rights and for our common future. We start from an overarching comprehensive view in which we weigh together economic, environmental and social factors. With these as points of departures we undertake profound analyses, so called screenings, in order to decide in which companies Banco should invest the savers’ money. The analytical work is based on our own criteria and demands but we also cooperate with CoreRatings, Europe’s leading screening company that assists us in deep examinations of companies. (www.banco.se/etisktfondsparande/etiskainvesteringar. asp, accessed 29 April 2005, my translation)

Banco’s social responsibility investment criteria focus mainly on: ● ● ●

human rights, labour conditions and corruption environment company routines and policies: the conformity to UN conventions regarding social and environmental auditing, openness and transparency.

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Banco Fonder makes use of so-called positive screening. Corporations are qualified into the ethical portfolios if they adhere to ethical considerations, that is if corporations live up to the ethical investment rules of Banco (Bancos Etiska placeringsregler, n.d.) which on a general level mainly relate to, as already mentioned, corporate social responsibility in relation to human rights, labour conditions and environmental issues, and are based on international agreements made by the United Nations (UN) and the International Labour Organization (ILO) (www.banco.se/ombanco/ agarpolicy.asp, accessed 29 April 2005). According to their web page Banco further conducts ‘profound ethical examinations of the corporations in question’. They engage in what they call ‘active dialogue’ in order to increase the social and environmental responsibility taken by companies. ‘Active dialogue’ as understood by Banco refers to communication with corporate managements using letters or email with the aim of making companies aware of the various problems in their enterprises, and then pressuring them for change. When necessary, Banco meets with the management of corporations for more ‘profound discussion’ on various ethical aspects concerning the activities of a corporation. Banco can also ally itself with other investors to pressure for change. Other possible strategies can be to partake in voting procedures concerning ethical issues that take place at shareholders’ meetings (www.banco.se/ombanco/agarpolicy.asp, accessed 29 April 2005). If a company does not meet the ethical requirements of Banco Fonder, Banco will first of all work for change, and if that does not make a difference, the last option is to sell the shares. This happens after ‘a given period of time’ (www.banco.se/etisktfondsparande/aktivpaverkan.asp, accessed 29 April 2005). Banco describes its ethical evaluation process as a nine-step method. Whether the text version coincides with what they actually do, I do not know. Step 1: the starting point: an initial financial analysis is conducted by Alfred Berg fund manager team for Swedish shares. Step 2: the team then puts together a model portfolio. Step 3: CoreRatings conducts ‘thorough SRI-screening’ of all companies in the model portfolio. The screening results in ‘profound reports’ on each company. Step 4: based on these reports, Banco evaluates each company from a SRI perspective. This refers to placing a company’s social and environmental risk in relation to how they work internally with these issues. Step 5: Banco’s evaluation is compiled in their internal SRI database, and each company is classified according to a four-grade scale:

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Easy in: investment allowed. Difficult in: investment allowed for now, the company is under observation. Easy out: not allowed to invest. Difficult out: not allowed to invest; the company only indirectly violates client’s ethical investment criteria and the share is under special observation.

Step 6: Swedish fund management for shares decides on replacement shares for those not considered ethical. Step 7: companies with ‘identifiable deficiencies’ are contacted by Banco by mail. This is followed up through ‘active dialogue’ with company management. Step 8: Banco’s SRI model is followed up and controlled currently by an independent unit within Alfred Berg Asset Management. Step 9: each fund manager checks every new investment against two screening lists – Nordic or Global – to whether they are classified as ‘Difficult out’ or ‘Easy out’. If these lists have no record of a specific company, the fund manager should ‘communicate’ with Banco’s ethical analyst who will make an evaluation of the company if requested by the fund manager. If a report is ordered it should arrive from CoreRatings within 12 hours (Bancos etiska placeringsregler, n.d., pp. 7–10).

THE RATINGS OF CORERATINGS: TRANSPARENCY AT A COST Banco Fonder uses the ratings of CoreRatings6 when deciding whether a share is ethical or not. On CoreRatings’ web page we learn that it ‘is the leading European rating agency providing independent investment analysis of corporate responsibility risks’ (www.coreratings.com/site/frames/ core_splash.jsp, accessed 23 May 2005). CoreRatings sells ‘Research’, ‘Ratings’ and an ‘Engagement product’. ‘Research’ refers to ratings reports on the investment risks associated with the activities of different companies. ‘Ratings’ refer to solicited corporate responsibility ratings that are either used internally by the rated company or, if made public, used by possible investors. The ‘engagement product’ refers to a service described as a ‘structured dialogue with the management of companies to exert investor pressure and express concern regarding corporate responsibility performance’ (www.coreratings.com/site/frames/ core_splash.jsp, accessed 23 May 2005). As for the actual ratings they are of two different kinds: responsibility risk rating and governance rating. The first rates ‘the management of

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environmental, social, employment, governance and ethical risks’. This is described as a three-step process: ● ● ●

identification of sector specific risks analysis of the investment effects of different risks investigation of the company’s management of the risks.

Step one has to do with, for example, risks arising from the company’s products, the effects on society in which the company operates, labour relations, and ethical issues of various kinds relating to the company’s products. Step two can, for instance, involve an estimate of ‘the decline in value of individual product brands resulting from changes in market/consumer perceptions’ or liability to legal actions, for example the risk of ‘exposure of companies to individual or class actions as a result of their specific activities’. Finally, step three is carried out by answering and scoring a standard set of 13 questions grouped in five company response areas for every risk in the sector risk analysis (SRA). The company response areas are policy development, policy implementation, validation, performance, transparency and disclosure. Once this three-step analysis is completed, that is, once all these very complex matters are reduced to sets of ‘estimates’ and ‘company response’, they are then scored against each and every risk in the SRA. The scores are then adjusted depending on the outcome of the critical issue analysis. Based on that analysis the score for a particular risk area is multiplied by a factor. The adjusted scores are totalled, converted to a percentage, and then expressed as a rating according to a 7 point scale, A+ to D. (www.coreratings.com/site/products/cr_methodology. html, accessed 23 May 2005)

The second kind of rating for sale is the governance rating, and is ordered by the company itself from CoreRatings. The rating is based on questions ‘derived from an extensive review of international corporate governance guidelines, company best practice, the writings of governance experts and national corporate governance codes’. The answers to this list of questions are then scored and assessed ‘according to a pre-determined scoring system’ based on ‘the company’s management of critical issues’, and the score for each area ‘is multiplied by a factor. The adjusted scores are totalled, converted to a %, and then expressed as a rating’ (www.coreratings. com/site/products/corp_gov_methodology.html, accessed 23 May 2005). ‘The social’ is now possible to measure, compare and evaluate. As described here, deciding what is ethical or not seems a fairly straightforward business. A closer look at other actors in the SRI industry quickly reveals that there are almost as many definitions of ‘ethical’ as there are interested actors wanting a say in the matter.

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CONCLUSION: MAKING ALIKE AND SORTING THINGS OUT The SRI industry depends on a particular kind of ‘responsibility-moral’ whereby the marketing of these funds is often directed towards making the investors/savers regard it as their responsibility as investors to act responsibly – in this case to ‘do good’ while making money. Other important conditions for the development and existence of SRI are certain ideas on causality and globalization, that is, ideas on the causal links between individual savings and the production line of a certain good by a certain company in a context savers themselves cannot monitor. There is, of course, no one simple understanding of what ‘making good’ actually means for different actors involved, but whatever meaning this somewhat empty concept is filled with, the market for SRI relies on specific underlying assumptions on causality, control and predictability. The SRI industry also involves trust: trust in a system that investors cannot themselves control, trust in the organizational trademark of the company selling ethical funds, that is, believing that the ethical fund really is ethical and that the company in question acts in a socially responsible way. One way of expressing corporate social responsibility is for corporations to develop and use different kinds of standards, codes of conduct, certifications, indices, recommendations and so on. Important tools used in creating trust are the technologies of rating and ranking, the process whereby different ‘things’ are made alike in order to be comparable and evaluated (see Yenkey, in this volume, for a related discussion on how transparency is used to establish trust in the stock market). The idea of measurability is vital for SRI – ‘the socially responsible’ has to be able to be measured. ‘Measurability’ in itself then becomes a prerequisite for showing how transparent something is. The increasing demand of various kinds of ratings and rankings has been linked to the development of so-called audit societies (Power, 1997) or audit cultures (Strathern, 2000). Rating and ranking are central components in this development directed towards greater transparency and accountability and towards making governance at a distance easier. But the apparently neutral results from ratings and rankings conducted by various companies and organizations are rarely controlled by outside actors (cf. Jacobsson, 2000). Hence, rating and ranking are central technologies for governance – especially for new forms of governance closely connected to issues on transparency, private authority and accountability (cf. Cutler et al., 1999). To use ratings and rankings as technologies of governance can be a way to influence without seeming to want to influence (cf. Porter, 1995).

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As opposed to conventional, formal regulation, rating and ranking are partly based on ideas of voluntary participation as in the case of CoreRatings’s governance ratings: the ones being evaluated themselves contribute information, knowledge and money to the process. But despite the idea of voluntary participation, it might in practice be more or less mandatory to have a rating from a renowned rating agency. The lack thereof might appear very suspicious in the eyes of future clients, lenders and investors. This means that rating and ranking can be indirectly standardizing since the actors being evaluated adjust to certain measuring and value criteria. Rating and ranking are based on certain methodological assumptions. Assumptions aiming at creating similarities between different actors, such as between people, between organizations and between nations (cf. Mallard, 1998). These kinds of evaluation processes presume clearly bounded, calculable, comparable units that can be listed, as in the case of CoreRatings’s seven-point scale or Banco’s categorizations of ‘easy in, easy out, difficult in, difficult out’. If these units are not calculable, they have to be made calculable which means that qualitatively different corporations, activities and contexts are given certain similarities. In a sense then, rating and ranking make co-operation and co-ordination possible since they tend to simplify, make visible, create, link and stabilize different relations (cf. Brunsson and Jacobsson, 2000; Lakoff, 2005). Various kinds of indicators, codes of conduct, indices and recommendations all measure value in one way or the other. Alongside evaluating the worth of someone or something, ideas and norms in relation to ‘good ways’ and to ‘bad ways’ of performing and organizing different kinds of activities are also produced (Bowker and Leigh Star, 1999; Shore and Wright, 2000). Through measuring, the technologies of ranking and rating meet economic efficiency, and meet moral order. Besides measuring technologies, the SRI industry depends on academics doing research on SRI. There is a normative edge to much of the academic research I refer to in this text (for example, Cowton, 1999; Dillenburg et al., 2003; Dunfee, 2003; Goodpaster, 2003; Laufer, 2003; Schwartz, 2003; Strudler, 2003). A frequent starting point and raison d’être for doing research on SRI seems to be to find out if SRI makes a difference or not, and if so, how it can be made ‘better’. That is, how it can make an even greater difference in terms of ‘doing good’. Many of the articles I refer to are published in the Journal of Business Ethics, and ‘doing good’ is part of the journal’s vision: ‘From its inception the Journal has aimed to improve the human condition by providing a public forum for discussion and debate about ethical issues related to business . . . “ethics” is circumscribed as all human action aimed at securing a good life’ (www.springeronline.com, accessed 8 April 2005).

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The stated aim to ‘improve’ in order to secure a ‘good life’ says something about the role academic researchers publishing in this journal are assumed to play. This perspective is often accompanied by ideas that valid knowledge on SRI depends on objective information available somewhere out there in the world for us to collect. The actual measurement, as such, of ‘the social’ is not viewed as a problem as long as the correct measuring tools have been applied. In other words, all we need to decide whether SRI does ‘good’ or not, is proper measuring tools. The fact that these tools themselves define what they measure is not problematized by these commentators. ‘Social responsibility’ becomes constructed as transparent, yet tangible, simply through the application of the ‘proper’ tools.

ACKNOWLEDGEMENTS This project was funded by the project ‘Social affairs: forms of governance for a normative economy’, funded by The Bank of Sweden Tercentenary Foundation.

NOTES 1. Dillenburg et al. (2003), p. 176. 2. The work of various non-governmental organizations and supranational organizations such as Amnesty International and the Organisation for Economic Co-operation and Development (OECD), the corporations being monitored and individual investors are here addressed only indirectly. They are nevertheless also important actors when it comes to bringing about SRI. 3. Incidentally, the most viewed article in April 2005 in the Journal of Business Ethics was a text called ‘Corporate social responsibilities theories: mapping the territory’ by Elisabet Garriga and Domènec Melé (www.springeronline.com, accessed 8 April 2005). 4. A common approach is that companies selling ethical investments put percentage limits on how much of a company’s earnings can be allowed from a certain activity. For example, Banco invests in companies that deal in tobacco, alcohol and arms only if the income from these activities does not exceed 5 per cent of the total takings. 5. ‘Non-profit’ refers here to the status of the organization the investor invests in, and not to the investment itself where a profit of course is desired. 6. CoreRatings, is owned by Det Norske Veritas (DNV), a foundation that sells ‘the services of managing risk’ (www.dnv.com, accessed 23 May 2005). Det Norske Veritas is in the business of classifications, certifications and consultancy and works with all kinds of industries.

REFERENCES Bancos etiska placeringsregler (n.d.), pp. 7–10. Bowker, Geoffrey C. and Susan Leigh Star (1999), Sorting Things Out: Classification and Its Consequences, Cambridge, MA: MIT Press.

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Brunsson, Nils and Bengt Jacobsson (eds) (2000), A World of Standards, Oxford: Oxford University Press. Callon, Michel (1998), ‘Introduction: the embeddedness of economic markets in economics’, in M. Callon (ed.), Laws of the Markets, Oxford: Blackwell, pp. 1–57. Cowton, Chris J. (1999), ‘Playing by the rules: ethical criteria at an ethical investment fund’, Business Ethics: A European Review, 8 (1), 60–69. Cutler, A. Claire, Virginia Haufler and Tony Porter (1999), ‘Private authority and international affairs’, in A.C. Cutler, V. Haufler and T. Porter (eds), Private Authority and International Affairs, Albany, NY: State University of New York Press, pp. 3–28. Dillenburg, Stephen, Timothy Greene and Homer Erekson (2003), ‘Approaching socially responsible investment with a comprehensive ratings scheme: total social impact’, Journal of Business Ethics, 43, 167–77. Dunfee, Thomas W. (2003), ‘Social investing: mainstream or backwater?’, Journal of Business Ethics, 43, 247–52. Dunn, Elizabeth C. (2005), ‘Standards and person-making in East Central Europe’, in Aihwa Ong and Stephen J. Collier (eds), Global Assemblages: Technology, Politics and Ethics as Anthropological Problems, Malden, MA, Oxford and Carlton, Australia: Blackwell, pp. 173–93. Foucault, Michel (1994), ‘Governmentality’, in J.D. Faubion (ed.), Power, vol. 3, New York: New Press, pp. 201–22. Garriga, Elisabet and Domènec Melé (2004), ‘Corporate social responsibility theories: mapping the territory’, Journal of Business Ethics, 53, 51–71. Garsten, Christina (2004), ‘Market missions: negotiating bottom line and social responsibility’, in Christina Garsten and Monica Lindh de Montoya (eds), Market Matters: Exploring Cultural Processes in the Global Marketplace, Basingstoke: Palgrave Macmillan, pp. 69–90. Garsten, Christina and Monica Lindh de Montoya (2004), ‘Introduction: exploring cultural processes in the global marketplace’, in Christina Garsten and Monica Lindh de Montoya (eds), Market Matters: Exploring Cultural Processes in the Global Marketplace, Basingstoke: Palgrave Macmillan, pp. 1–22. Goodpaster, Kenneth E. (2003), ‘Some challenges of social screening’, Journal of Business Ethics, 43, 239–46. Guay, Terrence, Jonathan P. Doh and Graham Sinclair (2004), ‘Non-governmental organizations, shareholder activism, and socially responsible investments: ethical, strategic, and governance implications’, Journal of Business Ethics, 52, 1–15. Hayward, Matthew L.A. and Warren Boeker (1998), ‘Power and conflicts of interest in professional firms: evidence from investment banking’, Administrative Science Quarterly, 43 (1), 1–22. Jacobsson, Bengt (2000), ‘Standardization and expert knowledge’, in Nils Brunsson and Bengt Jacobsson (eds), A World of Standards, Oxford: Oxford University Press, pp. 40–49. Krosnick, Jon A. and Duane F. Alwin (1988), ‘A test of the form-resistant correlation hypothesis: ratings, rankings and the measurement of values’, Public Opinion Quarterly, 53 (4), 526–38. Lakoff, Andrew (2005), ‘The private life of numbers: pharmaceutical marketing in post-welfare Argentina’, in Aihwa Ong and Stephen J. Collier (eds), Global Assemblages: Technology, Politics and Ethics as Anthropological Problems, Malden, MA, Oxford and Carlton, Australia: Blackwell, pp. 194–213.

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Laufer, William S. (2003), ‘Social screening of investments: an introduction’, Journal of Business Ethics, 43, 163–5. Mallard, Alexander (1998), ‘Compare, standardize and settle agreement: on some usual metrological problems’, Social Studies of Science, 28 (4), 571–601. Porter, Theodore M. (1995), Trust in Numbers: The Pursuit of Objectivity in Science and Public Life, Princeton, NJ: Princeton University Press. Power, Michael (1997), The Audit Society: Rituals of Verification, Oxford: Oxford University Press. Scheuth, Steve (2003), ‘Socially responsible investing in the United States’, Journal of Business Ethics, 43, 189–94. Schwartz, Mark S. (2003), ‘The “ethics” of ethical investing’, Journal of Business Ethics, 43, 195–213. Shore, Cris and Susan Wright (2000), ‘Coercive accountability: the rise of audit culture in higher education’, in Marilyn Strathern (ed.), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge, pp. 57–89. Social Investment Forum (2003), 2003 Report on Socially Responsible Investing Trends in the United States. Strathern, Marilyn (2000), ‘Introduction: new accountabilities’, in Marilyn Strathern (ed.), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge, pp. 1–18. Strudler, Alan (2003), ‘On socially responsible investing: a critical comment’, Journal of Business Ethics, 43, 215–17.

9.

Transparency through labelling? Layers of visibility in environmental risk management Mikael Klintman and Magnus Boström

INTRODUCTION: UNVEILING HIDDEN RISKS There is an intriguing tension embedded in today’s risk management, not least with regard to the environment. On the one hand, there is, arguably, increased public risk awareness in these times of reflexive modernity. This awareness is rooted in a critical view contending that scientific experts should not have the monopoly on defining, identifying or evaluating risks; nor should these experts have the monopoly on the decision-making process surrounding how to reduce or avoid these risks (Giddens, 1990; Lash et al., 1996). This critical view both necessitates and provides room for more open and deliberative processes for identifying and formulating risks and handling them (Hajer and Wagenaar, 2003; Macnaghten and Urry, 1998). On the other hand, the identification and handling of risks today often takes place through expert-based, standardized audits of practices and products with different assumed risk implications. Social scientists note an ‘audit explosion’ in most areas of society, characterized by ‘checking gone wild’ (Power, 1997). Practices and techniques for checking are widespread and widely used in a great number of organizations. Although social scientists – as well as policy practitioners, nongovernmental organizations (NGOs) and to a certain extent private firms – embrace both these tendencies (at least rhetorically), the relationship between a critical view among the public towards the role of experts, on the one hand, and expert-based procedures of checking and certifying, on the other hand, is far from obvious. For instance, certain accounting theorists maintain that instruments (such as auditing, certification and eco-labelling) aimed at a reflexive and green consumerism often are seen as stimulating a more open and critical society, but nevertheless presuppose a solid trust in experts controlling and managing the schemes (Day and Klein, 1987; Power, 1997; 2000). From this some conclude that such schemes are not a 178

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basis for fundamental reflection (Day and Klein, 1987, p. 244): ‘Trust [in audits] releases us from checking’ (Power, 1997, p. 123). Others disagree, and stress the new types of disclosure and visibility that the schemes have made possible (Beck, 1998, pp. 180–81). In the realm of a more socially and ecologically responsible consumerism, for instance, increased ‘visibility’ and ‘transparency’ are the main buzzwords (Micheletti et al., 2004). The often stated challenge is how to reveal unsensed risks, and production processes that are normally detached from everyday perception to reflexive consumers (Klintman and Boström, 2006).1 Through such a visibility, consumers are supposedly likely to choose goods out of an extended, more ecological rationality. This new visibility is also claimed to stimulate open debates and deliberations (Fung, 2003; see Crane, 2000 for examples). In other studies transparency is instead treated as an intrinsic end (for example, Liberatore and Funtowicz, 2003). The aim of this chapter is to move the issue a bit beyond the polarized views of profound critical reflection versus excessive trust in the checking procedures behind standards. We claim that the polarized views are largely due to an oversimplistic understanding of transparency. By comparing practical policy processes surrounding various standards, we aim to provide nuance to the issue of transparency. This study of policy processes, along with examinations of theoretical work in policy analysis, makes clear the limits of merely treating transparency in terms of ‘more’ versus ‘less’. A more thorough understanding of the promise and limits of transparency in policy processes requires, we argue, another dimension, consisting of qualitatively different ‘layers’ of transparency. The basis for our emphasis on this additional dimension is the obvious – yet often overlooked – notion that an examination of standards, which are in turn claimed to disclose hidden, and often physical, risks, needs to take the political context into account as well as the negotiations and framings surrounding the schemes on which the standards are based. Since risks are uncertain, socially and culturally dependent, and since they are evaluated and interpreted in many different ways by actors with diverse ideologies and interests, a more comprehensive transparency must reach far beyond the concrete visibility and direct awareness of the label itself. Based on these claims we find it useful to distinguish between four layers of transparency in relation to standards, certificates and labels: (1) simple, mediated transparency, (2) negotiated transparency, (3) intra-frame transparency and (4) inter-frame transparency (see Figure 9.1). We maintain, nevertheless, that transparency through standards and labels remains closely related to people’s own direct experiences of risks. Thus, experiences and senses of our environment never lose their relevance even in relation to very abstract, technical and expert-oriented tools. Hence, in addition,

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Transparency and regulation Critical frame reflection: ‘(How) Should the dominant frame be altered to include most important goals’?

INTER-FRAME TRANSPARENCY

Frame awareness: ‘Are criteria and procedures consistent with the dominant frame’?

INTRA-FRAME TRANSPARENCY

Awareness of substance and socio-political procedures: ‘What are the policy criteria; how, and by whom, have they been selected’?

NEGOTIATED TRANSPARENCY

Awareness of substance: What do the certificates or labels stand for? ‘What products and processes have been certified [which ‘obviously’ makes these products and processes preferable to uncertified ones]?

SIMPLE, MEDIATED TRANSPARENCY

Direct experience and perception: ‘What products and production processes appear to be less risky’?

Figure 9.1

Layers of transparency

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direct experience (yet situated, interpreted, and so on) is prevalent at all these four layers. Empirically, this chapter examines how these layers of transparency operate in the context of standardized eco-labelling schemes that are claimed to make invisible risks visible and manageable. Eco-labelling is relevant since it is one of the most widely spread and debated instruments for managing environmental risks (Jordan et al., 2003; 2004). The purpose of eco-labelling is to make production processes and substances visible through simplifications of complex, uncertain and contested environmental conditions. We use framing theory (Fischer, 2003; Klintman, 2006; Klintman and Boström, 2004) to examine layers of transparency in labelling processes and schemes. This chapter is accordingly influenced by interpretive policy analysis which, using discursive techniques, examines how policy issues are partly based on social values and subjective factors. The interpretive, post-empiricist tradition entails an interest in how ‘different discourses, definitions and questions lead to different policy prescriptions’ (Fischer, 2003, p. 14). Consequently, this chapter examines the role of language, symbols and rhetorical arguments – ‘framings’ – in the translation of complex and uncertain environmental impacts into categorical eco-labels. Various actors and organizations use sensuous and metaphorical language in order to create public trust and ‘cultural resonance’ (Gamson, 1992; 1995) in the labelling principles, criteria, thresholds and priorities. We illustrate our points by using illustrations from three cases: organic food, green electricity and sustainable forestry. Three general frames surround the debates in the three respective sectors: (1) the ‘natural v. unnatural’, (2) the ‘clean v. unclean’ and (3) the ‘biodiverse v. the monistic’. Being vague and flexible, these frames allow for selections of a broad range of knowledge practices, data and arguments. These descriptions may create sensory ‘experiences’ of the often very diffuse risks associated with certain practices, to gain ‘cultural resonance’ and in turn lead consumers to modify their purchases. On the other hand, as framing theory contends, simplification through framing always involves exclusion (Fairhead and Leach, 1998). Thus, it ought to be possible to derive the exclusion or disguise of certain environmental risks and arguments in the debates from the limitations constructed in the framing processes. Consequently, the chapter also investigates to what extent such schemes might work in the opposite way, that is, by obscuring certain risks. We use case study methodology, combining interviews, documents and websites as the primary empirical material of analysis. The three sectors of eco-labelling have been examined in Sweden, and have been described in our earlier publications (see below). Swedish eco-labelling schemes are of general interest, since they have been among the earliest schemes in the

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world in several sectors (Boström, 2003a; Micheletti, 2003). Moreover, Swedish eco-labelling schemes are often said to be among the ‘strictest’ by international comparison, in terms of thresholds and limits of undesired substances and production processes. Finally, the often stated Swedish consensual policy climate may have interesting implications in terms of transparency: in one sense it is largely open to whomever wants to participate in the organizations involved; in another sense, there is sometimes limited transparency due to difficulties, in a consensus climate, of perceiving problems beyond the frames of understanding that most actors agree upon (Boström and Klintman, 2006). This aside, our cases indicate a considerable variation in terms of consensus and conflict, which makes these Swedish cases no less interesting from an international horizon. The first case, organic food-labelling in Sweden, is organized by an inclusive NGO (KRAV), which has social movement organizations (SMOs), farmers’ associations and corporate actors (retailing and processing industries) as member organizations. KRAV also has a complementary relation vis-à-vis the Swedish state and the European Union (EU). There is high citizen awareness of KRAV, and people generally associate the KRAV label with products that are natural and good for one’s health, the environment and animal welfare.2 The second case concerns the main eco-label for forest products in Sweden, the FSC-label. The Forest Stewardship Council A.C. (FSC) is an international organization established in 1993 for the purpose of promoting sustainable forestry around the world. The members of FSC represent social interests such as trade unions, environmental interests and business interests. Sweden was in 1998 the first country to introduce a nationally adjusted FSC standard. Nearly half the Swedish productive forestland is certified in accordance with the FSC standard.3 The third case we use is the Swedish eco-label for electricity, which is controlled by the Swedish Society for Nature Conservation (SSNC), an environmental SMO. The label is called ‘Good environmental choice’ (in Swedish, ‘Bra miljöval’). The principle requirement is that only electricity generated through renewable energy sources can be labelled.4

FOUR LAYERS OF TRANSPARENCY Here we distinguish layers of transparency in relation to information tools that are assumed to shed light on production processes with reduced, invisible risks. The guiding idea of this chapter is that these layers of transparency differ in terms of level of abstraction and analysis. As we see it, these four layers (see Figure 9.1) range from a lower level of abstraction to a higher one.5 The empirical examples indicate that there are

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several factors that facilitate the potential for actors and groups to recognize higher layers of transparency. The multifaceted character of certain issues at several societal levels may, for instance, make local groups acknowledge discrepancies between their own problem framings and the dominant policy framings. Direct experience, often from the local level, may enable transparency and debate about the prevailing limitations of a policy. Moreover, media attention or communication by boundary organizations, such as social movement organizations – between sciences and the public – can help to shed light on further layers where transparency has previously been limited. People’s experience from other problem areas and places may also be a basis for public perception through a higher transparency layer. The layers of transparency differ in qualitative ways. They vary in the types of questions to which they give rise. The questions, in turn, are founded on different epistemologies, and are hence connected to different levels of trust in the experts and expert systems that design and control the policy schemes. The distinction between ‘higher’ and ‘lower’ layers of transparency are consciously formulated to imply normative differences between the layers. They are normatively different in the sense that debates based on higher layers of transparency are likely to be more epistemically advanced (for example, problematizing expertise and claims of knowledge certainty). This usually makes such debates reflect – or at least appear to reflect – a more thoroughly democratic practice. Still, as is discussed at the end of the chapter, the goals of transparency can differ. Consequently, the highest layer of transparency – if it entails fundamental criticism of the common understanding of the issue at stake – may not by all standards be the most effective layer, for instance, in terms of environmental or healthrelated outcomes.

DIRECT EXPERIENCE Direct experience and perception is anything but a simple form of sensing. For several decades, scholars in the human sciences have been well aware of the dependency of perceptual filters – as well as sociocultural frames – on human perception (Goffman, 1974). Thus, despite its directness, experience (of ‘lay’ persons as well as ‘experts’) is always situated and, indeed, mediated through cultural ideas and norms. It is beyond the scope of this chapter to make any further general claims within the vast research area of human perception as such. Instead, we will say a few words about direct experience vis-à-vis institutionalized tools, such as standardized product labels and certificates, which are claimed to make risk reductions visible.

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If the unique and positive characteristics of risk reduction were obvious by merely looking at an object (that is, as a ‘search good’ or ‘experience good’, explained below), transparency schemes, such as eco-labelling schemes for products, would be superfluous. In electricity and forestry, the end products are undoubtedly identical regardless of being eco-labelled or not. However, there is room – and, in some cases, a need – for preliminary separations between eco-labelled and unlabelled products also through ‘direct’ perception, at least in the case of food. Once the consumer acknowledges the eco-label, moderate and perceivable quality differences between products may strengthen the legitimacy of the labelling scheme (Klintman, 2006). But the differences should not be extreme, as emphasized by the market pragmatist pole in eco-labelling debates (Boström and Klintman, 2006). The more ‘natural’ organic food products should also have a ‘normal’ feel to them, that is, differences should be barely visible when compared with conventional sister products. They should not be repugnant, unusually pale or in other ways fundamentally different from conventional products. Nor should organic food be particularly colourful, since strong colour often implies artificial, unnatural, ingredients. It is also problematic to suggest that one may taste differences that are due to extra-healthy substances. Instead, the label ought to do the main job of making visible the risk reductions that are claimed with the label.

(SIMPLE) MEDIATED TRANSPARENCY There has always been a need for certain kinds of mediated transparency, which presupposes a degree of trust. In earlier times – as well as today in rural small-scale contexts, and within certain sub-local, urban contexts – personal trust in the provider of goods and services has long made standardized auditing schemes superfluous (Power, 1997). The person one trusts is expected to provide the customer with the mediated transparency. However, in reflexive modernity (Giddens, 1990; Macnaghten and Urry, 1998), where production processes are often highly disembedded from our daily lives, impersonalized schemes for certifying, labelling and auditing products and production processes have been increasingly called upon. Although such schemes are often treated as instruments of an open, critical and more reflexive society, these schemes nevertheless presuppose a certain basic trust in expert systems in which the schemes are controlled and managed (Day and Klein, 1987). People hope to be helped by an ‘artificial body, or exosomatic organ that supervenes upon and penetrates the “natural equipment” with which we are endowed at birth’ (Innis, 2002, pp. 131–2).

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Among labelling agents, all eco-labels are considered indispensable for making substantive differences in the production process visible. The differences are not directly visible through looking at, or using, the product. Darby and Karni (1973) distinguish between search goods (which can be fully evaluated by looking at the product), experience goods (for which the use of the product, such as eating, will reveal its qualities) and credence goods (which are impossible to evaluate even when using). Although Darby and Karni’s distinction may be helpful it erroneously implies, however, that most products are easily placed in one of the three categories. Instead, it is often the way actors frame a product, rather than ‘the nature’ of a product, that determines its category. Some would, for instance, argue that organically labelled foods framed as natural have higher quality than other foods (where ‘quality’ could have many, sometimes contradictory, meanings), whereas others would argue against such framings. For example, while many labelling agents admit that eco-labelled products will not cause a different risk sensation among consumers due to the unique characteristics of the end product, a common statement among labellers is that the labelled product will indirectly give the green consumer a different sensation. The consumers’ very awareness that they have chosen natural products causing less harm to the environment, farmers and animals will be beneficial to the health of these green consumers as well. According to this view, the ecolabel makes such benefits visible and thus triggers positive sensations among buyers (see Boström and Klintman, 2003, pp. 32–3). In discussions of mediated transparency the issue of complexity levels is often raised. Among researchers and practitioners involved in information schemes for making risks known, a common goal is to create simple, coherent and stable standards at national or international levels. This is usually regarded as the best way to create consumer trust and avoid confusion (Amaditz, 1997; Elkington et al., 1990; Organic Trade Association, 2002). Indeed, simple categorization is the most obvious characteristic of any ecolabel; to distinguish less risky production processes from the more risky ones. However, there have also been reactions to this simplicity. Some researchers and practitioners argue that the label itself is a basic separator of products and processes which needs a comprehensive complement of information (such as Erskine and Collins, 1997). ‘Increased transparency’ is often called for here. Could it be the case that the goal of one national or international standardized label is too crude for consumers who – through their insight into the products and processes – have become more individualized, or at least divided into segments of political consumer groups (Allen and Kovach, 2000, pp. 221, 228)? One reason for making the information more detailed and technical is of course to improve the mediated layer in terms of public transparency. Accordingly, consumers should have the

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detailed information needed to make their own judgements concerning how to handle the risks, and they may not agree with those who simplify the details and facts on a categorical eco-label. In Sweden, in several sectors such as electricity, for instance, there is an alternative to the eco-label: ‘the environmental declaration’. In such declarations, detailed information is provided concerning the environmentally relevant, substantive aspect of the production processes. A couple of objections can be raised to this alternative. First, there is the possibility of hiding certain practices in complex information. Making some production processes excessively visible may actually result in obscuring other risky practices. Second, environmental declaration has often been confused with eco-labelling, although no normative, environmental requirements are defined in the former tool. The fallacy of juxtaposing the willingness to inform about one’s production processes, with claims of beneficial and safe production processes is a central problem here. A more fundamental problem in this context is that this type of detailed and complex information gives the consumer the impression of neutrality and objectivity of the data presented. One may even say that this type of complexity involves the most problematic type of simplification: the exclusion of subjective and procedural aspects of how the schemes have been constructed and presented. It is appropriate to treat the inclusion of such procedures as a necessary condition for consumers to see through the next transparency layer, which we call negotiated transparency.

NEGOTIATED TRANSPARENCY The basis for the second layer of transparency is to acknowledge the importance of the subjective, procedural aspects of any attempt to reveal hidden risks – or rather, in our case, to suggest reductions of hidden risks. This acknowledgement is often ignored in current information schemes, many of which have the character of positivist endorsement of product labels as reflecting ‘truth’ or ‘what is really ecological’, or at least ‘more ecologically sound than’ (Klintman, 2002b; Klintman and Boström, 2004). The visibility that precedes the labelling schemes is often treated by their promoters as an absolute reflection of objective reality (see, for instance, Rhodes and Brown, 1997). Incessant calls for ‘more (substantive) facts’ are usually parts of this positivist view. In strong opposition to the positivistic view, the second layer – of negotiated transparency – concerns the interdependence between – and inseparability of – ‘substantive’ factors (of labelling criteria, thresholds, substances, and so on) and ‘procedural’ factors (of the political framing processes, strategies, goals involved, and so

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on). To make this interdependence visible may sometimes be far more relevant for making sense of ecological risks than, for instance, merely making the ‘substantive’, ecological information more simple or more detailed. The negotiated transparency allows actors to perceive how the organizational composition, power structures and stakeholder inclusion/exclusion shape the exosomatic organs that help to unveil hidden risks (Pepper, 1996). This type of transparency raises the issue of risk uncertainty. The knowledge on which the subject-dependent, risk-reducing standards are based may always turn out to be fallible (Klintman, 2002a). The first acknowledgement of this risk uncertainty, and the lack of absolute and perfectly maintainable thresholds, is in this context a fundamental part of negotiated transparency. Negotiated transparency makes it possible for any person to reflect critically on levels, thresholds and limits of ‘undesired’ substances and processes that are allowed in the standards and schemes claimed to reduce invisible risks. Seeing that social and political procedures always have to underlie criteria and standards to some extent invites critical reflection on the rationales for the levels and thresholds decided upon. Whereas eco-labelled goods are often presented as ecological in an absolute sense, the thresholds inevitably include a degree of compromise and pragmatism. Although there is often little transparency concerning these types of rationales in the labelling schemes themselves, it is interesting to note that such critical reflections have been part of debates surrounding labelling schemes in all of our three cases. Labelling projects and debates have to involve a broad array of actor categories – labelling processes tend to be inclusive (Boström, 2006) – meaning that the participating stakeholders are well aware that labelling principles, criteria and thresholds reflect a negotiated outcome. Yet, whereas this negotiated outcome may be apparent to all participants (representatives from interest organizations), the same participants may simultaneously not be very inclined to discuss the compromises in public. A mutual expectation among participants to be loyal and not to raise too much criticism against the labelling in public is a common ingredient in such organized co-operation. For example, the participants and stakeholders in the forest standard setting (FSC) were well aware that accepted thresholds reflect ‘pragmatic political compromises’ between groups – not any scientific objective truth.6 However, this clear indication of internal negotiated transparency was hardly communicated to a wider public. Yet, struggles and competition between eco-labels can facilitate negotiated transparency, and may also be the consequence of these struggles. For instance, disagreements about certain thresholds and procedural aspects (such as allocation of decision-making power in the labelling organization

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among stakeholders) in the Swedish FSC-standard made some participants leave this co-operation and join a new competing label, the Programme for the Endorsement of Forest Certification (PEFC) schemes (see Boström, 2002; Cashore et al., 2004). It should be mentioned, finally, that the critical question ‘why are the thresholds not stricter?’ could also be asked at the lower, mediated, layer of transparency where one may trust labels and standards more the stricter they are, as if there were no limits to the ability of science to distinguish, trace and maintain the stricter standards (Klintman, 2002b). But at the layer of negotiated transparency, calls for stricter thresholds may additionally be combined with questions regarding how stricter standards may be ensured and controlled; and whether stricter standards would make any crucial difference in terms of meeting the goals of, in our case, naturalness, cleanliness and biodiversity. The latter question may furthermore be closely connected to intra-frame transparency.

INTRA-FRAME TRANSPARENCY Transparency concerning how substantive and procedural factors are interrelated is the basis for all layers of transparency from negotiated transparency and above. The next layer, however, goes beyond reflections on thresholds or the organization behind standards for disclosing risks. The intra-frame transparency entails a visibility of the very substances and practices which do, or do not, fit within the established frames to which one subscribes. Although one may disapprove of the content of schemes for visualizing reductions of hidden risks in the labelled production processes, the main frames are frequently taken for granted. Disputes based on intraframe transparency often have the quality of disagreements (rather than controversies, cf., Schön and Rein, 1994), and presuppose a fairly consensual policy discourse climate (Klintman and Boström, 2004). For example, in the FSC-process all participants agreed on the basic frame of ‘biodiversity’ – no one questioned or tried to reframe what the labelling basically was about – but they debated quite intensively whether or not certain methods such as chemical fertilizers and the planting of certain foreign types of trees really cause depletion of biodiversity (but in the end those methods were not excluded from the standard). This kind of debate, for instance, led Greenpeace to the decision to withdraw from the process. Yet, Greenpeace did not question the underlying frame as such, that is, biodiversity (that is, Greenpeace did not move the debate through the fourth layer, cf. below). A difficult challenge for organizations and actors is to shape the main frames in ways that are both sufficiently concrete to stimulate sensuous and

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evocative language and experiences, and at the same time help lead to a consensus regarding risk-reducing policies. In the case of the green electricity standard, meeting these challenges has been fairly difficult. It is strongly defined by making its counterparts visible. Accordingly, green electricity is not generated by fossil fuels, or by newly constructed hydroelectric plants, natural gas, nuclear power, and so on.7 The sensory frame used here is mainly ‘cleanliness’, in close connection with the discourse of climate change. Yet there have been many reflexive, intra-frame debates surrounding the labellers’ interpretation of this frame. For example, in recent years there have been an increasing number of claims that nuclear power is ‘clean’.8 It is normally not viewed as unclean in the way fossil electricity generation is. In the policy discourse where climate change is treated as the main issue it has lately been more difficult for the eco-labellers to get cultural resonance for a frame that excludes nuclear power but includes, for instance, certain biofuels. In addition, since a planned phase-out of nuclear power to many people means an increased import of coal-based electricity from Eastern Europe, the visibility of increased ecological risks is obvious to many Swedes. A manifestation of this critical view within the frame of cleanliness is that a couple of electricity companies, a few years ago, offered customers the opportunity to buy electricity generated only by nuclear power – at a price premium. This shows that the work of maintaining an attractive frame that also meets the end of reducing a broad range of risks (including nuclear dittos), has not been entirely successful. Still, the green electricity scheme in Sweden has at least helped to stimulate intra-frame transparency, which is revealed in the many contested views on what is the ‘cleanest’ electricity source (cleanliness being the dominant frame of ecologically benign electricity production). This, in turn, has led to intensive debates on the basis of other layers as well.

INTER-FRAME TRANSPARENCY Through the fourth layer the transparency process and reflections do not merely take place within a frame upon which most actors agree. Inter-frame transparency goes further than shedding light on the content of – and reflecting on – how ‘facts’ and ‘means’ fall within the given frame. Through the fourth layer, critical reflections are enabled concerning the value basis and the usefulness of the frame itself. ‘Is the dominant frame too narrow or too broad? Do our own frames in fact contribute to the problematic situation? Should we perhaps completely change the dominant frame that has been used to shape the tools for making invisible risks visible?’9 Whereas disputes based on intra-frame transparency usually have the quality of

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disagreements (see above), inter-frame transparency is often the basis for more fundamental controversies (Schön and Rein, 1994, p. 187), which are particularly likely in adversarial policy discourse climates (Klintman and Boström, 2004). Inter-frame transparency entails visibility and critical reflection concerning the ends and bottom lines towards which prevailing dominant frames are oriented. Of the Swedish debates surrounding the reduction of ecological risks by standards, labels and certificates, the issue of ‘green’ electricity is one of the most contested and adversarial. Almost any case of green electricity generation in Sweden is in fact subject to inter-frame reflection and debate regarding the frame of cleanliness. In the heated debates, each mode of electricity generation is confronted with competing frames, for instance frames of ‘visual and auditory aesthetics’, ‘local wildlife preservation’ (where windmills are claimed be noisy and to kill birds), or as a threat to ‘biodiversity’ and to ‘locally valued ecological sites’ (particularly hydropower and biomass). Green electricity debates involve a broad range of diverging – often local – interests and ideals. It is fair to say that the green electricity label, through the frame reflexive policy discourse, has made the case visible in a more fundamental sense than the label itself has accomplished. In this way, a much broader range of risks and options are made visible than those that are merely included in the frame of cleanliness used by the actors standardizing the eco-labelling scheme. The biodiversity framing underpinning the forestry certification in Sweden is operationalized, for instance, in the criterion that the most ecologically valuable 5 per cent of the forest landowner’s areas must be permanently preserved. However, there have been attempts to widen the scope of FSC-certification using strategies of inter-frame transparency. The FSC certainly has principles and criteria aimed to ensure that forest management take into account the well-being of local communities.10 But ‘most ecologically valuable’ is defined by expert ecologists, and actor categories such as ‘social interests’ have had difficulties in voicing their concern (Meidinger et al., 2003), which is especially clear in the following case. In late 2003 and early 2004 an intensive conflict arose between the stateowned, FSC-certified, forest company Sveaskog and a protest group in a local community (Valvträsk). Sveaskog announced that it would fell a forest area that the local group found very valuable for outdoor life and tourism. It was framed as the ‘last intact mountain’ in the game protection area. The group received support from the Swedish Society for Nature Conservation among others. Sveaskog did not agree with the protesters, however, arguing that the company already complied with the FSC criteria, and could thereby legitimately claim that it already preserved the most valuable areas in terms of biodiversity. The SSNC admitted this, but

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pointed out that the FSC-standard reflects not only economic and ecological interests but also social interests. One local activist framed the threatened forest area as a ‘social key biotope’ in a critical response reflecting the less prioritized social dimension in the FSC standard. However, the attempt by the local community group to bridge the frame of biodiversity to a frame of social sustainability failed, and Sveaskog obtained support from its certification body, as well as from regional state authorities, to fell in the area.11 This example reveals an expert-dominant discourse in which the evaluation of lay persons based on life experiences is not taken into account in making the final decision. The inter-frame debate shows that the labelling not only helps to visualize environmental problems and solutions, but can also work to systematically obscure visible risks/hazards. The last point is even more apparent in the case of organic food. Eco-labelled, or ‘natural’, food is an area with a strong historical connection to small-scale and local food production. In fact, eco-labelling of certain food products (and production processes) came about as a critique of the increasingly ‘industrialized’ food production where food is transported around the globe despite the fact that local resources are available (Guthman, 2004). However, within the frame of ‘naturalness’, small-scale farming has been treated as an irrelevant aspect within the organic label. The socio-economic – and, some would argue, ecological – risks of not giving small-scale farming a particular status are excluded and made invisible through the eco-labelling of food. The same is true with global transports of eco-labelled foods. As to transport, the risks that consumers increasingly associate with ecological risks, for instance climate change, and which some would hold are already visible through flooding and other more dramatic weather changes, are in a way made invisible by the eco-label, which instead makes claims of ‘naturalness’ and ‘eco-friendliness’ (Boström and Klintman, 2003; Klintman and Boström, 2004). The original association between ‘naturalness’ and the local realm is thereby obscured because it is incoherent with the eco-pragmatic framing. The inter-frame transparency of some consumers and organizations concerning the limits to the ‘naturalness’ frame has so far not resulted in any louder, more general debates.

CONCLUDING DISCUSSION The purpose of this chapter has been to provide a basis for distinction between qualitatively different layers of transparency, with examples of policy tools for environmental risk management. The basis of these distinctions is the acknowledgment that an understanding of transparency

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aspects – not least of scientific and technological policies – requires a broader analysis, which takes into account political and cultural contexts. As to the transparency of risks and risk contexts, a crucial issue is to what extent labelling schemes can provide transparency that is broader and deeper than what the label itself offers. And the underlying question concerns the preconditions of transparency layers that are rooted in open reflection and sound scepticism among the public vis-à-vis the expert systems controlling the schemes. It was noted that what we call simple, mediated transparency is a main layer through which certificates, standards and labelling schemes are presented by the labelling actors, and analysed by certain groups of researchers: ‘How can we make consumers trust the labels by merely learning about what the labels stand for?’ ‘How can we make them see the benefits of supporting these labelling schemes?’ In light of this simple transparency layer, other researchers, particularly auditing theorists, have been troubled by audit reports and labels which – rather than communicate – ‘give off’ information using the rhetoric of ‘neutrality, objectivity, dispassion, expertise’ (Van Maanen and Pentland, 1994, p. 54). As a background to this concern, these scholars claim that (in our term) simple, mediated transparency requires an excessive trust by the public. Michael Power argues that ‘the audit society’ is only superficially a ‘distrusting society’ (Power, 1997, p. 123). We hold that the real problem emerges if the public believes that experts and policy-makers have a direct view of objective risks as well as a monopoly on evaluating how problematic they are, and what should be done about them. The transparency created by labelling schemes would – if the public holds simple, mediated trust – lead to a hybrid-type of modernity where the public critically reflects on broader social and ecological implications of their practices in daily life, although they do not try to critically reflect on the expert instruments aimed at making the risks visible. The most troublesome part of such excessive trust would be if members of the public do not strive for an independent, direct view of risk factors excluded from the dominant frames. Wilensky claimed – as long ago as the 1960s – that audit threatens to lead to a ‘learned ignorance’ (Wilensky, 1967, p. 191). Yet, by analysing the three eco-labelling cases we have elucidated three layers of transparency ‘above’ the simple, mediated transparency (see Figure 9.1). There are clear examples of how eco-labelling schemes may stimulate debates which have certain ‘periscopic effects’, as representatives of organizations and the public are able to debate and reflect critically on the categorical statements. This chapter has shown how several debates presuppose these other layers of transparency: where procedural and political aspects of labelling schemes are acknowledged, where inconsistencies with

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the frames surrounding labelling schemes are identified, and even where the interpretive frames themselves are questioned. These three higher layers of transparency indeed require critical eyes. In addition, direct experience is a basis for debates through all layers of transparency. A sense of inconsistency, arbitrariness and unproductive framings of labelling schemes is often triggered by direct perception of risk-related practices – among our cases particularly in ‘biodiverse’ forestry and ‘clean’ electricity generation. Local experiences are often particularly important for clarifying the transparency through the more abstract layers. However, it would be far too simplistic to conclude that the higher layers of transparency are preferable in all policy contexts, and by all democratic standards. The highest layer of visibility, in which the frames themselves are contested, certainly has much analytical and democratic appeal among social scientists. Dryzek, for instance, holds that ‘contestation . . . across the boundaries of different discourses’ [is] ‘the defining feature of a reflexive modernity’ (Dryzek, 1993, p. 227; 2001, pp. 659–60). Nevertheless, as we have shown elsewhere (Klintman and Boström, 2004), different policy discourse climates have different advantages and disadvantages in terms of policy efficiency and creativity in the policy processes. Whether a more consensual, intra-frame debate surrounding eco-labelled electricity would be preferable to the current, fragmented inter-frame debate obviously depends on one’s values and objectives. Likewise, whether the limited, intra-frame transparency of the eco-labelled food, which excludes transportation and the survival of small-scale farming, is preferable to a more ‘confusing’ and ‘fragmented’ inter-frame transparency and debate is also in the eyes of the beholder. It is clear, however, that calls for ‘more transparency’ (a phrase which gave 1 030 000 hits on Google.com in August 2006) need to be clarified in several (and rarely seen) ways to become meaningful. Hopefully, this chapter has provided some ideas concerning what such clarifications should include.

ACKNOWLEDGEMENTS Our idea of writing this paper emerged from the invitation to give a presentation at a workshop at Lancaster University, UK, led by Bronislaw Szerszynski and Linda Soneryd (22–24 October 2004). The workshop was entitled ‘Sensing the unsensed: environment, technological risk and the limits of the senses’. The workshop initiators and the other participants deserve our thanks for inspiration and advice. Moreover, Erika Jörgensen has our thanks for her collection of data for the case of eco-labelled electricity.

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This chapter is based on work funded by the Bank of Sweden Tercentenary Foundation, the Swedish Research Council, the Swedish Research Council for Environment, Agricultural Sciences and Spatial Planning, and the Knut and Alice Wallenberg Foundation.

NOTES 1.

2. 3. 4. 5. 6. 7.

8. 9. 10. 11.

The challenges of making visible the ‘invisible’ aspects of production processes may also be connected to Marx’s notion of commodity fetishism. This concept refers to the collective forgetfulness, a social repression, which the routines of consumerism contain in order to maintain the pleasures of consumerism. This repression constitutes a lack of awareness of the production processes (social, environmental, animal-related, and so on) through which consumer goods have been created. This repression is created through the market discourse and is tied to the everyday routines (Billig, 1999). In literature of (green) political consumerism it is held that a more reflexive consumerism can help to reduce this social repression and increase the awareness of the production processes (Allen and Kovach, 2000; Barham, 2002; Stolle and Hooghe, 2004). For more information, see Boström and Klintman (2003); Klintman and Boström (2004); and Boström (2006). For more information, see Boström (2002), (2003b) and (2006). For more information, see Klintman (2000); Lindén and Klintman (2003); Klintman et al. (2003). However, higher layers need not always lead to better policy discourse climates (Klintman and Boström, 2004) or to more efficient measures towards risk reductions. Several contested standards are possible for evaluating the results of such schemes. One such criterion/threshold is that 5 per cent of the landowner’s forests – the area with most nature values – must be permanently removed from exploitation. Hydroelectric plants constructed before 1996 are formally defined and labelled as ecologically sound and clean, while those built later are not. The basis for the distinction is that eco-labelled electricity was initiated in 1996. The environmental organization controlling the label, the Swedish Society for Nature Conservation, made the eco-pragmatic decision – in collaboration with the largest energy companies – that existing hydroelectric plants had already exploited the natural environments in an irrevocable way. And since its electricity generation was ‘clean’ compared to, for instance fossil fuels, it should be eco-labelled; something which the local population in the areas of the hydro plants have criticized. The nuclear waste problem has mainly been debated in the regions where storing has been planned (see, for example, Lidskog, 1994). Such questions are related to, for example, ‘frame bridging’, ‘frame extension’, ‘frame transformation’, ‘meta framing’ (see, for example, Babb, 1996; Boström, 2004; Gerhards and Rucht, 1992; Klintman and Boström, 2004; Snow et al., 1986). See www.fscoax.org/principal.htm, accessed 8 November 2007. Dagens Nyheter (2004).

REFERENCES Allen, Patricia and Martin Kovach (2000), ‘The capitalist composition of organic: the potential of markets in fulfilling the promise of organic agriculture’, Agriculture and Human Values, 17, 221–32.

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Amaditz, Kenneth C. (1997), ‘The Organic Foods Production Act of 1990 and its impending regulations: a big zero for organic food?’, Food Drug Law Journal, 52 (4), 537–59. Babb, Sarah (1996), ‘A true American system of finance: frame resonance in the U.S. labor movement, 1866–1886’, American Sociological Review, 61, 1033–52. Barham, Elizabeth C. (2002), ‘Towards a theory of values-based labeling’, Agriculture and Human Values, 19, 349–60. Beck, Ulrich (1998), Vad innebär globaliseringen? Missuppfattningar och möjliga politiska svar, Göteborg: Daidalos. Billig, Michael (1999), ‘Commodity fetishism and repression – reflections on Marx, Freud and the psychology of consumer capitalism’, Theory and Psychology, 9 (3), 313–29. Boström, Magnus (2002), Skogen Märks – Hur svensk skogscertifiering kom till och dess konsekvenser, Score Working Paper series 2002:3, Stockholm: Score. Boström, Magnus (2003a), ‘Environmental organizations in new forms of political participation: ecological modernization and the making of voluntary rules’, Environmental Values, 12, 175–93. Boström, Magnus (2003b), ‘How state-dependent is a non-state-driven rule-making project? The case of forest certification in Sweden’, Journal of Environmental Policy and Planning, 5, 165–80. Boström, Magnus (2004), ‘Cognitive practices and collective identities within a heterogeneous social movement: the Swedish environmental movement’, Social Movement Studies, 3, 73–88. Boström, Magnus (2006), ‘Regulatory credibility and authority through inclusiveness: standardization organizations in cases of eco-labelling’, Organization, 13 (3), 345–67. Boström, Magnus and Mikael Klintman (2003), Framing, Debating, and Standardizing ‘Natural Food’ in Two Different Political Contexts, Score Working Paper series 2003:3, Stockholm: Score. Boström, Magnus and Mikael Klintman (2006), ‘State-centred versus nonstatedriven organic food standardization: a comparison of the US and Sweden’, Agriculture and Human Values, 23 (2), 163–80. Cashore, Benjamin, Graeme Auld and Deanna Newsom (2004), Governing through Markets: Forest Certification and the Emergence of Non-State Authority, New Haven, CT: Yale University Press. Crane, Andrew (2000), Marketing, Morality and the Natural Environment, London: Routledge. Dagens Nyheter (2004), ‘Skogens framtid klyver landet’, 28 March. Darby, Michael and Edi Karni (1973), ‘Free competition and optimal amount of fraud’, Journal of Law and Economics, 16, 67–88. Day, Patricia and Rudolf Klein (1987), Accountabilities: Five Public Services, London: Joseph Rowntree Foundation. Dryzek, John S. (1993), ‘Policy analysis and planning: from science to argument’, in Frank Fischer and John Forester (eds), The Argumentative Turn in Policy Analysis, Durham, NC: Duke University Press, pp. 214–32. Dryzek, John S. (2001), ‘Legitimacy and economy in deliberative democracy’, Political Theory, 29 (5), 651–69. Elkington, John, Julia Hailes and Joel Makower (1990), The Green Consumer, London: Penguin.

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Erskine, Camilla C. and Lyndhurst Collins (1997), ‘Eco-labeling. Success or failure?’, The Environmentalist, 17, 125–33. Fairhead, James and Melissa Leach (1998), Reframing Deforestation: Global Analysis and Local Realities, London: Routledge. Fischer, Frank (2003), Reframing Public Policy, Oxford: Oxford University Press. Fung, Archon (2003), ‘Deliberative democracy and international labor standards’, Governance, 16 (1), 51–71. Gamson, William (1992), Talking Politics, Cambridge: Cambridge University Press. Gamson, William (1995), ‘Constructing social protest’, in Hank Johnston and Bert Klandermans (eds), Social Movements and Culture, Minneapolis, MN: University of Minnesota Press, pp. 85–106. Gerhards, Jürgen and Dieter Rucht (1992), ‘Mesomobilization: organizing and framing in two protest campaigns in West Germany’, American Journal of Sociology, 95, 1–38. Giddens, Anthony (1990), The Consequences of Modernity, Cambridge: Polity Press. Goffman, Erving (1974), Frame Analysis: An Essay on the Organisation of Experience, New York: Harper and Row. Guthman, Julie (2004), Agrarian Dreams: The Paradox of Organic Farming in California, Los Angeles, CA: California University Press. Hajer, Maarten A. and Hendrik Wagenaar (2003), Deliberative Policy Analysis, Cambridge: Cambridge University Press. Innis, Robert (2002), Pragmatism and the Forms of Sense. Language, Perception, Technics, University Park, PA: Pennsylvania State University Press. Jordan, Andrew, Rüdiger K. Wurzel and Anthony Zito (guest eds) (2003), ‘ “New” instruments of environmental governance. National experiences and prospects’, Environmental Politics, 12, 1–24. Jordan, Andrew, Rüdiger Wurzel, Anthony Zito and Lars Brückner (2004), ‘Consumer responsibility-taking and eco-labelling schemes in Europe’, in Michele Micheletti, Andreas Follesdal and Dietlind Stolle (eds), Politics, Products, and Markets. Exploring Political Consumerism Past and Present, New Brunswick, NJ: Transaction, pp. 161–81. Klintman, Mikael (2000), Nature and the Social Sciences: Examples from the Electricity and Waste Sectors, Lund Dissertations in Sociology, 32, Lund University. Klintman, Mikael (2002a), ‘The genetically modified (GM) food labelling controversy: Ideological and epistemic crossovers’, Social Studies of Science, 32 (1), 71–91. Klintman, Mikael (2002b), ‘Arguments surrounding organic and genetically modified food labelling: a few comparisons’, Journal of Environmental Policy and Planning, 4, 247–59. Klintman, Mikael, Kjell Mårtenson, with Magnus Johansson (2003), Bioenergi för uppvärmning – hushållens perspektiv, Research Report in Sociology, 2003:1, Lund University, available at www.fpi.lu.se/en/klintman. Klintman, Mikael and Magnus Boström (2004), ‘Framings of science and ideology: organic food labelling in the US and Sweden’, Environmental Politics, 13 (3), 612–33. Klintman, Mikael (2006), ‘Ambiguous framings of political consumerism: means or end, product- or process orientation’?, International Journal of Consumer Studies, 30 (5), 427–38.

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Klintman, Mikael and Magnus Boström (2006), ‘Editorial’, International Journal of Consumer Studies, special issue, entitled: ‘Promoting and Debating Political and Ethical Consumerism around the World’, 30 (5), 401–4. Lash, Scott, Bronislaw Szerszynski and Brian Wynne (eds) (1996), Risk, Environment and Modernity: Toward a New Ecology, London: Sage. Liberatore, Angela and Silvio Funtowicz (2003), ‘Making expert advice to policy makers more transparent’, Science and Public Policy, 30 (3), 146–50. Lidskog, Rolf (1994), Radioactive and Hazardous Waste Management in Sweden, Uppsala: Acta Universitatis Upsaliensis. Lindén, Anna-Lisa and Mikael Klintman (2003), ‘The formation of green identities – consumers and providers’, in Anders Biel, Bengt Hansson and Mona Mårtensson (eds), Individual and Structural Determinants of Environmental Practice, Aldershot: Ashgate, pp. 66–90. Macnaghten, Phil and John Urry (1998), Contested Natures, London: Sage. Meidinger, Errol, Chris Elliot and Gerhard Oesten (eds) (2003), Social and Political Dimensions of Forest Certification, Remagen-Oberwinter: Forstbuch. Micheletti, Michele (2003), Political Virtue and Shopping: Individuals, Consumerism and Collective Action, Basingstoke: Palgrave Macmillan. Micheletti, Michele, Dietlind Stolle and Andreas Follesdal (eds) (2004), Politics, Products, and Markets: Exploring Political Consumerism Past and Present, London: Transaction. Organic Trade Association (2002), ‘Passion for organic products sparks nearly 6,000 essays’, available at www.ota.com/news/press/18.html, accessed 8 November, 2007. Pepper, David (1996), Modern Environmentalism: An Introduction, London: Routledge. Power, Mike (1997), The Audit Society: Rituals of Verification, Oxford: Oxford University Press. Power, Mike (2000), ‘The audit society – second thoughts’, International Journal of Auditing, 4, 111–19. Rhodes, Stanley P. and L.B. Brown (1997), ‘Consumers look for the ecolabel’, Forum for Applied Research and Public Policy, 12, 109–15. Schön, Donald and Marten Rein (1994), Frame Reflection, New York: Basic Books. Snow, David A., E. Burke Rochford (Jr), Steven K. Worden and Robert D. Benford (1986), ‘Frame alignment processes, micromobilization, and movement participation’, American Sociological Review, 51 (4), 464–81. Stolle, Dietlind and Marc Hooghe (2004), ‘Consumers as political participants? Shifts in political action repertoires in Western societies’, in Michele Micheletti, Andreas Follesdal and Dietlind Stolle (eds), Politics, Products, and Markets, London: Transaction, pp. 265–89. Van Maanen, John and Brian T. Pentland (1994), ‘Cops and auditors: the rhetoric of records’, in Sim B. Sitkin and Robert J. Bies (eds), The Legalistic Organization, Thousand Oaks, CA: Sage, pp. 53–90. Wilensky, Harold (1967), Organizational Intelligence, New York: Basic Books.

PART III

Transparency and the Public: Participation, Exclusion, Ambivalence

10.

Transparency and participation: partnership and hierarchies in British urban regeneration Simone Abram

INTRODUCTION: ELEMENTS IN THE SEARCH FOR DEMOCRATIC LEGITIMACY In a basic sense, modern representative democracies derive legitimacy from electoral participation. Governments gain authority from their election by popular vote which provides a mandate. However, electoral turnout has declined dramatically in many Western European countries. In some cases this decline has reached a dramatic pass. While in the 2005 UK national elections, overall turnout was 61.3 per cent,1 in local elections turnout has in some cases dropped under 10 per cent, and in 1998 overall turnout was just 28.8 per cent.2 Given these conditions, maintaining the legitimacy of routine political representation becomes problematic. Even at the best of times, representative systems can be criticized for the unaccountability of politicians between their election and re-election a number of years later. The response of the New Labour central government in the UK from their election in 1997 was to promote direct participation of citizens in local government, and various kinds of public–private partnership. They argued that greater civic involvement in political processes would bring government ‘closer to the people’ (DETR, 1998a), and make local government more accountable. As political slogans, ‘Participation’ and ‘Transparency’ proved popular, but in practice it has become clear that in few cases did the government set out any detailed plans for what this might entail, nor was there any explicit or ideological model for practice. As Fairclough argues, the government voiced some positive-sounding policies, and waited to see how they would be implemented (Fairclough, 2000). This raises the potential for a folk-model of participative government to appear through local practice, where the meaning of both participation and transparency become rooted in practice rather than policy. This chapter examines the practice of participative partnership government through a study of housing regeneration in 201

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an English city, asking how the workings of local government, the housing market and the community sector may, or may not, have been made visible, or accessible to different actors. It suggests that as currently practised, increased participation does not necessarily lead to greater transparency, but can create confusion and disillusionment with public political processes. Personal relations are key to outcomes, yet contemporary governing ‘partnerships’ are structurally unequal.

TRANSPARENCY AND THE NEW LABOUR GOVERNMENT A useful way to approach the concept of transparency is through understanding it as a process of making visible, rather than revealing the hidden. As a political concept, transparency may seem to suggest that existing practices or knowledge should be revealed, yet in contemporary democratic spheres, transparency may be used to create objects of socialized observation, to render into existence a particular way of thinking about politics and government and lend it authority over others. Unlike the notion of the medical gaze of Foucault (Foucault, 1976) or the tourist gaze derived from it (Urry, 1990), which describe a particular way of looking at and perceiving the visual, discussions of transparency in government are almost exclusively metaphorical. There is no coherent body of the state which the outsider can look upon, hence the notion of transparency of government must be mediated, through text, voice or other media. Architectural metaphors of transparency have often been incorporated literally as expanses of glass to allow sight into and out of buildings where governmental activity takes place (see Timm in this volume). A glass wall in a government building may be a potent symbol of transparency, but what can be seen through it is problematic. Governmental transparency suggests the opening to visual perception of information, either through the availability of documentation or through access to discussions, for example. Since politics is dominated by language and its enactment (or actions and their textualization), documentation only tells a very partial story, yet the metaphor of transparency remains potent. The symbolic value of visibility should not be overlooked, however, and the recent new building for the London Assembly by Foster and partners in London exemplifies this architectural approach.3 Aside from literal visual transparency, Sanders and West suggest that in key institutions, transparency has become near synonymous with ‘good governance’ (Sanders and West, 2003). Good governance, in the British governmental context at the turn of the century, is heavily referenced with ideas of citizen participation. When the ‘New Labour’ government came to

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power in Britain in 1997, key among their manifesto commitments was the ‘modernization’ of local government, expanded upon in a number of government statements (DETR, 1998b; DTLR, 1999). In a period of political alienation, disenfranchisement and collapsing political engagement, they sought a reinvigoration of local political life. Much of this was associated with a language of civil society, which threaded into a broad agenda of local government reform to bring local government ‘closer to the people’ (DETR, 1998a). The issues of increased political activity among the general population and the transparency of public life were brought together in a political agenda to redefine both citizenship and government. Key statements defining issues of transparency and linking them with citizen participation included a 1998 document entitled Modern Local Government in Touch with the People, which defined a vision of future local government, ‘built on a culture of openness and ready accountability’, where ‘public participation in debate and decision making is valued’ (DETR, 1998a: ch. 1). Although public participation is stressed, the relationship between accountability and participation is opaque. Much of the document is actually concerned with promoting a change in the structure of the political organization of local government, from a committeebased to a cabinet-style parliamentary structure, where an elite selection of local government ‘ministers’ make policy decisions, theoretically tempered by ‘scrutiny committees’ of ‘back-bench’ councillors. Within this new system, the document defines transparency in these terms: ‘It will be clear to the public who is responsible for decisions’ (DETR, 1998a: ch. 1). Accountability is then linked with transparency, since ‘Increased transparency will enable people to measure the executive’s actions against the policies on which it was elected’ (DETR, 1998a: ch. 3). Much central policy on local government since the New Labour government took power in 1997 has suggested that accountability, transparency and public participation are linked, also through the integration of different government activities and services. An emphasis on public participation had been emerging for some time, and government sponsored research showed that many local authorities (municipalities) had experimented with participative activities (DETR, 1998a).

THE PARTICIPATION/TRANSPARENCY/ PARTNERSHIP TRIAD The goal of transparency was thus to be achieved with the tools of participation and partnership, forming a triad of policy goals. In practice this meant drawing private business and non-governmental organizations into

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a range of formal and informal arrangements. Participation is a conveniently broad term under which a wide range of governmental activities have been grouped, such as partnership, public involvement, integration, and so on. These have been used, often interchangeably, to suggest porosity between the boundaries of public and private sector activities. Under a general gloss of ‘governance’, political scientists have noted that current governments employ voluntary and non-profit organizations to provide public services, and acknowledge that government does not act alone ‘on’ the people, but is embedded in a complex web of relationships with many forms of organization (Stoker, 1999; 2000). This kind of insight has, of course, long been recognized in anthropology, but the adoption of ‘governance’ as an analytical term and as a political strategy must be identified as an ethnographic phenomenon. As Ward (1999) points out, local authorities have long employed private firms to carry out specified services, but although he claims this indicates that public–private partnerships are not new, the provision of major public infrastructure through loosely defined partnership arrangements including local residents is a recent phenomenon with roots in changing governmental ideas about development and community, and particular ideas about the relationship between local government and private sector businesses. What the roles are of the different members of such partnerships is far from certain or consistent, particularly due to the lack of detailed prescription or clear ideological statement. The enthusiastic promotion of public–private partnerships under a broad umbrella of ‘openness’ through community participation in policy and service delivery is one example of New Labour’s tendency to discursively link complex issues, without specifying operational details (Fairclough, 2000). Partnership has been a defining concept in almost a decade that New Labour has been the party of government, and serves as a conveniently broad term to cover a variety of arrangements. In its most extreme form, as the ‘Private Finance Initiative’, it has been used to draw private firms into providing large-scale public infrastructure (roads, hospitals, schools), some would argue as a way to hide the government’s borrowing figures (Foot, 2004). On a more local scale, various forms of public–private contract have been developed for a range of activities, including subcontracting of service delivery (for example, private companies providing school meals, cleaning services and waste management). The level of public control in these partnerships varies widely, from detailed contracts for specified services, to vague advisory relationships. Inevitably, public intervention in these partnerships is also rather varied, and there has been consistent criticism of private profiteering and deteriorating employment conditions within such partnership arrangements (Sachdev, 2004).

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Partnerships have been used as a framework for the involvement of a wide range of actors in local government projects, but the inclusion of business and commercial actors under the rubric of public participation has allowed business to be categorized as part of ‘civil society’, and has undermined efforts to re-engage citizens with ‘Politics’ through its formal structures of local government. However, where commercial organizations may be brought into a legally defined contractual relationship, community organizations are often invited to be ‘involved’, or sometimes ‘consulted’, in a less clearly defined way. Sometimes, the relationships between public and private organizations, individuals and informal institutions is not really specified at all, leading to many kinds of unpredictable or undesirable situations of conflict and confusion. Since ‘community participation’ is now seen as a desirable managerial method in governmental projects, many schemes, such as the one discussed below, are promoted in both private and governmental literature as successful ‘sustainable community’ projects, although the actual participation of residents remains problematic.4

URBAN REGENERATION: CYCLICAL URBANIZATION Context A key area of partnership governing has been in urban regeneration. Economic and industrial change in the later twentieth century left large areas of British cities derelict. After the Second World War, there was enormous investment in public housing in Britain, but successive rounds of rapid construction produced many poor quality buildings. Towards the end of the century, and into the twenty-first century, many large estates of prefabricated housing were in a poor condition. The scale of degeneration was highest in those cities which had the greatest proportion of council-owned housing, such as Sheffield in northern England. Here, several large areas of the city competed for central government funds, either to renovate housing, or to demolish and rebuild. The scale and scope of this activity encompassed not only building renovations, but changes to the built environment, public space and urban infrastructure, as well as tenancy-types, neighbourhood boundaries, and other aspects of social organization, such that the process is described by the broad term ‘urban regeneration’. In recent years, urban regeneration has been one of the main areas of focus of policies that seek to increase resident-participation, in the interests of greater governmental transparency and so-called ‘local ownership’ of changes.

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Norfolk Park Norfolk Park in Sheffield can be thought of as a typical 1960s utopian slum-clearance housing estate (Sheffield City Architect, 1962). The estate was built between 1963 and 1966 as a system-built modernist housing estate to house around 8000–9000 people from the Victorian slums of central Sheffield. Land overlooking the city centre on a south facing hill was obtained by compulsory purchase. The land consisted of around 200 acres of steep, rough heathland and smallholdings with various old mineworkings and redundant shafts on land which had once been owned by the Dukes of Norfolk. The housing estate was built by the local council, as a single scheme including three types of housing, 15 fifteen-storey twin-tower blocks, 74 blocks of four-storey maisonettes, and several hundred prefabricated three-bedroomed two-storey terraced houses set around footpaths. The whole estate was landscaped into a green parkland environment, adjacent to a formal Victorian park and woodlands (what is now called the ‘Norfolk Heritage Park’).5 The new housing was owned by the local council (or municipality) and was rented to people on low incomes, such as steel workers and engineering workers. In the early days of the estate there were long waiting lists, particularly for the terraced housing. During the 1980s, however, conditions began to change. First, the steel industry was radically restructured, and many steelworkers and engineering workers became unemployed. Second, the Conservative government of the time viewed the socialist politics of Sheffield City Council as undesirable, and effectively curbed them by capping redistributive local taxes and offering council tenants the right to buy their housing. At the same time, councils were forbidden to use their earnings from ‘right to buy’ (which in any case were low, as house prices were highly discounted), for further investment in public housing. Housing subsidies, which had once been directed through the city council for investment in infrastructure, were redirected to individuals and, as a result, support for tenants was significantly reduced and management of estates was cut back to a bare minimum. As one of the UK cities with the highest rates of public housing, Sheffield’s housing stock gradually fell into disrepair. Residents ‘on’ Norfolk Park (to use a local phrase) complain that the tower blocks, in particular, were badly managed, with inappropriate tenants causing social problems, a rise in drug-related activities and crimes, and structural problems appearing in the concrete of the buildings. In short, a fairly typical story of an idealistic 1960s housing estate reaching a point of despair in the 1990s, of which several similar examples can be found even within the same city. By 1994, housing in the area was in low demand, and aside from a new heating system installed in the late 1980s,

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‘otherwise the estate has had no major refurbishment since it was built’ (Sheffield Housing Department, 1994, p. 24). Problems noted included leaking flat roofs, condensation and spalling (deterioration of the steel reinforcement within the concrete), as well as the social and economic problems of acute poverty and long-term unemployment. Up to 40 per cent of tenants ‘expressed a wish to leave, by putting in transfer requests’ (ibid.). Several attempts to win government funding for improvements were unsuccessful during the early 1990s. An application made for ‘Single Regeneration Budget’ funding, then the current form of central government urban regeneration programme, was successful in 1996, with funding also derived from European Objective One (Priority 4) funds. Both schemes required community involvement in the regeneration process, and a community forum was formed in 1993 to be both a representative body for local residents and to generate community-level economic activity, and provide retraining schemes for local residents. In addition, the long-standing Tenants and Residents Association (TARA) and other selected groups were invited to join the Community Regeneration Working Group. A range of other organizations (parents and toddler groups, church and faith-based groups) were already established in and around the estate. Method In 2002, I visited Norfolk Park to set up a ‘case study’ for students of town and regional planning to learn about social research methods. My aim was to encourage them to empathize with the residents who had lived through the regeneration process. Students visited the estate and its building sites, and arranged to interview residents, business-owners and forum members and employees about their experiences. Shortly after, I began informal fieldwork, visiting the forum and attending both regeneration and local government meetings. In 2004, I began to develop a web-based teaching course, supported by the University of Sheffield, for which I interviewed and filmed both residents and ‘professionals’ involved in the regeneration. Filmed interviews were edited and made accessible to students through the website, and fuller footage was also edited into a 30-minute film entitled Living Through Regeneration (completed in 2005). My own fieldwork, research for the film and website, and the sum of the students’ work form the basis for the information and argument presented here. Poor Precedents Questions about community involvement in the regeneration of the Norfolk Park estate are often answered with reference to the invitation of residents

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to a competition held by the city council to appoint developers for the regeneration of the estate, soon after the funding had been secured. Four firms were invited to tender for the master-planning project, each of whom produced drawings with their ‘vision’ for the estate. According to community forum members, the residents’ overwhelming preference was for a company called Lovells. Their second choice was Miller Homes. Their least preferred entrant was a regeneration and construction company called Gleesons (who had, in fact, been involved in much construction work in Sheffield in the 1950s and 1960s). In the event, Lovells was excluded from the competition as they were being taken over by another company. Miller Homes were then chosen as preferred developer, and appointed a firm of architects from London, Hunter Thompson Architects, to draw up a master-plan. However, Miller Homes struggled with the scale and the risk associated with such a large project, and invited Gleesons to become partners, leaving the least preferred bidder as by far the largest partner in the project, along with a planning consultancy called Hall and Partners. This process was often cited by members of the forum as a precedent for the way that the community groups were successively excluded from any real influence in the regeneration, and later occasions on which their preferences and requirements were not met serve to reinforce the feeling of alienation. Following the appointment of the developer, a new joint-venture company was set up, that included Gleesons, Miller Homes and Hall and Partners and a ‘lead’ registered social landlord (RSL), North British Housing (which also had further partnership agreements with other social landlords). On the city council’s side, the project was managed by a special planning team known as the South Sheffield Regeneration Team, which was within the Neighbourhood’s Directorate of Sheffield City Council. Members of the team acted as observers on the board of the joint venture company, alongside members of the community forum, Tenants and Residents Association and councillors. In the regeneration team leader’s own terms, this large-scale project is managed by ‘a very loose partnership between the community, the council, the developer and RSL North British’. As he explained, ‘the whole thing is driven by a very complex development agreement which is between the city council and the developers’. In his terms, the process has been ‘extremely complicated’ and ‘at times extremely frustrating’. Such complexities did little to build confidence in the transparency of local-government led processes such as the regeneration of Norfolk Park estate (see Ward, 1999, p. 248). Although the governmental policyintention of partnership management specifically claims that it is in the interests of transparency and accountability, the managerial complexity found in practice veils the ambitions and intentions of project participants.

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Participation–Representation Participatory practices are additional to statutory representative structures of democracy in Britain. As such, they may be interpreted as a threat to the authority of elected representatives, whose role includes representing local views, with an electoral mandate. On the other hand, participatory schemes are often run by invitation, sometimes open invitation, but with no formal mechanism to choose who represents local residents. This has been criticized for undermining the electoral system rather than complementing it, and is often a source of tension for politicians (Cheyne and Comrie, 2002). This does suggest an ideological obstacle for participative policy-making within representative democracy which has certainly not been addressed by the UK government. What, though, does it mean for elected representatives in the partnership scenario? If partnerships were designed to increase the transparency of the governmental partners, how do councillors (elected representatives) engage in the partnership? British politicians are elected by geographic ward, rather than by comprehensive municipal lists, as in many other European countries. Hence, each subdivision of the municipality (or ‘ward’) is specifically represented by up to three elected representatives, in this case (although by no means always) all from one political party. However, such councillors face the dilemma, as one of the politicians confirmed, that ‘although you’re an elected member you are not necessarily only there to represent the community, you are actually there to make decisions in the best interest of the city as well’. In addition, councillors take formal responsibility for decisions made by administrators, so that their role becomes more managerial. As the councillor explained: Because you’ve got the links with the local community then I think the role is to tend to find out what the community want, whether the funding is available and whether the local authority and the other agencies can actually meet those needs. You’re also responsible for making the political decisions and that’s regarding whether you do apply for funding and whether you do put that money into the local area and you’re ultimately responsible for those officers that are making those decisions.

The representative role is therefore subjugated to a set of managerial responsibilities concerned with obtaining grant funds and complying with broader legal and political frameworks. This undermines efforts to make councillors more responsive to local interests, by emphasizing the more bureaucratic aspects of their role as mediators of national policy. Yet the contradictory nature of representation is seldom acknowledged in government papers.

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Elected representatives, thus, have a rather ambiguous role about which they may often feel ambivalent. In Norfolk Park that role has included managing funding applications and campaigning for funding to be directed to this project rather than other needy urban areas, chairing the regular regeneration team local meetings (with residents and other interested parties), and being among the observers on the board of the joint-venture company managing the actual building schemes. The latter is a form of scrutiny compatible with governmental definitions of transparency, yet does not extend to giving communities influence over which decisions are taken. Although they thereby take on the role of representing the local authority back to the citizens, the greatest presence of the authority is through the regeneration team (that is, the administration). Meetings, Meetings Throughout the late 1990s, the project architects held regular meetings on the old estate with residents, via the community forum and the TARA. The regeneration team leader described that the developers approach was to: very much involve the community in the development of the Master Plan and to make sure people were as involved as they could be on topics they were interested in. It was run as a series of workshops, one a fortnight with a very specific topic to each one. That culminated in the draft Master Plan being produced again at the end of 1999 that went to full council and was adopted as the Master Plan and wherever possible parts of the Master Plan were adopted as supplementary planning guidance.

This rather technical description promotes the idea of Norfolk Park regeneration as a well-designed process with exemplary involvement of local people leading into a policy process which then guided the redevelopment. Words like ‘involvement’ and ‘ownership’ are standard terms that are recognizable from overseas development discourses, yet have little specific content (Cooke and Kothari, 2001). Another interpretation of this process is that it set in motion what might be called a ‘culture of meetings’, which defined the subsequent process of ‘community involvement’. For regeneration managers, regular meetings are thought to be an effective way to communicate with local residents and to make information available. For some residents, though, meetings are often interpreted as an alternative to action. One forum member, Hermine, for example, said ‘My husband’s been dead for five years now and he used to go to the meetings, so that’s how long it’s been – it’s been going on eight or nine years now’. Joan, a member of the board of directors of the forum, also suggests that although the meetings were regular, they were not always satisfactory:

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They used to come up from London all the time for these design meetings and they used to bring these drawings up all the time and we used to talk all the way round them. We used to have a meeting every Tuesday and people just got absolutely sick because they just brought the same drawings and they weren’t getting anywhere ’cos there wasn’t any building being done at all.

Regular ‘regeneration team’ meetings carried on after the architecture meetings finished, with the aim of informing local residents of progress and picking up local difficulties. One key struggle with these meetings tended to arise when strategic issues were to be discussed, when meetings were still the only point of communication on general issues. The deputy chairperson of the community forum acknowledged a common frustration in participative planning, that, ‘the meeting which perhaps was called around something quite strategic, with members of the public, sometimes gets bogged down in grass cutting and blocked drains’. The second key difficulty is one of timescale, where issues raised at one meeting may be followed up over a series of subsequent meetings, with action taking weeks if not months. As one resident commented, ‘the trouble is, we keep having meetings and meetings and meetings, but nothing ever seems to get resolved’. To many residents, the meetings began to seem like a distraction. Hermine, said, ‘I think they’re giving us meetings like I used to give my kids smarties to count while I was doing my jobs, you know. Meetings, they let us have meetings; it kept us quiet, didn’t it?’ This rather stark divergence of views on the participative practices undertaken is a cause for reflection for various participants. Good Relations, Public Relations Despite the stated intentions of the regular meetings, community forum members and residents complain that public meetings often fail to provide the information they require, and the partnership structure is opaque and difficult to navigate. From the community forum perspective: We’ve often been asked by members of the community: who’s in charge of the process? Who can I talk to? Why is there a delay on a certain site? Is there is no single point of contact? There is no one who is at the top of the tree in terms of actually being able to control the regeneration process.

This complaint actually refers to two elements of complexity in the organization of the regeneration. First, the partnership arrangement where partners further subcontract, making it difficult for any partner to be fully informed about what is going on. Second, though, the whole site of the original estate was divided into 11 separate development sites for the

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regeneration process. The idea was that each site could be separately negotiated, so that if the main developer did not perform as required, then further sites could be offered to alternative developers. In practice, this barely happened, despite delays of up to three years, and few of the participants could explain why. What was alluded to, however, was the desire to develop and sustain ‘good relationships’ between partners. The regeneration team manager stressed this point, claiming that ‘Our relationship with the current developers is very good’, yet admitted that there had been delays. However, these delays, he said, were ‘not of anybody’s making, I think partly to do with the way the market is operating at the moment’. This statement conceals a desire to avoid recriminations, partly due, I would argue, to a sense of fragility in the council’s ability to retain partners in the regeneration process (of which more below). The good relationship did not necessarily appear to be reciprocal. The lead developer suggested that, ‘I have to say that there was quite often a divergence between the part of the planning department that dealt with policy and the part of the planning department that dealt with development control’. Yet it was in their interests to resolve issues such as one department insisting on houses being built close together to achieve ‘urban density’, and another insisting that they be built a certain distance apart to retain ‘privacy’. The developer suggested that ‘we have to work with different parts of the same organization to try and arrive at the broad consensus’. Discontinuities were not only to be found in the public sector, however. An indication of discontinuities within the private organization was one of the reasons behind significant delays on the project. The development firm had been structured into separate companies acting under an umbrella corporation. The construction division was thus a separate company subcontracted by the regeneration division for the joint venture company. When the construction company failed to meet their contractual schedules (having allocated the workforce to a more lucrative project in the city centre), the regeneration division had no effective power of redress. They did, apparently, consider suing for breach of contract; but taking legal process out between one part of the company and another could not be considered lightly, and was unlikely to have any useful outcome.6 Another discontinuity was in the personnel involved in the project. In large-scale development corporations, employees change jobs frequently, and this change is at least partly a sign of good career progress. The manager interviewed here was in the unusual position of having worked at the beginning of this project, and again towards the end, although over the seven or eight years in between he had taken a series of promotions and returned at a higher level. It is highly unusual for such managers to work

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on the same project from start to finish. Consequently, his appreciation of the progress of the project would rely on retellings of what can become ‘typical’ stories and complaints about the city council and residents, for example. Some of these were clearly erroneous, perhaps to a surprising degree. The manager suggested, for example (on record), that ‘Norfolk Park never had any real simple government support’, even though it had received over £40 million through the ‘Single Regeneration Budget’ scheme which covered the major costs of demolition on the site. Commitment to ‘Community’ Early in the process, local issues did appear to be included in plans and strategies. Efforts were made to recognize the stated views of local residents, such as their wishes to stay or return to the estate and the importance of local facilities. These were recognized in the early documents drawn up by the developers’ architects in documents such as a draft ‘Design Guide’ (Enterprise plc, 1999), which states: The strategy . . . is centred on local involvement, support and partnership. Both the physical and social projects which we have indicated will only be successful if they tackle real issues within the community, and have the support of the community and key organisations currently resident or associated with the area. (Ibid., paragraph 4.4.1)

Indeed, the document makes a great deal of issues raised by local residents, such as the following: ‘A key concern raised by residents is the need to ensure that service and facilities developed as part of the regeneration of Norfolk Park are accessible to everyone’, and, ‘the provision of accommodation for community resource provision . . . retail and primary healthcare services is considered to be of primary importance to the regeneration of Norfolk Park’ (ibid., paragraph 3.2.4.1). These documents were drawn up by consultants engaged by the partnership. Consequently the understanding built up by the consultants, and the social relations they developed with local residents, came to an abrupt end when their contract was fulfilled. It might be possible that development company managers could themselves build up local relationships. However, given the frequency with which they move between projects or companies, possibly as often as every other year or more, any relationships of understanding are frequently broken abruptly on development projects that may last between five and ten years (or sometimes more). Furthermore, project success, and hence career success, is measured in financial terms (for instance, how much profit is made per project), so other issues tend to be sidelined by careerist managers. Issues of environmental

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improvement are dropped, for example, since development companies that build to sell gain no financial benefit from the longer-term environments created by them. Environmental or social benefits are generally seen as luxury items and fall under what the development company manager described as ‘aspirations’ which are ‘not deliverable’. Despite this, residents and the community forum held on to the stated commitment of the authorities to a community-led development, and in particular the commitment to providing new premises for their activities. Community ‘Aspirations’ Given that the company’s promotion of the regeneration project relied on a stated commitment to continuity and recognition of ‘community assets’ (such as clubs, associations and social businesses), it is perhaps not surprising to hear the manager make reference to the idea of inclusion. He quickly reverted to a coded reference to commercial imperatives, though, such as in the following statement: ‘We really tried to understand where the community was coming from and what they saw as the future, but also to put that in a context of what would be deliverable because the aspirations of the community is not always something that is deliverable.’ ‘Deliverability’, here, indicates commercial returns. The ‘aspirations’ referred to certainly did not go beyond what is technically feasible or even well established. Developments so far include little by way of environmental technologies (even the most well established), nor do they reflect the preferences of local residents that were expressed in the early consultations. Where residents requested bungalows and recycling facilities, they were provided with two- and three-storey maisonettes and a withdrawal of bus routes. The private regeneration manager explained this as follows: The plan, in my opinion, had real aspirations for the area in design terms and rightly so, to try and achieve the best possible development. But the problem that we had was that no matter what anyone says, that high quality design is more expensive and we all say that good design doesn’t cost any more, in theory that is the case but in reality higher level of design and higher quality does cost more. The real problem we had at Norfolk Park was being able to square the values we were able to generate with the costs that were being arrived at as the consequence of the aspirations of the planners.

In this discourse, local preferences are categorized as ‘aspirations’, which clearly delineates community priorities from commercial choices. In the latter quote, aspirations have transferred to the planners, rather than the ‘community’, in a way which suggests that the manager distinguishes little between them. Costs, on the other hand, are treated as fixed entities which

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override other considerations, and (economic, not moral) values are similarly treated as calculable entities. Within this project, significant delays coincided with changes in market activities, in that housing market values started to increase significantly in the city. In common with many regeneration projects, while house prices may be extremely low at the beginning of a project, once regeneration begins to improve the housing quality and the environmental appearance of the area, house prices can recover substantially. In Norfolk Park, new housing for sale is attracting approximately double the estimates used to calculate regeneration budgets. Basic arithmetic suggests that this lifts developers’ profits substantially, and given that this is a relatively normal outcome, indicates that more environmentally aware building practices are not beyond the bounds of economic reason. It is perhaps not surprising that community forum members believe that developers are only interested in making profits, and that their own ‘aspirations’ have been ignored. One way to interpret of this set of local arguments is to raise a question about the power of risk discourses in this kind of process. There appears to be enormous respect for the financial risk-taking activities of developers, sometimes to the exclusion of all other aspects or partners (see Guy and Henneberry, 2000). Risk research has long recognized the difference between risk probabilities and experience, yet the power of risk discourse appears undimmed (Boholm, 1998; 2003). In this context, financial risk has moved to the top of a risk hierarchy, with potential loss of social relations or community assets languishing down the list in terms of significance when management decisions are to be made, and this is despite the enormous emphasis put on social aspects of the regeneration process in strategic plans and proposals. Some keys to the significance of risk are revealed in the regeneration team manager’s comments on the role of the developer: I think from the developers’ perspective there was a fair degree of risk in coming to an area where there was no track record of private sector housing at all and that has been developed very well . . . I think [the developers] would also agree with us that it is a very large development and they would anticipate us putting some sites to the open market and bringing in other developers, partly from their perspective of course to spread the risk but partly to accelerate the programme.

Financial risk discourse plays on the scale of potential losses when investments are made in millions of pounds, such as potential collapse of business, loss of employment, bad debt, and so on. It is also associated with the possibility that the redevelopment project may not happen if there is no money to pay for it. In this public–private partnership arrangement, although preparatory costs and infrastructure (roads, demolition) were provided through government funding, the new buildings are paid for by

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private investors/developers. Hence, without private investment, the scale of building envisaged in the master-plans would not take place. Although, historically, some sectors of the city have been built by individuals constructing houses for their own use, large-scale building projects (over, for example, 50 houses) are now built by so-called ‘volume’ developers on a mass-production system (see Murdoch and Abram, 2002; Ward, 1999). This regeneration project emerged after at least two decades of financial drought in the city. More importantly, however, those involved were acutely aware of a series of failed attempts to garner investment in regeneration projects in the city centre, where efforts to redevelop the (literally concrete) market halls failed to gain financial backing after a series of investors pulled out of negotiations one after another. For city council regeneration managers, the fear was very real that the whole project might collapse if no private developer was prepared to make a financial commitment. This fear was reinforced early in the process when, as noted, the chosen developer went into partnership with another to ‘spread the risk’. Second, although rational-choice economics suggests depersonalized relations between market actors, anthropologists are well aware that exchange relations carry layers of obligation, trust and negotiation. Given the struggle which regeneration managers had been through to first establish then enact the partnership governing the Norfolk Park regeneration, their continued commitment to it despite its failings indicates not only an emotional commitment to this model of management, but a reluctance to generate the levels of extra work – and further delays – involved in reconstituting a new or revised partnership. Financial risk discourse clearly took precedence over commitments to participation or to transparency. Financial transparency is expected of the local authority, yet not of private businesses, which claim commercial sensitivity precludes them from publicizing the details of their activities. The use of terms like ‘transparency’ waned significantly during the course of the regeneration process as commercial interests took precedence over community interests. The result of these changes included a disillusion among community forum staff and members, and other residents over the failure to achieve the participative development they had fought for. Aspiration or Ambition? It does not seem contentious to claim that there are different aims within this particular project, or that using the language of governmental statements can be a convenient way to claim legitimacy for certain actors. Neither is it particularly surprising that this language is not always descriptive of practice. What might be more interesting is to note the

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interpretation of this use of language. Given Sanders and West’s (2003) suggestion that the opposite of transparency is conspiracy, what conspiracies might be generated in this situation? One useful question might be to ask why a regeneration manager employed by the city council should be more interested in ‘good relations’ with a private development company than with community representatives. I do not believe that in this instance we need to concern ourselves with issues of financial corruption, and none were asserted, so we may put that simple explanation aside. On the other hand, issues of ‘reputation’ and ‘career’ were considered as possible motivations by community members. On several occasions, it became clear that the regeneration manager did not wish to see any public acknowledgement of the problems associated with the regeneration project, such as the three-year delay in the building programme. When community forum workers took their complaints to the council’s chief executive, they reported that the regeneration manager was ‘furious’, even though the chief executive acknowledged that the regeneration had hit difficulties. Similarly, the publication of a mildly critical report (Carley, 2002) reportedly provoked a grievance procedure within the local authority against a member of staff who defended the report’s criticisms. Indeed, a radio programme about the estate (BBC Radio 4, 2005), for which I provided the contextual analysis apparently ‘ruffled feathers’ in the regeneration team. Asked to account for this fury, community forum workers usually shrug, sometimes mentioning ‘career’ or ‘reputation’ as possible explanations, with the implication that criticism of the project has been taken as personal criticism of the regeneration team, who are engaged in public image work, as well as regeneration management. This partly suggests that the success of the project will be reflected as (or perceived to be) a personal success for the regeneration manager and his team. Hence, project goals, community ‘aspirations’ and personal ambitions are distinguished by participants. With personal prestige associated with project success, open discussion of problems becomes problematic. In addition, investors’ ‘confidence’ in projects may be fragile. Where failure is admitted, risk of withdrawal of investors is often named as a real threat and, consequently, a veil of happy, successful regeneration is drawn over problems, which can be treated as trivial, or already resolved. Avoidance of blame for problems has therefore become important. To date, I have found no evidence of complex conspiracy theories emerging on Norfolk Park, although I would not rule out discovering them. A more overriding discourse is one of disappointment, exasperation and disbelief both at the representation of the estate in policy-circles, and at the failure of organizations to learn from mistakes made during the regeneration.

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Contested Representations: Transparency or Concealment? Clearly, the representations of Norfolk Park as an example of transparent ‘good governance’ through partnerships and community involvement begin to look less than straightforward. The representation of Norfolk Park for a public sector conference on regeneration in Sheffield read as follows: ‘In Norfolk Park, the City Council and local residents are working together, using bold, imaginative solutions, to meet one of the most difficult challenges of regeneration – how to turn a failing monolithic council estate of 3,000 dwellings into a place where people actively want to live.’7 As she showed me the document, Joan, of the community forum, commented, ‘do you recognize Norfolk Park from that, because I don’t’. Along with other members of the forum, Joan often referred to the whole process as one of ‘degeneration’ rather than ‘regeneration’, since so many years had passed before anything demolished was replaced. The community forum’s premises were housed in an old shopping block, with flats above, opposite the community centre. But at the time of this exchange, the community centre had been demolished, and the tenants above the shops had been evicted and only the forum, a grocer and a joint post office and pharmacy remained in the block. Just as the forum’s staff had warned the regeneration team, as soon as the tenants moved out, ‘vandals’ broke into the empty flats to steal the copper plumbing, leaving broken pipes which flooded the floors below. The forum’s computer training suite was destroyed, leaving them begging others for help in housing their training schemes. Just a couple of weeks later, the forum’s offices themselves were broken into, and all their computing and other equipment was stolen. The forum was left with no premises and no equipment, on the point of collapse, and with no alternative premises either available or in prospect, despite months of work trying to find appropriate buildings. Despite all the plans and commitments emphasizing the importance of a new facility for the forum, with its job-net training and provision of civic services, they were effectively left with less than they started with.8

CONCLUSIONS: HIERARCHIES AND PARTNERSHIPS, TRANSPARENCY AND GOOD GOVERNANCE Where does this leave the question of structured gazes and the transparency of political and governmental processes, and how can the ‘folk models’ of participation be characterized? The kind of ‘culture of meetings’ adopted as a management strategy is one side of this local practice, but it falls within a broader framework of ‘partnership’ organization. The partnership

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presented here has different aspects, being presented in public through a metaphor of ‘working together’, yet being embodied through commercial structures such as joint-venture companies which are both hierarchical and exclusionary. Although it may be associated with the metaphor of transparency, to those involved in the regeneration effort, partnership appears, on the contrary, to be opaque, remote and often inexplicable. On a prosaic level, one might point out that the representation of the practice of regeneration is contested. If we want to draw broader conclusions about transparency and good governance, however, the issues are both deeper emotionally and longer lasting. Participants such as Joan, a resident and campaigner since the estate was built, or Hermine, an 80-year-old resident who has been moved from a tower block to an ‘extra care’ home, draw wider conclusions. In the kind of ‘symbolic amplification’ which Sahlins outlines (Sahlins, 2003a; 2003b), the failure of the partnership to be transparent or responsive to external influence and the failure of the management of individual projects to be democratically organized indicate a failing of governance that is more universal. They are also taken to indicate a lack of respect for elderly people and exploitation of ‘our land’ by disreputable companies. Such accusations rest on dilemmas which have not been resolved, such as that profit-oriented activity on the developers’ behalf is incompatible with the long-term sustainability ambitions of residents and, to a certain extent, planners. This is an issue singularly absent from policy and legislation that imagines developers as both business-minded and as benefactors, seeing no obstacles in their role in partnerships with public sector or ‘third’ (community) sector bodies (see Mouffe, 2000). Thus, in terms of ‘good governance’, there are fundamental inequalities behind the well-intentioned slogans of ‘community participation’ and ‘transparency’, which have not been addressed and which cause both anxiety and frustration. Further, given the very complexity of management arrangements, many of the partners find the whole process rather opaque. There is difficulty in establishing who has the authority to make decisions, who has responsibility for particular sites or site progress, in particular where chains of subcontracting may be in place.9 In this unfathomable complexity, there is no clear explanation for actions which do not accord with plans. Although no widespread conspiracies take the place of transparent explanation, explanation is sought through the idea of the market and economic might. Still, though, questions are raised about why the council treats developers leniently, and this remains a focus of speculation. A useful analysis of interactions between governmental authorities and protestors has been offered by Boholm and Löfstedt, who characterize the debates about planning through Bateson’s ideas about schismogenesis (Boholm and Löfstedt, 2004). They suggest that debates over controversial

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infrastructure tend to polarize into both symmetrical and complementary schismogenesis. They identify symmetrical schismogenesis in the build-up of techno-rational arguments put forward by proponents and opponents of decisions made by authorities. Complementary schismogenesis, on the other hand, lies in the adoption of more emotional and personal arguments by protesters, to counter the authority’s claims to be impersonal and objective (ibid., pp. 174–5). As emotive content escalates, the authority has no adequate response, and takes increasingly hard lines regarding the rationality of their decisions. In the case presented here, however, the authorities have expressed sympathy for emotional arguments and understanding of suffering, but then appeal to ‘wider forces’, such as markets, against which they have little power themselves. Markets are therefore appealed to as a common enemy. The embodiment of the market, in the form of development companies (investors), is one step removed from any argument, not least because the companies do not present themselves at public meetings. They are removed from any personal contact and absent from social relations. On occasions where employees have become engaged in local social relations, they have always eventually disappeared, usually through changing jobs. The city council regeneration team thereby absorbs the schismogenetic escalations, by presenting one face to local protestors and another to developers. No wonder that they find themselves ‘frustrated’ by the contrary demands put on them and the lack of recognition for their invisible work of defending conflicting interests. At present, however, I can offer no satisfactory explanation of why they have adopted this role. Public discourse on transparency of government, achieved through public access to information and involvement in decision-making processes thus appears far removed from the practice of local government-level planning and regeneration. While policy presents the population as a series of ‘communities’ which can be represented in participative exercises, acknowledging diversity can cause sometimes tacit conflict to emerge (Abram, 2000). In Norfolk Park, many residents do talk avidly of a ‘real community’ both in the 1960s and to some extent today, yet this does not mitigate a diversity of opinion and circumstance among an increasingly differentiated population. While policy and legislation continue to call on such crudely characterized imaginary categories, transparency will remain a rhetorical metaphor with little reflection in experience.

NOTES 1. BBC Politics (2005) ‘Blair wins historic third term: majority of 66’, http://news.bbc.co.uk/ 1/hi/uk_politics/vote_2005/constituencies/default.stm, accessed 9 August 2006.

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2. Office of the Deputy Prime Minister (2005) ‘Local election turnout 2005’, www.local. odpm.gov.uk/research/turnout/02.htm#1, accessed 9 August 2006. 3. See ‘City Hall Project’, www.fosterandpartners.com/InternetSite/html/simple.html, accessed 9 August 2006. 4. ODPM (2005) Sustianable Communities: Homes for All. 5. See ‘Welcome to Norfolk Heritage park’, www.norfolk-park.com/, accessed 9 August 2006. 6. It was not possible to discuss openly the causes of delays and non-completions as they are potentially the subject of legal action, although the level of detail above was offered ‘off-record’. 7. Room/RTPI (2005), ‘Sixth national regeneration convention making neighbourhoods sustainable services, skills and governance 18–20 July 2005’, Sheffield Hallam University, www.room.org.uk/convention/nrc6-vst.htm, accessed November 2007. 8. An experience shared by other forums, such as the award-winning Queensbridge Trust in Hackney, London. 9. A vivid illustration of subcontracting chains causing confusion and lack of accountability can be found in Ken Loach’s film The Navigators (2001), also filmed and written in Sheffield, which documents (fictionally) the effects of privatization in railway maintenance in the 1990s. See British Film Institute ‘Ken Loach: The Navigators’, www. bfi.org.uk/gallery/kenloach/navig.html, accessed 9 August 2006.

REFERENCES Abram, Simone A. (2000), ‘Planning the public: some comments on empirical problems for planning theory’, Journal of Planning Education and Research, 19 (4), 351–7. BBC Radio 4 (2005), ‘Thinking allowed’, 10 August, www.bbc.co.uk/radio4/ factual/thinkingallowed_20050810.shtml, accessed September 2005. Boholm, Åsa (1998), ‘Comparative studies of risk perception: a review of twenty years of research’, Journal of Risk Research, 1 (2), 135–64. Boholm, Åsa (2003), ‘The cultural nature of risk: can there be an anthropology of uncertainty?’, Ethnos, 69 (2), 159–78. Boholm, Åsa and Ragnar E.V. Löfstedt (2004), ‘Schismogenesis in a Swedish case of rail track planning’, in Åsa Boholm and Ragnar E.V. Löfstedt (eds), Facility Siting: Risk, Power and Identity in Land Use Planning, London: Earthscan, pp. 160–76. Carley, Michael (2002), Norfolk Park, Sheffield: Moving to the Leading Edge of Sustainability and Regeneration, a report, Heriot-Watt University, Glasgow. Cheyne, Christine and Margie Comrie (2002), ‘Enhanced legitimacy for local authority decision making: challenges, setbacks and innovation’, Policy and Politics, 30 (4), 469–82. Cooke, Bill and Uma Kothari (2001), Participation: The New Tyranny? London: Zed Books. Department for Environment, Transport and the Regions (DETR) (1998a), Modern Local Government In Touch with the People, London: HMSO. Department for Environment, Transport and the Regions (DETR) (1998b), Enhancing Public Participation in Local Government, London: HMSO. Department for Transport, Local Government and the Regions (DTLR) (1999), Local Leadership, Local Choice, London: HMSO. Enterprise plc (1999), Norfolk Park: The Design Guide, consultation draft (unpublished).

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Fairclough, Norman (2000), New Labour, New Language? London: Routledge. Foot, Paul (2004), P. F. Eye: An Idiot’s Guide to the Private Finance Initiative, London: Private Eye. Foucault, Michel (1976), The Birth of the Clinic: An Archaeology of Medical Perception, London: Tavistock. Guy, Simon and John Henneberry (2000), ‘Understanding urban development processes: integrating the economic and the social in property research’, Urban Studies, 37, 2399–416. Mouffe, Chantal (2000), The Democratic Paradox, London: Verso. Murdoch, Jonathan and Simone Abram (2002), Rationalities of Planning, Aldershot: Ashgate. Office of the Deputy Prime Minister (ODPM) (2005), Sustainable Communities: Homes for All, London: HMSO. Sachdev, Sanjiv (2004), Paying the Cost? Public Private Partnerships and the Public Service Workforce, Catalyst Working Paper, London: Catalyst. Sahlins, Marshall (2003a), ‘Artificially maintained controversies: global warming and Fijian cannibalism’, Anthropology Today, 19 (3), 3–5. Sahlins, Marshall (2003b), ‘Artificially maintained controversies (part 2)’, Anthropology Today, 19 (6), 21–3. Sanders, Todd and Harry G. West (2003), ‘Power revealed and concealed in the new world order’, in H.G. West and T. Sanders (eds), Transparency and Conspiracy: Ethnographies of Suspicion in the New World Order, London: Duke University Press, pp. 1–37. Sheffield City Architect (1962), Ten Years of Housing in Sheffield, 1953–1963, Sheffield: Housing Development Committee of the Corporation of Sheffield. Sheffield Housing Department (1994), Sheffield’s Housing Strategy 1994 – In Focus, Sheffield: Sheffield City Council. Stoker, Gerry (1999), The New Management of British Local Governance, Basingstoke: Macmillan. Stoker, Gerry (2000), The New Politics of British Local Governance, Basingstoke: Macmillan. Urry, John (1990), The Tourist Gaze: Leisure and Travel in Contemporary Societies, London: Sage. Ward, Stephen V. (1999), ‘Public–private partnerships’, in J. Barry Cullingworth (ed.), British Planning: 50 Years of Urban and Regional Policy, London: Athlone Press, pp. 232–48.

11.

A traumatizing transparency exercise on mobile phones and health risks Linda Soneryd

INTRODUCTION: NEGOTIATING TRANSPARENCY In 1999 the European Council decided to adopt a common standard for a third generation (3G) mobile phone technology (EC, 1999a; Lembke, 2002). In Sweden as well as in many other European countries there have been multiple local protests against planned transmitters and masts, as well as controversies over the risks and long-term consequences of radiation (Borraz et al., 2004; Burgess, 2004; Soneryd, 2004; Stilgoe, 2004). In 2000 the Swedish National Post and Telecom Agency (PTS) and mobile phone operators signed an agreement to establish a 3G net that would cover 99.98 per cent of the Swedish population by the end of 2003. By 2002, it was obvious that the establishment would be seriously delayed for various reasons including the extensive process of handling building permits and insufficient applications from the operators, as well as local protests against planned masts. The response from the Swedish Radiation Protection Agency (SSI) to this situation was to gather the groups that were critical of 3G in a ‘transparency exercise’. The aim of this chapter is to illustrate how transparency, rather than revealing hidden intentions and practices, forms an arena in which the legitimate participants, the responsibility of governmental authorities as well as legitimate sources of knowledge are continuously contested and negotiated.

THE CONTROVERSY In Sweden it is SSI that determines the nationally acceptable levels of radiation. They base their judgements on the recommendations by the International Commission on Non-Ionizing Radiation (ICNIRP) and the European Union (EU) (EC, 1999b). Whether the electromagnetic fields 223

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(EMFs) generated by 3G transmitters pose a risk to human health or not is disputed. There are several distinguishable but related controversies about the health effects of EMFs that are linked to different technologies (Brante and Norman, 1995; Stilgoe, 2004, p. 11). The science- and technology-based controversy over mobile phones and transmitters concerns a dispute over thermal versus non-thermal effects of EMFs. The thermal effects are heating effects. The frequencies generated by mobile phones and their transmitters are similar to those of a microwave oven. To be exposed to excessively high levels would literary ‘cook’ a person. Since the levels emitted by mobile phones are so low, and those of the transmitters even lower, it is generally accepted that heating effects do not pose a risk to health. The other side of the controversy focuses on the non-thermal effects. Following this line of research, exposure to EMFs can cause other biological effects than heating. For example, neuronal damage has been found in the brains of rats exposed to weak-pulsed microwaves that are similar to the EMFs generated by mobile phone transmitters. These biological effects are explained as caused by the relation between exposure and an increased permeability of the blood-brain barrier, which causes a leakage of albumin into the brain (Persson et al., 1997). Typically, the various studies reporting on non-thermal effects and different types of biological mechanisms have not been replicated in a sufficient extent of studies and for some of these studies the methodological quality has been questioned, which makes future replications difficult or impossible. Further, what is demonstrated in some of the studies of non-thermal effects is the existence of biological effects; what has been harder to establish are health effects (Burgess, 2004, p. 138). The studies on non-thermal effects do however unpick salient scientific uncertainties (Stilgoe, 2005) and in protests against both 3G and the current regulation of radiation, citizens demand stricter regulation and that the precautionary principle be applied. According to the Environmental Code (ch. 2, 3§) ‘precautions shall be taken as soon as there is cause to assume that an activity or measure may cause damage or detriment to human health or the environment’. When citizens question the way in which the precautionary principle is applied in this case, they at the same time contest the SSI’s judgement, made on the basis of current knowledge, as well as the boundaries between science and policy. The SSI has previous experience in responding to citizen mistrust, experience which was gained during controversies over nuclear waste management. In the 1980s and early 1990s the national nuclear waste programme and the related authorities were met by local protest and public distrust. To increase public trust the SSI, together with the Swedish

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Nuclear Power Inspectorate (SKI), and with the assistance of risk communication consultants, developed a model of transparency to improve the quality of communication with stakeholders. The authority now has more than 10 years’ experience in using this model, which was developed to ‘increase public trust’ and in which participants were already defined as ‘stakeholders’. This model framed the conditions for setting up the Transparency Forum for Mobile Phone Communication (from now on referred to as the TF). The following tentative analysis of the TF is based on personal communication with one of the consultants, working notes and minutes from the planning process, interviews with stakeholders and participation and observation at two of the TF seminars conducted.1 But before we turn our attention to the details of this case, a few general points will be made concerning increased pressure for transparency and more open and participatory procedures.

PRESSURE FOR INCREASED TRANSPARENCY Risk-regulating authorities must respond, in varying degrees, to pressure for change in the direction of greater openness, transparency and broadened participation (Hood et al., 2001). Organizations can respond to such pressures in many different ways. The result will be a multitude of arrangements for transparency, the making of particular elements or processes transparent, as well as the constitution of various audiences or publics for transparency. Moreover, the issues opened up for wider audiences are framed in various ways and imply certain characterizations of risk regulation, scientific evidence or implicit models of scientific citizenship (Irwin, 2001). In this context, the following dilemmas can be raised regarding greater openness and transparency in risk regulation (Rothstein, 2004: 858f). First, transparent and participative processes do not always, or in fact very seldom, admit any far-reaching policy mandates to a wider audience. Second, outcomes of participatory process are dependent on who participates in them and what they can add to discussions that are often very esoteric. Third, the specific arrangements of participatory processes must be viewed in the context of the broader regulatory framework. The organizations that express attentiveness to public opinion might be subordinated within the wider framework of rule-making, such as in the EU for example, posing an obvious limit on how different configurations of interests and pressures will be addressed in regulation. The following sections will focus on SSI’s response to the controversy over the 3G net and radiation protection. The transparency exercise

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described in these sections was arranged on initiative of the authority. There was relatively great openness in terms of participants’ influence on the framing of the exercise and it was made explicit that the aim was not to gear the outcomes into policies but, rather, to reach a greater understanding of each other’s positions. The range of invited participants was limited to stakeholders with a clear interest in the issue. A further restriction operating in this case is that the regulatory context of radiation protection is not limited to the national jurisdiction, but is partly shaped by the European Union and the international community. The case discussed in this chapter is thus an example of transparency in a policy process, aiming to give insight into governmental practices to a wider audience. (For another example of transparency in a policy process, see Viktorin in this volume.) The boundaries drawn concerning legitimate participants in the transparency exercise, their mandate to influence decisions and their range of responsibility is, however, not prescribed by the above-mentioned conditions. These boundaries are negotiated at the arena created in order to reach transparency. (For a discussion of transparency and organizational boundaries, see Garsten and Lindh de Montoya, Chapter 4 in this volume.)

FRAMING THE TRANSPARENCY EXERCISE The TF is a model for enhancing dialogue between various actors regarding complex technological issues. It emerges from a group of academics and consultants who are devoted to clarifying Values in Decisions on Complexity (the VALDOC group). Their model for risk communication (RISCOM) is based on ideas about transparency in risk communication and complex decision-making. The VALDOC group consists of people with academic backgrounds in technical engineering, risk communication and psychology, who define themselves as an informal network or virtual organization and present themselves as ‘a lobby group for awareness and transparency’.2 Involved in the TF for mobile phone communication were two of the consultants from the original VALDOC group. The TF is an application of the VALDOC principles, which are formulated as follows: 3 ●

●

A multi-perspective starting point: procedures should allow a wide range of participants to take part, presenting diverse perspectives on the issues at hand. A narrow framing, either technical or social, should be avoided. Stretching capacity: procedures should have the capacity to evaluate factual issues, uncertainties, value-laden and ethical issues. They should also offer the possibility of evaluating the authenticity of

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●

●

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decision-makers, participating stakeholders and experts, and to reveal hidden agendas. Impartiality and fairness: procedures for awareness and transparency must be perceived as impartial. Participants should have a real possibility of influencing rules and agendas. There must be sufficient time for the lay people to have a real influence, and for giving them resources for participation. Publicity: procedures should provide means for the public to gain insight and influence. Finally, it should reveal the reasons behind the decisions made, which means that the decision-makers themselves must participate openly.

The three cornerstones of the RISCOM model are derived from Jürgen Habermas’s theory of communicative action. This is summarized by a triangle (Figure 11.1). The basic idea of the triangle is that all decisions, in political as well as in scientific institutions, are based on both values and facts. Authorities, industry and scientific experts will be judged by a wider audience on the basis of their claim to objectivity, legitimacy and authenticity. According to this model, a decision can, for instance, be judged as correct regarding facts and social norms, but fail to gain any greater trust from citizens if they suspect that the decision-maker is not honest about the ultimate intentions (that is, has a hidden agenda). The ‘stretching’ exercises are assumed to make the cornerstones in the triangle visible and decisionmaking more transparent. Moreover, the definition of transparency used Facts Scientific methods

Dialogue

Legitimacy

Authenticity

Norms

Personal and organizational integrity and identity Trustworthiness

Source: Presented at TF; see also SKI (2004).

Figure 11.1

Facts, legitimacy and authenticity

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in the RISCOM-model emphasises the crucial role of a ‘guardian’ in the process: In a given policy area, transparency is the outcome of ongoing learning processes that increase all stakeholders’ appreciation of related issues and provide them with channels to stretch their operators, implementers and representatives to meet their requirements for technical explanations, proof of authenticity and legitimacy of actions. Transparency requires a regulator to act as guardian of process integrity. (Wene and Espejo, 1999, p. 404, emphasis in original)

The theoretical assumptions behind the TF can be seen as guiding the participants to formulate and identify indicators for transparency (for a related discussion of this, see Thedvall in this volume). However, the theoretical assumptions of the exercise not only imply a certain model of knowledge, visible in the relationship between facts and science in the triangle, it also assumes a model of human agency and rationality characteristic of modern western societies, and based on a division between thoughts and actions (see, for instance, Brunsson, 1995, p. 212). Since the model aims to make the thoughts (facts, norms, intentions) behind the actions (regulatory decisions and implementations) clear, it also assumes that there is a neat connection between the organization’s sphere of ideas and the sphere of action. This is not an unproblematic model and the relationship between thoughts and actions can be problematized in several ways.4 It is important to note that the consultants involved in applying the TF model for mobile phone communication did not think that the VALDOC principles were fully met in this case. Compromises had to be made, owing to financial restrictions, for example concerning the principle of publicity (the initial idea was that the TF in a later stage would be opened up to a wider audience). The Preparations In spring 2004, in response to several years of controversy over 3G and health risks, SSI invited other national authorities and representatives from local governments to discuss the possible form of a transparency exercise on mobile phones. At this initial stage the formulated aims of the TF were ‘to thoroughly elucidate controversial issues in a way that would be trustworthy for all actors’ and that the form and content of the exercise would be in ‘co-operation with all concerned parties’.5 This meant that the choice of a ‘guardian’ for the TF was left open to discussion with other concerned parties. Other issues left to be decided were the specific roles of participating actors as well as the time, place, size and

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documentation of the process. For the organizer, openness concerning form and content was a desirable goal as long as this did not too much compromise the RISCOM principles. For instance, in accordance with the model it was emphasized that the public interrogations and testing of facts, values and authenticity should be conducted in relation to distinguishable levels of discourse (for example, the levels of ‘system’, ‘localization’, and so on). This separation, it was stated, could be made through different formats of the TF, or by engaging different participants at separate TF exercises.6 After discussions between SSI and the national and local authorities the preparations for the TF were opened up to an extended group of concerned actors, which took the form of a reference group with the mandate to decide the content and format of the TF. It consisted of representatives of national authorities, local governments, the mobile telecommunication business and two ‘critical groups’: the Wave Breaker, who define themselves as an environmental organization opposing the widespread increase of electro-smog in society, and the Swedish Association for the ElectroSensitives. Now, with broadened participation, discussions started over the RISCOM model’s assumptions concerning the triangle, the guardian, the distinction between stakeholders and the general public, the publicity, and the separate levels of policy.7 Most of the problems and the different viewpoints on these terms were not solved before the TF exercises started. For example, by emphasizing the biased relationship between participants, a representative of the Wave Breaker questioned the triangle on the basis that some actors would never be officially accepted as capable of making valid judgements of the objectivity of facts. Further, it was obvious that participants had divergent views on who could be an appropriate ‘guardian’ of the exercise. One of the consultants suggested that SSI could play this role, while one of the Wave Breakers stated that ‘there are only two sides in this debate and SSI is on the industry’s side’.8 The situation was thus clearly polarized and the consultant group later admitted that it was a problem that SSI was hosting the event, since it would have been better if this role had been played by someone perceived as more neutral.9 During preparatory meetings the reference group discussed mechanisms for the participation of the general public. These discussions drew upon a distinction between a ‘silent majority’ and the ‘polarized groups’ present in the reference group.10 The general public was discussed by consultants, representatives from the authorities and the mobile phone industry, and presented as ‘unengaged’ or as ‘not opposing 3G technology’ – the latter a view opposed by a representative from the Wave Breaker, who stated that ‘the question is why this majority is silent. Those who worry most are the most enlightened.’11

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Although there were discussions over different possibilities for engaging various groups representing the public – for example, by putting together focus groups – no decisions were made at this point regarding if and how a wider public than the already predefined stakeholders should be engaged. Another issue was the size of the TF and the number of participants to be involved. The basis for this discussion was the desire to strike a balance between a sufficiently small group of participants, which would allow for a ‘good and effective dialogue’ and a sufficiently open forum, which would not restrict the possibility to reach the desirable goal of a ‘good elucidation’.12 Although diverging views over several elements in the model remained, an agreement was signed in spring 2004, stating that the parties now formed a reference group that had the mandate to decide the form for a TF on mobile phone communication.13 The agreement was signed between representatives from SSI, PTS (the governmental authority that monitors the electronic communications and postal sectors), MTB (an organization for suppliers, wholesalers and distributors in the mobile phone industry), two of the 3G telecommunication operators (Vodafone and TeliaSonera), the Wave Breaker and the Swedish Association for the ElectroSensitives. In the agreement these groups were defined as parties, and to them were added two consultant groups – first, the developer of the RISCOM model, who was chosen as the facilitator of the dialogue, and a second consultant group to assist with an overall picture of electromagnetic fields. Negotiations over the appropriate knowledge, its relation to decisionmaking and radiation protection measures and relevant participants and audience continued during the TF exercises.

CONDUCTING THE TRANSPARENCY EXERCISE The TF was arranged as three seminars, the first running for one day and the later ones for two days, during autumn 2004 and spring 2005. The content of these seminars were the roles and responsibilities of actors, current research, and risk judgements and the precautionary principle.14 The format of the seminars was a mix of group discussions and plenary sessions, presentations and interrogations. The organizer’s initial proposal was that the seminars should be considered to be a first phase, of value and importance in preparing a second phase. This second phase would involve elements of public consultations to a greater extent, and would be based on the knowledge and experience from phase one. However, the ElectroSensitives and the Wave Breaker did not want the telecommunication industry to finance any component of the debate and it was decided that phase two could not be conducted in the

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absence of the necessary financial resources (the authorities only financed phase one). Public consultations and transparency exercises like this are highly arranged events that can be used by regulating agencies and social researchers for the purpose of mitigating public critique. It is relevant to ask how these particular arrangements – the restriction to stakeholder participation and the polarized situation, as well as the assumptions that facts, values and intentions must be made transparent – affected discussions, and the demands on various participants engaged in the TF events. The First Seminar: Actors’ Roles and Responsibilities The first seminar was supposed to clarify actors’ roles and responsibilities so that ‘issues could be addressed in the right fora’ (such as political or technical, national or local, etc.).15 This goal was combined with the aim of getting actors acquainted with each other. For this purpose, the seminar was kept small (about 40 participants). Further, it was held in a place chosen for the benefit of the most severe electrosensitives. Because of this, the meeting started with several ‘unusual’ events. The first thing the participants had to do upon entering the meeting was to turn off their mobile phones, wrap them in aluminium foil and put them in a box outside the building. They had to do the same thing with their electronic car keys (after they had moved their cars further away from the building, if they had parked too close). One of the participants arrived in a special suit that protected him from electromagnetic fields. This man had been severely electrosensitive since the end of the 1980s, when he worked in the mobile phone industry and at the time of the meeting he worked as a scientific and technical adviser at the Swedish Association for the ElectroSensitive. The consultant’s view of these ‘unusual’ events (the aluminium foil and the protection suit) was that it was ‘very special’ and that ‘we were actually rather complaisant’ (regarding the demands of the electrosensitives).16 That other participants entered the TF meeting openly denying that the very phenomenon of electrosensitivity exists shows a clear picture of a very polarized situation. The seminar started with a few exercises in how to reach a good dialogue, after which SSI gave a presentation of the development of the mobile phone system in Sweden.17 In order to describe the various actors’ roles, fiveminute presentations were given by 13 organizations – three national authorities responsible for radiation protection, telecommunication and electrical safety; three organizations representing the formal political system (two local governments and the national government); three organizations

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representing the mobile phone industry and operators; plus one institute for public health, one company working for better work environments (owned by the Swedish Confederation of Professional Employees), and the two groups representing ‘critical groups’. The presentations by the 13 organizations contained different types of clarifications – concerning the actors’ worries over future harm, experiences of dialogue, official mandates and legal requirements, and experiences of illness. The day ended with reflections on the meeting, and participants obviously had divergent views. Almost all positive aspects listed in the minutes were countered by negations also recorded in the minutes. On the positive side were engagement, positive atmosphere, free discussions, getting to know each other, new propositions and ideas. On the negative side were the absence of important authorities, too much getting to know each other, unfocused discussions, lack of engagement, insufficient time and that the arena set up for the dialogue was unsatisfactory. The Second Seminar: Current Research and Risk Judgements At the second and third TF seminars, there were about 60 participants and the most severely electrosensitive man participated over the phone. Further, the focus was different. Now, ‘current research and risk judgements’ and ‘the precautionary principle’ were the topics for discussion, interrogation and stretching. During the TF exercises there were ongoing negotiations over the characteristics of scientific evidence and the sufficient knowledge (or sufficient lack of knowledge) necessary to take effective measures. The ‘critical groups’ raised issues about research that, in their view, had been disregarded and deserved to be integrated in the authority’s judgements. Further, divergences about methodological criteria were played out between invited speakers during panel presentations. Concerning the characteristics of evidence, epidemiology seemed to be the yardstick by which actors’ statements and evidence were measured. Researchers invited as speakers criticized each other for methodological failures during their presentations and conflicts between researchers were openly played out in a heated fashion. This was a controversial topic for the reference group – which experts to invite and how to keep a balance between researchers that were on the ‘critical’ side and those who were on the ‘non-critical’ side.18 That epidemiology shaped discussions was also evident when representatives from the Wave Breaker tried to put forward evidence that supported their claims. During group discussions, one of the Wave Breakers slammed a photocopy containing information about cancer clusters in areas near

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mobile phone transmitters in Europe on the table. This was information that she wanted to share with the others as proof of the risk of living close to mobile phone masts. Epidemiology thus shaped the terms for discussion, even when the evidence was presented by the ‘critical groups’, and it served to reduce the range of questions that could be raised; alternative bases for risk regulation and other kinds of relationships between science and policy tended to be excluded. Furthermore, the TF events contained a lot of ‘reminders,’ posed by the organizer, that the aim was to discuss ‘facts and the values behind the facts’. As such the consultants represented the ‘soft’ scientists and facilitators of the dialogue. One of the consultants had the explicit role of maintaining the dialogue as such, and preventing debate and antagonism. Sometimes the moderator (which at the second TF represented SSI) took on this task. After a polarized and intense discussion over electromagnetic fields (EMF) and health risks, the following dialogue took place between the moderator (M), a journalist who is also a Wave Breaker (WB), the director of the Association for the ElectroSensitives (ES) and, an anonymous voice from the audience (A):19 M: WB: [. . .] M: [. . .] M: A: M: ES:

The aim is to enhance dialogue, if you start beating up each other the dialogue is not so good We, who are concerned, we don’t have a forum, we are always rejected I can understand that, but as a person I become repressive when someone is trying to get at me. It can be frightening to create fora like this, and the last time I said ‘things can get worse than this’. Do beat us up, but not that hard . . . Most of the things we are doing here count as dialogue. Stretching means critical questions so it is not a ban, dialogue is important so you can affect us. We join in [agree on this].

At the seminar it was recurrently stated that ‘these are values’ or ‘we can learn from this’. At the same time ‘transparency’ clearly involved a struggle between the different stakeholders in the reference group preparatory meetings, as well as during the TF events proper. The Third Seminar: Precautionary Principle and Guidelines The second TF seminar was supposed to provide a base for the third. After having established the situation concerning research on health risk in the second TF seminar, the third and final meeting was supposed to discuss what to do with this knowledge base, and focused on the precautionary

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principle and guidelines. In this seminar the scope of participants was opened up to include representatives from the international commission of non-ionizing radiation, the Swedish environmental minister was present, and the moderator was a well-known Swedish broadcast journalist. The following examples show how participants, in varying degrees and in various ways, were asked by other participants to reveal the hidden facts, norms and intentions on which they based their positions and actions. When an official at SSI presented a preliminary version of the World Health Organization’s (WHO) precautionary framework, he was asked to give arguments for the view he presented, although he made clear from the beginning that it was not the SSI’s view or even the WHO’s official view he presented. The following dialogue between the SSI official and the journalist who is a member of the Wave Breaker (WB) reflects a concern with the quality of the reports that WHO bases their analysis on: WB:

SSI:

You said that the quality of these studies is bad because they only consider the distance from base stations, but there are studies that consider measurements in the home too. When we talk about 3G, we only have one study and this study shows negative health effects. How do you take this into consideration? [. . .] The exposure from base stations is very low under the guidelines and others do not agree with you on the quality of the studies you were referring to.

The dialogue did not seem to be getting anywhere. The SSI and WHO use certain criteria for judging the quality of scientific studies, criteria that the Wave Breaker does not share. The moderator (this time a broadcasting journalist) tried to help: ‘how can we make this woman (the Wave Breaker) more confident in SSI and what you say?’ This question was raised in a panel discussion between the SSI, an expert in law, other speakers and the wider audience. The conclusion made by the panel was that the parties could meet again, in a smaller group, and have deeper discussions over the criteria for evaluating scientific studies. The relation between knowledge production and economic interests was an issue raised several times by representatives from the Wave Breaker. On one occasion a Wave Breaker was pressured by the moderator to make his ideological preferences explicit (although no other participant had to do this). Knowledge production and risk regulation cannot be clearly demarcated from politics or economic interests. However, this was not a topic discussed in depth at the TF events. Moreover, what was striking during discussions were the difficulties and uncertainties as to when and how to apply the precautionary principle. One of the consultants made this clear in his presentation of the grey zone in

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between a situation when there is too little evidence in order to take precautions, and when there is evidence enough for making risk calculations. The idea behind the precautionary principle is that measures can be made even in situations where there is a lack of knowledge. The following quote shows that the amount of evidence needed was a topic for controversies at the TF events. WB: SSI:

Should we continue to eat poisonous mushrooms if SSI hasn’t seen that it is dangerous? I want to know what you ate together with it. If I worked at the mushroom authority I would first make sure that it was the mushroom that was dangerous.

When and how to apply the precautionary principle is a question of negotiation. In the quote above, it is suggested that in order to take measures we have to be absolutely certain that it is ‘the mushroom’ that is dangerous. However, since the precautionary principle means a reverse burden of proof, it is rather the other way around – demands are posed on taking measures if it cannot be proven that the mushroom is not dangerous. In order to make the precautionary principle applicable there must be some reason to suspect the harmfulness of a substance or enterprise. How this ‘reasoning’ is done, and how boundaries between science and policy are drawn is, however, always a matter of negotiation over the admissible evidence.

OUTCOMES OF THE TRANSPARENCY EXERCISE The aim of the TF was enhanced dialogue and transparency, to increase the understanding of various actors’ roles and values. Thus, outcomes should be evaluated in terms of how far participants reached an increased understanding for each others’ positions. The polarized discussions at TF events might be evidence of not having reached this goal, however, this type of outcome is obviously hard to measure and an ‘increased understanding’ does not have to imply radical changes to the participants’ initial positions. Further, the TF might potentially have other effects that go beyond its initial and explicit goal, although a proper analysis will require a more detailed look into policy-making in the aftermath of the TF, which falls outside the aims of this chapter. The obvious outcome of the Transparency Forum on Mobile Phone Communication is the final TF report. Two more outcomes are more unclear: follow-up meetings between concerned parties, and potential changes in judgements and regulatory decisions made by SSI.

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A potential continuation of the TF are a few activities which were suggested at the TF seminars, such as smaller meetings with the aim of deepening discussions over criteria for judging the quality of scientific results (between SSI, their expert committee and the Wave Breaker) as well as discussions between the Environmental Minister and a few of the concerned groups.20 In spring 2006 the full report on the TF was to be ready and publicly available. The reporting of the TF was something discussed by the reference group at the preparatory meetings. A proposal formulated by the SSI and later signed as an agreement between the parties stated that: The documentation and reporting of the TF is the responsibility of the SSI, however all parties should agree upon the contents of the reports before they are published. Participants can object to a certain report and this will be documented in the concerned report. Participants objecting to a report also have the possibility of writing a disclaimer of a maximum of two pages that will be added as an appendix to the report. All participants should be given the possibility of reviewing the description of their own opinions.21

To this, one representative from the Wave Breaker wanted to add that publishing will ‘take place only on the condition that all parties accept the reports’. This suggestion was dismissed by one present SSI official as ‘not reasonable’ since ‘a central principle for this Transparency Forum is that the discussions taking place should be open and made available to all, which will not happen if some reports can’t be published’.22 The suggestion of giving each participant a veto right concerning publishing was not accepted by the other participants in the reference group. Considering the regulatory context of radiation protection – with recommendations from ICNIRP and WHO, as well as EU regulations – it is unlikely that SSI will change their regulation on the basis of configurations of interests and pressures at the national level, especially since this pressure was brought to bear by stakeholders representing a small group of people, and not the ‘general public’. This makes it relevant to ask, more generally, what the main benefits or contributions of the TF might be.

CONCLUDING DISCUSSION: ONGOING ARTICULATIONS AND POTENTIAL CLOSURE The aim with this chapter was to illustrate that efforts aiming to reach greater transparency do not necessarily lead to ‘transparency’ in the sense of revealed intentions or practices, previously hidden. Transparency exercises like the TF on mobile phone communication can serve as arenas at which the

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legitimate participants, the responsibility of governmental authorities as well as legitimate sources of knowledge are contested and negotiated. This means that such exercises have the function of reformulating the conditions for the involved actors’ intentions, actions and practices and, as it were, creating new stories. In this case a new story line was to a great extent influenced by the theoretical model of the TF. Although there was still controversies over some of the assumptions in the TF model at the initial stage, all participants seemed inclined to stick to the model during the carrying out of the exercise. This could be seen in all participants’ efforts to raise questions over the facts, values or intentions on which the other participants’ argumentation was based. During the process of the TF, relevant actors, themes and positions were continuously negotiated. Although participants held polarised views there were also efforts made to understand other viewpoints than one’s own and to engage with the subject for discussion in various ways. The broadened participation, although restricted to stakeholder groups in SSI activities, resulted in a process that articulated the relation between 3G and health risks in a more nuanced way than SSI formerly had presented it. The process resulted in a mix of heterogeneous viewpoints and different kinds of boundaries drawn between knowledge and regulatory measures, scientific evidence and personal experience, and so on. The creation of an arena with the potential for bringing out this complexity can be seen as one of the main benefits of the TF. Further, the process was open and provided for opportunities for all actors to influence the proceedings from the beginning to the end. However, as in many other processes of broadened participation, it did not give any broadened mandates concerning policies and regulations. This makes the TF primarily an example of a process in which ‘talk’ is more important than decisions (see Brunsson, 1995). The TF can be seen as a highly arranged arena for talk about a controversial issue in which the regulatory organizations can be said to have the mandate to decide what knowledge and evidence will be admissible for regulation. However, during the TF events, positions were not fixed and negotiations were continuously taking place over the characteristics of scientific evidence, the relation between scientific experts and citizens, and the suitable audiences for the events. Because of this ‘flexibility’ the talk at the TF events could be referred to as articulations, that is, as propositions aiming to express and suggest various relations between the technology, human organization and potential health effects, rather than statements that demand that the relation between what is said and the real state of affairs can be validated. According to Bruno Latour (2004, p. 210) ‘the decisive advantage of articulation over

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accuracy of reference is that there is no end to articulation whereas there is an end to accuracy’. However, decision-making seems to be highly dependent on the kind of closure that a ‘statement’, that either refers to consensus or compromises among participants, can bring. A tension between the ongoing ‘articulations’ and the risk of closure in a final statement can be found in the ambivalence that the Wave Breakers expressed as to whether they should participate in the TF events and in their qualms about not having the total control over the final report.23 When reports are written about events such as this one, opinions are stabilised. The final report thus creates relatively stable stakeholder opinions. Articulations are transformed into statements, which later can be subject to traumatizing discussions as to whether these statements actually correspond to the state of affairs (that is, what was said at the TF, by whom and what do these statements represent). Although the TF reaches some kind of closure with the final report, it can also lead to future activities and further articulations. The SSI can use what they learnt from the TF, when responding to controversies and demands for transparency in the future. The TF is thus also an example of a practical exercise in how to change into a more open and transparent organization (for a related discussion of this, see Viktorin in this volume). Further, it may have resulted in a stronger mobilization among the opposing groups which would mean that discussions over mobile phones and health are not over.

ACKNOWLEDGEMENTS The author wants to express thanks to Renita Thedvall (SCORE), Nils Brunsson (SCORE), Kjell Andersson (Karita Research) for comments on an earlier version of the paper and Javier Lezaun (LSE) for help with language.

NOTES 1.

2. 3. 4.

Personal communication with one of the consultants, 14 February 2005. Participant observation at seminar two: Presentation and judgments of research results, 9–10 February 2005, Engelholms slott. Participation at the first day of the seminar. Participating observation at seminar three: The precautionary principle and radiation limits, 12–13 May 2005, Folkets Hus, Stockholm. Quotes from the TF observations are cross-translated by the author. The VALDOC group, www.valdoc.org/, accessed 28 February 2005. Ibid. See also Andersson et al. (2003). There are three problems in particular related to the connection between ideas and actions. First, there is the problem of translating ideas into action and vice versa. Second,

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5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

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there are contexts in which ideas are more crucial and there are contexts in which actions are more crucial. Finally, ideas may arise, change and disappear more rapidly than actions do (Brunsson, 1995). Minutes from the preparation meeting for the TF, 17 April 2004, SSI 2004/1828-52. Available at the Swedish Radiation Protection Agency, Stockholm. Ibid. Minutes from the preparation meeting for the TF, 9 June 2004, SSI. Available at the Swedish Radiation Protection Agency, Stockholm. Minutes from the reference group meeting, 16 August 2004, SSI. Available at the Swedish Radiation Protection Agency, Stockholm. Personal communication with one of the consultants. Minutes from the preparation meeting for the TF, 17 April 2004, SSI 2004/1828-52. Available at the Swedish Radiation Protection Agency, Stockholm. Minutes from the reference group meeting, 16 February 2005. Minutes from the preparation meeting for the TF, 17 April 2004, SSI 2004/1828-52. Available at the Swedish Radiation Protection Agency, Stockholm. Agreement on Transparency Forum on Mobile Phone Communication, signed 16 August 2004, available at the Swedish Radiation Protection Agency, Stockholm. A fourth seminar, ‘Communication and mass media’, was planned, but never took place. Agreement on Transparency Forum on Mobile Phone Communication, signed 16 August 2004, available at the Swedish Radiation Protection Agency, Stockholm. Personal communication with one of the consultants. Minutes from the first TF seminar: ‘Actors’ roles and responsibility’, 9 November 2004, SSI 2004/1828-52. Available at the Swedish Radiation Protection Agency, Stockholm. ‘Uncritical’ was not used as a term for any participant in the TF exercises, however, a consequence of terming the Wave Breaker and the ElectroSensitives ‘critical groups’ is that all the others are ‘uncritical’ or even ‘neutral’. Participating observation at the second TF. Participating observation at the third TF. Agreement on Transparency Forum on Mobile Phone Communication, signed 16 August 2004, available at the Swedish Radiation Protection Agency, Stockholm. Minutes from the reference group meeting, 16 August 2004, SSI. Available at the Swedish Radiation Protection Agency, Stockholm. Telephone interview with the informer at the Wave Breaker, 10 December 2004. The interview was tape-recorded and transcribed.

REFERENCES Andersson, Kjell, Britt-Marie Drottz Sjöberg and Clas-Otto Wene (2003), ‘Transparency and trust in risk management – the VALDOC approach’, paper presented at the International Conference on Risk Management for Preventive Medicine; Union of Risk Management for Preventive Medicine (URMPM), Tokyo, 27–28 March. Borraz, Olivier, Michel Devigne and Danielle Salomon (2004), Controverses et mobilisations autour des antennes relais de téléphonie mobile, rapport final, Convention d’études CNRS-FNSP et SFR, Paris. Brante, Thomas and Helena Norman (1995), Epidemisk masspsykos eller reell risk? En sociologisk studie av kontroversen kring elöverkänslighet, Stockholm: Symposion. Brunsson, Nils (1995), ‘Ideas and actions: justifications and hypocrisy as alternatives to control’, Research in the Sociology of Organizations, 13, 211–35. Burgess, Adam (2004), Cellular Phones, Public Fears and a Culture of Precaution, Cambridge: Cambridge University Press.

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European Council (EC) (1999a), ‘Decision No 128/1999/EC of the European Parliament and of the Council of 14 December 1998 on the coordinated introduction of a third-generation mobile and wireless communications system (UMTS) in the Community’, Official Journal of the European Communities, L17, vol. 42. European Council (EC) (1999b), ‘1999/519/EC: Council Recommendation of 12 July 1999 on the limitation of exposure of the general public to electromagnetic fields (0 Hz to 300 GHz)’, Official Journal of the European Communities, L199, 30/07/1999. Hood, Christopher, Henry Rothstein and Robert Baldwin (2001), The Government of Risk. Understanding Risk Regulation Regimes, Oxford: Oxford University Press. Irwin, Alan (2001), ‘Constructing the scientific citizen: science and democracy in the biosciences’, Public Understanding of Science, 10, 1–18. Latour, Bruno (2004), ‘How to talk about the body? The normative dimension of science studies’, Body & Society, 10 (2–3), 205–29. Lembke, Johan (2002), ‘EU regulatory strategy for mobile Internet’, Journal of European Public Policy, 9 (2), 273–91. Persson, Bertil R.R., Leif G. Salford and Arne Brun (1997), ‘Blood-brain barrier permeability in rats exposed to electromagnetic fields used in wireless communication’, Wireless Networks, 3, 455–61. Rothstein, Henry (2004), ‘Precautionary band or sacrificial lambs? Participative risk regulation and the reform of the UK food safety regime’, Public Administration, 82 (4), 857–81. SKI (2004), Transparency and Public Participation in Radioactive Waste Management, RISCOM II Final Report, SKI Report 2004:08. Soneryd, Linda (2004), Deliberations Over the Unknown, the Unsensed and the Unsayable? Public Protests and the 3G Development in Sweden, Score report 2004:6. Stilgoe, Jack (2004), ‘Experts and anecdotes. Shaping the public science of mobile phone health risks’, unpublished PhD thesis, University College London. Stilgoe, Jack (2005), ‘Controlling mobile phone health risks in the UK: a fragile discourse of compliance’, Science and Public Policy, 32 (1), 55–64. Wene, Clas-Otto and Raul Espejo (1999), ‘Meaning for transparency in decision processes’, in K. Andersson (ed.), Proceedings from the VALDOR Symposium on Values in Decisions on Risk, Stockholm, Sweden, 13–17 June, pp. 404–22.

12.

Promoting transparency, preventing war: neoliberalism, conflict preventionism and the new military1 Mattias Viktorin

INTRODUCTION In December 2003, a NATO-led military force, comprising troops from 26 nations, intervened in a conflict in Bogaland. This military operation did not receive much international publicity – probably because Bogaland, in a sense, does not exist. It is a fictitious country, and the military intervention was an exercise, carried out mostly assisted by computers. The exercise, called Viking 03, had been organized by the Swedish Armed Forces with the overall aim to improve civil–military co-operation in Peace Support Operations (PSOs). Almost a thousand people took part in this event, and among the participants were not only military personnel, but also representatives from civilian organizations such as the International Legal Assistance Consortium, Save the Children, and Amnesty International. The Viking 03 exercise epitomized three sets of significant transformations in the contemporary security environment. First, the changing role of the military – from national defence and warfighting to international intervention and peacekeeping. Second, the emergence of civil–military alliances, and a related merging of development and security. Third, the growing international interest in understanding, managing, and preventing violent ethnic conflicts. Among academics and other commentators, opposing positions have emerged in response to these transformations. One is mainly supportive. According to this perspective, the military needs to adapt to novel circumstances, and in order to succeed in international attempts at managing conflicts, improving civil–military co-operation is regarded as imperative. Another position is largely critical. It holds that military interventions constitute a new imperialism, thus disregarding civil–military co-operation as 241

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part of a process in which humanitarian aid is increasingly becoming militarized.2 I go beyond this debate. I use the term ‘conflict preventionism’ (Viktorin, 2005) to conceptualize these transformations, and I am interested in how, from an anthropological perspective, we could understand this emergent transnational form. More generally, I consider these transformations in relation to the expansion of neoliberalism and associated concepts such as international co-operation, auditing, and transparency. One main objective of Viking 03, for instance, was to ‘promote transparency between all parties’.3 For the organizers, this appeared to signal a self-evidently ethical direction for international co-operation; an axiomatic prerequisite for democracy and, ultimately, peace. In this chapter, I problematize this directionality. Based on fieldwork in Viking 03 – throughout planning, and during the exercise as well as the subsequent evaluation process – I ask how transparency was enacted within the project. Transparency is, of course, an ambiguous concept. Within Viking 03, to promote transparency meant to promote openness, which is also the most common meaning of the term: to make something ‘open to public scrutiny’. But transparency could also allude to that which is present yet persistently remains out of focus, something which is ‘functioning without the user being aware of its presence’.4 I use this double meaning of transparency in order to explore how conflict preventionism and neoliberalism intersect. While ethnographically I focus on how transparency was performed within Viking 03, analytically my discussion is oriented towards the implicit notions that structured, and were structured by, these practices. By shifting the focus from the first to the second denotation of transparency, I thus aim to ferret out the implicit constituents of what is regarded as obvious, in order to make these features visible, and thereby open to critical scrutiny. More broadly, this entails a critical approach for elucidating conflict preventionism and related forms of neoliberal governance.

MILITARY AUDITING AND THE FORCE OF TRANSPARENCY On the northern fringes of Stockholm stands a large brick building, surrounded by a barbed-wire fence. This is the Swedish Armed Forces Headquarters. Yellow signs inform that this is a prohibited military zone, and that photography and unauthorized entry are forbidden. It is, in other words, not the kind of place one would associate with the notion of transparency. Yet as the role of the military is shifting, transparency has increasingly

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emerged as a key concept in the organization of the armed forces (see, for example, Cooper, 2004, p. 27ff.; Florini, 2003, p. 32ff.). The Viking 03 project tangibly exemplified this. Viking 03 was the third exercise in a series of international civil–military projects organized by the Swedish Armed Forces. Like its predecessors, conducted in 1999 and 2001 respectively, it was a computer-assisted exercise focused on civil–military co-operation in PSOs. The main site was located in Sweden. From there the exercise was controlled and ‘distributed’ via the Internet to six so-called remote sites, located in different countries.5 Nearly a thousand people took part in the 2003 project,6 and the participants included military officers as well as representatives from international institutions, government agencies, and non-governmental organizations (NGOs).7 The exercise was conducted ‘in the spirit of’ the North Atlantic Treaty Organization’s (NATO) Partnership for Peace (PfP),8 and the process of planning followed a standard schedule for NATO PfP exercises, consisting of recurrent workshops and planning conferences. Most of these were organized at conference centres or military regiments in Sweden, and the number of participants on these occasions ranged from 10 to 15 people at the smallest workshops, to more than a hundred at the largest conferences. In March 2003, on one of the first days of fieldwork, I sat in on a military planning meeting at the Swedish Defence Wargaming Centre (SDWC) – an independent organization within the Swedish Armed Forces that had been assigned the main responsibility for organizing Viking 03. Prior to the meeting, I had worried about what the project members would think of my participation, and it was a relief to find everyone friendly and welcoming. As far as I know, no one ever questioned my presence. On the contrary, as planning evolved, people always talked to me in what seemed an unobstructed way, answering my questions openly and frankly. (Several participants even seemed to take a genuine interest in my work. For instance, I recurrently received emails with invitations to seminars and meetings, which they thought might interest me.) To some extent, the military way of organizing things explains this attitude: since the officer in command had agreed to my presence, nobody objected. The policy of transparency was another reason for this openness. Security has increasingly become based on co-operation and openness – on ‘mutual transparency’, as Robert Cooper (2004, p. 28) phrases it – and the expansion of an ‘audit culture’ (Power, 1997; Strathern, 2000a) is now evident also within the military. Viking 03 was no exception. As I received permission to conduct participant observation within the project, officers in charge assured me that no information would be restricted or classified.

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Viking 03 would be completely transparent. In a tangible way, of course, my presence as a fieldworking anthropologist within the project strengthened this policy. Throughout planning, the workings of audit were also discernible in the continuous evaluation carried out by the exercise evaluation group (EXEVAL). The officer in charge of this assignment repeatedly reminded the organizers that their efforts were constantly under observation and evaluation. I never came across anyone who seemed to mind this. Everyone thus readily accepted to make their work accessible to internal evaluation, and having an anthropologist observing, asking questions, and poking about. During informal conversations, people would even repeatedly tell me that it was ‘a good thing’ that I was following the project, because ‘it is always important to receive an outside opinion’. The discourse of audit was thus discernible not only in official presentations of Viking 03; it permeated all levels of the project.

INTERNATIONALIZATION, NEOLIBERALIZATION The fact that Viking 03 was conducted in the spirit of PfP related the project to processes of internationalization – a major theme in the contemporary reorientation of armed forces (Moskos et al., 2000). The PfP, initiated by NATO in 1994, currently comprises 30 countries, some of which have recently become members of NATO. (All countries participating in Viking 03 were either NATO or PfP members.) According to the NATO website, the overarching aim of the PfP is to ‘reinforce stability and reduce the risk of conflict’. This goal is to be achieved through establishing dialogue between NATO and each participating country: Joint activities and regular consultation improve transparency in national defence planning and budgeting, encourage democratic control of the armed forces and help nations equip and train to operate at the Alliance’s side, generally furthering the democratic values at the heart of NATO’s partnership policy. . . . By assisting participants with reforms, the PFP helps them build a solid democratic environment, maintain political stability and improve security.9

The PfP also ‘facilitates consultation and an opportunity to work together on issues such as disaster relief and civil emergency control, search and rescue and humanitarian operations, armaments cooperation and Peace Support Operations’.10 In a NATO PfP context, co-operation, transparency, democracy, and security are thus keywords. Many of these concepts were also explicitly emphasized in Viking 03. The main objectives of the project, for example, were to promote:

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Civil–Military Co-operation (CIMIC); Transparency between all parties; Multinationality; Contacts between the nations and individuals; The development of the ability to work together; and Greater co-operation and dialogue among the wider defence and security communities in NATO and Partner nations.11

A closer look at the internationalization of the military shows a logic which is decidedly neoliberal.12 Neoliberalism commonly refers to ‘a set of ideologies and practices, particularly at the level of national government policy, designed to facilitate or enforce the intensification and expansion of capitalist markets and trade’ (Hayden, 2003, p. 48). Yet neoliberalism also comprises new forms of governance that transcend an explicit focus on the market. The aim within Viking 03 to promote transparency, for instance, as well as the focus on partnerships between states and NGOs, signal a notable resemblance to particular processes of neoliberalization (cf. Gledhill, 2004, p. 333). Neoliberalism is often associated with a dismantling of the state. Processes of downsizing, however, are also typically paralleled with the emergence of new demands on states.13 In many contexts, state influence is thus not so much diminishing as transforming. At the intersection of security and development, for instance, Mark Duffield argues that governments have been closely involved in organizational changes and networks: ‘Rather than weakening per se, attenuation has been associated with the emergence of new linking institutions, modes of representation, contractual regimes, and so on. In this way, governments are acquiring the ability to project authority through non-territorial and non-state systems’ (Duffield, 2002, p. 72, his italics). The emergence of such systems constitutes a significant context for understanding the Viking 03 emphasis on civil–military co-operation and interaction between state and non-state actors. NGOs are typically regarded as ‘do-gooders’ (Fisher, 1997), associated with processes of grass-roots democratization. Yet the enlarged roles for NGOs in evolving civil–military structures are also often parts of ‘an ongoing neoliberal transference of governance roles from states to unelected actors’ (McCarthy, 2005, p. 743). Over the past decade, the Swedish Armed Forces have severely downsized. At the same time, the Viking series of projects have been highly prioritized by the Swedish government. One reason for this might be that conducting an international exercise in the spirit of Partnership for Peace, and making it transparent, is a way of ‘producing legitimacy’ (Power, 2003) on an international scale. The Viking 03 project thus in a sense constituted

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a ‘cultural performance’ (Munro, 1999) in which Sweden was represented as an independent international actor. The Deputy Exercise Director, Swiss officer, Peter Schneider, explained to me that ‘for those who, for whatever political reason, are a little bit more reluctant to join NATO PfP exercises that are NATO-led, this exercise offers an opportunity to share, in fact, the same know-how, but under Swedish command’. According to several participants, the Swedish Armed Forces also aimed at exporting the entire Viking concept to NATO. This might of course explain the choice of Viking as a typically ‘Swedish’ name (although one might also find the set of connotations associated with that name somewhat awkward in the context of peace operations). Perhaps most importantly, the export plans signalled that states, in accordance with a neoliberal logic, increasingly are transforming in a corporate direction (see, for example, Kapferer, 2005, p. 291). In order to explore the production of this directionality at the intersection of neoliberalism and conflict preventionism, I turn to the exercise and the fictitious Bogaland scenario.

NARRATING CONFLICTS, PLOTTING PEACE When Tony Stigsson at last appeared on stage, we had already been waiting for 20 minutes. A Swedish Major General, Stigsson was the so-called Viking 03 Exercise Director and the introductory speaker at the opening ceremony. The hall chosen for this event was spacious. Dimly lit by cold glaring lights, and with unpainted concrete floors, it was also rather unpleasant. Apart from a rostrum flanked by Swedish and United Nations (UN) flags on the provisional stage, the barn-like building was near empty. It was 2 December 2003 – the first day of the exercise – and it was freezing cold. I had arrived at the Uppland Regiment the previous day. Located in Enköping, about an hour’s drive from Stockholm, this was the Viking 03 main site. In the previous months, I had been there recurrently at workshops and planning conferences, and it had thus become a rather familiar place. This time, however, I noted that the area looked slightly different. Perhaps most conspicuously, 26 flags, representing all participating countries, were now flying outside the main exercise building. Armed sentries had also been posted at a military checkpoint adjacent to the exercise premises, presumably as a security precaution. (All exercise participants subsequently received a name tag and a permit, which had to be produced at the checkpoint in order to enter or leave the area.) This, of course, added a military touch to the exercise milieu; and although persistently presented

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as a civil–military project, it was immediately apparent to anyone attending the main site that Viking 03 had been organized by the Swedish Armed Forces. The divide between the civilian and the military parts of the project always appeared most palpably during formal events. The opening ceremony was no exception. When the participants entered the large hall, the military personnel immediately got into formation in front of the stage, seemingly as a mere matter of course. The civilian participants, on the contrary, appeared in this context hesitant about what to do. Most of them simply remained on the side or at the back of the hall throughout the event – looking decidedly out of place. From there, they followed the ceremony with what seemed to be a combination of curiosity and distanced amusement. Stigsson welcomed all participants to the Viking 03 exercise, addressing them as ‘fellow Vikings’. The aim of the exercise, he explained, was to ‘develop technology and procedures that can be used when preparing a brigade or a division for a specific peace support mission’. To improve this development, Viking 03 would subsequently be ‘carefully evaluated’. The emphasis in this regard – which signals clearly the link between conflict preventionism, neoliberalism, and audit culture – was on the form rather than the content: on ‘technology and procedures’, as Stigsson phrased it. Viking 03 was a scenario-based exercise, centred on interaction among the participants. No military troops, however, took part ‘in the field’. Instead, computers, written documents, and fictitious media (including television and radio broadcasts, as well as international and local newspapers), represented everything that occurred during the exercise. Participants also took part in various kinds of face-to-face meetings. The overarching plot of the exercise scenario was straightforward: a persistent local conflict in the fictitious country Bogaland ultimately comes to an end when a UN-supported and NATO-led international intervention is deployed. Yet descriptions of Bogaland were surprisingly detailed. A thick bundle of documents, covering everything from ancient history and geography to media and political organization, was presented to the participants at the beginning of the exercise. Special sections described the ‘road to conflict’ and elaborated on the ‘current situation’ in war-torn Bogaland. In addition, an eight-minute video-clip reporting from the conflict was produced, reminiscent of an international news broadcast. During planning, the organizers had put much effort into developing the background to this scenario. A range of typical ingredients – ethnic hatreds, religious clashes, territorial disputes, economic, and political issues – were all presented as integral to the conflict. When scrutinized closely, however, it was apparent that Bogaland did not constitute a coherent model of a

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conflict, but rather comprised a multitude of often contradictory ideas. What Gernot Grabher calls ‘situative pragmatism’ can help to make sense of this. It implies that ‘knowledge is valued according to its usefulness to solve the specific project task rather than to the authority of its disciplinary, institutional or departmental origin and status’ (Grabher, 2004, p. 1492). One critical project task for the organizers was to involve several disparate actors in the process of planning. In order to function as a useful tool in this regard, the Bogaland scenario had to remain inclusive and open-ended. At workshops and conferences, participants from military and civilian organizations were all encouraged to contribute to the scenario, and, indeed, almost every idea presented was stirred somewhat offhandedly into the Bogaland mix. Ultimately, the scenario content thus mirrored the interests of all participating organizations. This, of course, made most participants feel involved in the Viking 03 project, but it also implied that in its entirety, the final narrative did not make proper sense to anyone. The inconsistency of the scenario arguably helped to shift the focus of Viking 03 towards what was regarded as most critical: civil–military cooperation in Peace Support Operations. Emma from the Red Cross, for instance, told me that while she found several features of the scenario problematic, she nevertheless liked ‘the basic idea’. This opinion was common among several participants that I spoke to, and it arguably suggests that Bogaland referred to reality not in a carefully mimicked way but primarily in a moral or allegorical sense. It also suggests that conflict preventionism, although allegedly motivated by conflicts understood as local problems of global concern, centres on not a deep understanding of conflicts and their causes, but mostly on the solution and the way ahead.14 It is useful here to recall Hayden White’s distinction between ‘a historical discourse that narrates and a discourse that narrativizes, between a discourse that openly adopts a perspective that looks out on the world and reports it and a discourse that feigns to make the world speak itself and speak itself as a story’ (White, 1987, p. 2). Bogaland constituted an allegory for a reality which, once interpreted according to the basic plot of the scenario, appears to speak for itself as a story. The scenario thus functioned as a technology for feigning. Yet it is not the conflict in Bogaland that comes to life, but rather the ‘reality’ which it is understood to allegorize. The result, in other words, is not a coherent model of a conflict and its causes: it is a narrative, which narrativizes the world. It makes real conflicts ‘tell-astory-aboutable’ (Garfinkel, 1999, p. 33) in particular ways, which, in turn, imposes directionality on international responses. The workshops during which the content of the scenario was decided upon – which functioned as narrative involvement practices – were thus noteworthy for two reasons. First, because their common focus intensified

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a sense of interconnectedness among the project members. Second, because the chaotic and essentially incomprehensible conflict scenario that came out of this co-operation made an intervention characterized by civil– military co-operation seem like an adequate response. Against the background of the Bogaland conflict, it thus made sense to argue, as did the Viking 03 Exercise Director, Tony Stigsson, that the military has an obligation to ‘prevent violence through the use of force’. Apart from imposing directionality on international responses, feigning had other particular effects: it created an infrastructure for the enactment of transparency and auditing.

THE MERGING OF AUDIT AND POLICY During the exercise, I received permission to participate as an observer within the exercise evaluation group (EXEVAL). Again, the willingness among participants to be observed in combination with the policy of transparency made fieldwork easy, and although it was no secret that I was an anthropologist doing research, wearing a badge with ‘EXEVAL observer’ written on it was undoubtedly to my advantage. On one of the first days of the exercise, the EXEVAL group gathered to discuss the writing of the final Viking 03 evaluation report. Peter Schneider, the deputy Exercise Director, opened the meeting by asking rhetorically why the report should be written, and to whom it ought to be addressed. In the discussion that followed, the participants identified two different categories of readers as important. The most obvious addressees of the report were perhaps the planners of the next Viking exercise, who would of course be interested in learning from the 2003 project. Yet this category was considered to be of secondary importance. Instead, the EXEVAL group agreed to address the report primarily to the Swedish Ministries of Defence and Foreign Affairs. The rationale for this was that unless these politicians became convinced that the 2003 exercise had been a success, there would not be another Viking project. For this reason, Schneider stressed that the people who were subsequently to do the actual writing should be clearly informed about what to include, what aspects to emphasize, and what to leave out of the final text. The report would also include appendixes with comments from all participating organizations. EXEVAL could not influence the content of these sections, but Schneider reasoned that what mattered most was the introductory part. The main reason for writing the report and, indeed, for conducting the entire evaluation, as it appeared during this meeting, was in other words to

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promote another Viking project. To succeed, the deputy Exercise Director advised the writers to follow the general Swedish foreign policy in their description of Viking 03: to emphasize, for instance, that Viking 03 was a joint body of work between government actors and international actors. The exercise itself had only just begun when this strategy was established. In practice, the form and content of the evaluation thus emerged simultaneously with, or even preceded, the object of evaluation. During the closing ceremony on the last day of the exercise, the head of EXEVAL presented a ‘First impression report’. It stated that the ‘overall impression’ was that Viking 03 had ‘been executed successfully’ and that ‘it is the preliminary recommendation of the EXEVAL that there should be a Viking 05’. On the face of it, audit and policy might sound like opposite ends of a process. Yet, as the EXEVAL example shows, the distance between them is illusory (cf. Strathern, 2000b, p. 282).

EVALUATION, DE-POLITICIZATION After the exercise, two workshops – one civilian, the other military – evaluated the Viking 03 project. In January 2004, representatives from the participating civilian organizations met together with two military officers. The Swedish Emergency Management Agency (SEMA) had organized this two-day meeting, and a spokesperson from the agency presented the workshop as an opportunity for the civilian participants to ‘make their voices heard’. The aim, he explained, was to suggest improvements for future exercises, and, ultimately, to develop the Viking exercise concept. Throughout the afternoon, the participants discussed the exercise. Representatives from several organizations pointed out that it had been difficult to get a full picture of what had actually happened in the fictitious Bogaland scenario. As one woman from Save the Children put it, ‘We found it difficult to get a full picture; we thought the technology took too much space. It was more of an annoyance than of help – but maybe it’s because we are not so technical’. There were other problems related to the dominating technology. Participants pointed out that rather than taking part in actual civil–military co-operation during the exercise, everyone had been stuck most of the time in front of a computer. Representatives from all organizations agreed that the military participants had been interested in the civilian parts of the exercise. Yet, as one man from the Red Cross remarked, this will among the military personnel to co-operate and to meet the wishes of the civilian organizations had been exaggerated: ‘In the different incidents, we [from the Red Cross] always got exactly what we wanted, which perhaps did not mirror a real situation,

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where [for the military personnel] there are also other concerns to be taken into consideration.’ Another issue had to do with the use of the CIMIC concept. A NATO abbreviation for civil–military co-operation, CIMIC is a military term denoting a situation in which military personnel need to co-operate with civilian counterparts in order to fulfil their tasks. Understood in this way, of course, CIMIC can only exist within the military sphere. A representative from the Swedish Fellowship of Reconciliation, a Swedish Christian pacifist NGO, was critical of the way in which military participants had used the concept in Viking 03. ‘During the exercise,’ he argued, ‘a transformation of the concept took place, so that it seemed as if the civilian organizations were a part of CIMIC. We are not.’ A representative from the Red Cross added that within this organization, members had decided not to use CIMIC at all. ‘We talk about civil–military co-operation and by that, we mean something completely different [from the military]; and I think that this is an important distinction to make. On whose terms are we co-operating?’ Although the exercise was presented as transparent, many participants thus felt that it was difficult to get an overview of what happened. The elaborate technology, much celebrated in most descriptions of the project, was considered a nuisance rather than of help. It hindered ‘real’ co-operation, as the participants put it. True, the shared exercise vocabulary, perhaps most notable through the incessant use of the CIMIC concept, made interaction appear smooth. At the same time, however, it veiled disagreements that did not surface until after the exercise. That all military personnel seemed to act by the book added to the apparent smoothness of civil– military co-operation, but also made the exercise appear as mere performance. What was perhaps most remarkable during the civilian evaluation was that, although critique was made explicit, no one seemed hesitant towards the idea of arranging a mutual civil–military project in the first place. On the contrary, most critical remarks led to positive suggestions for future civil–military exercises. Like Emma from the Red Cross, most participants thus indeed seemed to like the ‘basic idea’. Criticism of the project premises on a more profound level was rare and tended to be misinterpreted as an attack not only on Viking 03, but on its alleged aims as well. This became obvious when, two weeks later, I participated in the military post-exercise discussion. On the first morning, before the workshop commenced, I had coffee together with two officers who had arrived early. When I asked about the exercise, one of them described it as ‘nothing short of a success’. ‘People are talking about Viking all over Europe right now,’ he said. According to these officers, observers from

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NATO had also been very pleased with the exercise performance. With some of the criticism from the civilian workshop in mind, I enquired whether they were also aware of any critical remarks. They were. A military unit at one of the remote sites had apparently been critical towards almost everything. But the officers assured me that such criticism did not matter, as long as NATO remained positive. They also mentioned that members from the Swedish Fellowship of Reconciliation had been critical, but offhandedly dismissed these participants as ‘not understanding what Viking is about’. Almost as a joke, they finally mentioned one Danish officer who apparently did not agree that Viking 03 had been a success. He has ‘lost it completely’, one of them sighed. ‘Nobody understands what he’s doing.’ Apart from constructive criticism aimed at developing the exercise concept, those who were critical towards the Viking 03 project were often rejected as not having understood what the project was about, or even, as in the example above, accused of being irrational. Audit culture, as Shore and Wright (2000, p. 62) point out, thus indeed relies both on hierarchical relationships and on coercive practices: ‘challenging the terms or reference is not an option’.

CONFLICT PREVENTIONISM AS AN EMERGENT FORM Conflict preventionism has thus opened up a new space for humanitarian action, where a set of novel issues, actor-alliances, and solutions are emerging. These are connected through a common focus on three interrelated issues: knowledge of ethnic conflicts; policy concerning prevention and intervention; and the institutionalization of peace. With conflict preventionism, in other words, violent conflicts are seen as urgent issues of international concern; it is presumed that such conflicts can and ought to be prevented or managed; and, importantly, peace is taken to be a universal value, which can be implemented through intervention. A range of miscellaneous actors – including governmental officials, military personnel, representatives from international institutions, and NGO activists – are becoming increasingly interconnected in mutual attempts to handle these issues. And new solutions are increasingly becoming institutionalized. Viking 03 exemplified these processes. The idea that ethnic conflicts constitute local problems of global concern was the central topic of the entire project. Through their collaborative efforts on this issue, civil and military participants gradually became increasingly interconnected. This interaction thus brought about new alliances – formal and informal, personal and organizational – as well as new trajectories for humanitarian action. The process

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of institutionalizing peace after violence had been halted in Bogaland (the fictitious humanitarian intervention did, not surprisingly, accomplish its main objective) was also discussed during the exercise – most notably by participating NGOs such as the International Legal Assistance Consortium. My aim in this chapter, however, has not been to evaluate the Viking 03 project. I neither appraise the performance of the project participants nor the quality of their model for managing violent conflicts. Instead, by approaching Viking 03 ethnographically, I aim to elucidate the wider phenomenon, conflict preventionism, in order to understand its workings: how a new ‘imaginary directionality’ (Wolf, 2001, p. 318) for engaging with the world is emerging. I thus focus on the constitutive features of conflict preventionism, that is, the processes through which certain issues, actors, and solutions are emerging as interconnected. These processes immediately become obscured if the focus is shifted away from the acts of problematization, and their prerequisites, towards solving the problems that are their results. This, however, was exactly what preoccupied the participants in Viking 03. Even critical remarks tended to be formulated in accordance with this discursive logic. Obviously, participants did not agree on how, exactly, civil–military co-operation ought to be structured in order to solve ethnic conflicts and implement peace. Yet everyone seemed to start from the assumption that this issue could be solved by specific actors and that it was important to establish policy for international approaches towards managing violent conflicts, understood in this way. The idea of conducting an international project where humanitarian NGOs and military personnel were participating as partners in a mutual effort towards a common goal was never thoroughly questioned. The spokesperson from SEMA, during the civilian evaluation, even asserted that the overarching aim of the workshop was ultimately to improve the Viking concept. Yet if conflict preventionism remains unproblematized it becomes difficult to criticize the Viking 03 project. This is because, from within a conflict preventionist logic, it is hard to separate the project from what it allegedly promoted: transparency, democracy, and peace. And if attempts at criticism were understood as obstructions to international attempts to promote transparency and prevent war, it is perhaps understandable that they became regarded as untoward. Policy and audit, as the example from the Viking 03 evaluation illustrated, cannot be separated. It is thus neither enough to evaluate critically the issues emphasized as important within Viking 03, nor to assess the performance of the project participants, or even to oppose the model suggested for managing violent conflicts. Such critique only re-establishes and affirms the conflict preventionist framework that established and made these issues, actors, and

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solutions detectable and auditable in the first place. Most critique formulated within Viking 03 thus remained encompassed within what it aimed to criticize.

CONCLUSION: ‘STOPPING TO THINK’ ‘Everything we feel and do is somehow oriented “lifeward”,’ wrote Robert Musil in his novel, The Man without Qualities (1996, p. 134), ‘and the least deviation away from this direction towards something beyond is difficult or alarming.’ Criticizing what is felt to be oriented ‘lifeward’ will thus undoubtedly appear untoward. ‘Stopping to think,’ as Musil concluded ironically, ‘is dangerous’. Yet at one stage in his novel, something unexpectedly seems to alter the apparent ‘lifewardness’ of things: The current and heartbeat that constantly flows through all the things in our surroundings had stopped for a moment. ‘I’m only fortuitous,’ Necessity leered. ‘Observed without prejudice, my face doesn’t look much different from a leper’s,’ Beauty confessed. Actually, it did not take much to produce this effect: a varnish had come off, a power of suggestion had lost its hold, a chain of habit, expectation, and tension had snapped; a fluid, mysterious equilibrium between feeling and world was upset for the space of a second. (Musil, 1996, p. 134)

Anthropologists have repeatedly tried to produce this effect. ‘We have, with no little success, sought to keep the world off balance,’ as Clifford Geertz (1984, p. 275) puts it: ‘pulling out rugs, upsetting tea tables, setting off firecrackers.’ Conflict preventionism comprises a set of transformations very much oriented ‘lifeward’. In this chapter, I have made an effort to explore and destabilize this emergent form; and the particular tea table that I have aimed to upset is one around which military officers, governmental officials, and representatives from international institutions and NGOs have recently gathered – apparently in mutual agreement about the way ahead. There are certainly conspicuous congruencies between conflict preventionism and particular forms of neoliberalism. The call for transparency is one example; the sensation of ‘lifewardness’ is another. There is no alternative, as it were, to neoliberal capitalism: ‘nothing else – no other ideology, no other economic system – seems even plausible. The primary question left to public policy is how to succeed in the “new” world order. Under its hegemony, the social is dissolved into the natural, the biological, the organic. And the political into the technical’ (Comaroff and Comaroff 2005, p. 129). The same could be said of conflict preventionism. How, then, could we think critically about these kinds of processes? According to Richard Sennett (2006, p. 12), ‘much of modern social reality

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is illegible to the people trying to make sense of it’. Arguably, this was also the case in Viking 03 – despite the policy of transparency. In fact, the ‘transparency’ of the project could rather be one of the explanations for this illegibility. It is a little bit like the drunken man who searched for his keys under a street lamp – not because he lost them there, but because it happened to be the only spot offering sufficient light. In Viking 03, the aim to improve co-operation for peace was unquestionably transparent, but what could possibly be said about it? And while the Bogaland scenario was open to scrutiny and to suggestions, the actual content did not really matter. What mattered was form. Yet while the content was entirely transparent, the form remained largely out of focus. Conflict preventionism as an emergent form thus mostly appears to be transparent in the sense, ‘functioning without the user being aware of its presence’. In order to stop to think critically about the Viking 03 project, then, it would be necessary to catch sight of these discursive workings and make them ‘open to public scrutiny’.

ACKNOWLEDGEMENTS Several people have read previous drafts of this chapter. I particularly want to thank Magnus Blomqvist, Christina Garsten, Ulf Hannerz, Monica Lindh de Montoya, Johan Lindquist, Erik Nilsson, and Charlotta Viktorin for critical comments and helpful suggestions.

NOTES 1.

2.

This chapter draws on research carried out under the auspices of Kosmopolit: Culture and Politics in Global Society, an inter-disciplinary project directed by Professor Ulf Hannerz. Based in the Department of Social Anthropology at Stockholm University, the project is supported by the Tercentenary Fund of the Bank of Sweden. In the past few years, a plethora of books and articles by commentators who seem largely in support of intervention has emerged. Recent examples include Marten (2004), O’Hanlon (2003), Lang (2003), Weiss (1999), and Wenger and Möckli (2003). Critique of interventionism is equally common. Among the most noteworthy examples are Chandler (2002), Chomsky (1999), Jokic (2003a), Orford (2003), Razack (2004), and Weissman (2004). This topic has spawned such heated debate that saying ‘humanitarian intervention’ in a room full of philosophers, legal scholars, and political scientists, as Robert Keohane remarks, has become ‘a little bit like crying “fire” in a crowded theatre: it can create a clear and present danger to everyone within earshot. Arguments burn fiercely – although fortunately not literally – on the subject’ (Keohane, 2003a, p. 1). Recent books, such as Chatterjee and Scheid (2003), Jokic (2003b), Keohane (2003b), Keren and Sylvan (2002), Mills and Brunner (2002), and Rambsbotham and Woodhouse (1996), show that commentators represent a range of disciplines, including anthropology, communication, ethics, geography, international relations, law, philosophy, political

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science, psychology, and public policy. Yet debates on interventionism are often strikingly similar in focus: the central question mostly pertains to whether, or under what conditions, intervention is justified – ethically, legally, or politically. 3. See, www.mil.se/viking 03/article.php?lang=E&id=9166, accessed 3 May 2006. 4. See The Concise Oxford Dictionary, Oxford: Oxford University Press, 2001. 5. The largest group of participants gathered at the main site in Enköping, Sweden. The remote sites were located in Zagreb in Croatia, Tartu in Estonia, Niinisalo in Finland, Curragh in Ireland, Constanta in Romania, and Tashkent in Uzbekistan. 6. The following 26 countries participated in Viking 03: Albania, Austria, Azerbaijan, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, the Republic of Macedonia, Norway, Poland, Rumania, Russia, Sweden, Switzerland, Turkey, Ukraine, the USA, and Uzbekistan. 7. These international institutions, government agencies, and non-governmental organizations took part in Viking 03. Amnesty International; International Committee of the Red Cross; International Legal Assistance Consortium; Save the Children; Swedish Fellowship of Reconciliation; Swedish Women’s Voluntary Defence Service; the Folke Bernadotte Academy; the National Association of Swedish Women’s Voluntary Motor Transport Corps; the Swedish Emergency Management Agency; the Swedish Police; the Swedish Power Grid; the Swedish Red Cross; the Swedish Rescue Services Agency; and the United Nations Refugee Agency. 8. Only NATO member states are allowed to organize PfP exercises. Since Sweden is not a member of NATO, Viking 03 could not formally be a PfP exercise. Yet, in practice, the project followed a PfP-model closely and was thus presented, on the website and elsewhere, as conducted ‘in the spirit of PfP’. 9. See www.nato.int/issues/PfP/index.html, accessed 28 March 2005. 10. See www.mil.se/viking 03/article.php?lang=E&id=8965, accessed 3 May 2006. 11. See, www.mil.se/viking 03/article.php?lang=E&id=9166, accessed 3 May 2006. 12. Neoliberalism is increasingly emerging as a central issue for anthropological scrutiny (see, for example, Gledhill, 2004; Gupta and Ferguson, 2005; Ong, 2006). Noteworthy examples of recent studies on a wide range of areas that converge on processes of neoliberalization include Lutz (2001, pp. 215–53) on the US military; Hayden (2003) on bioprospecting in Mexico; Elyachar (2005) on NGOs and economic development in Cairo; Dunn (2004) on privatization in Poland; and Ferguson (2006) on Africa and globalization. As Gledhill (2004, p. 342) puts it, ‘the diversity of neoliberal regimes is as striking as the family resemblances between them’. 13. Thomas Blom Hansen and Finn Stepputat call this the paradox of inadequacy and indispensability. ‘[W]hile the authority of the state is constantly questioned and functionally undermined, there are [also] growing pressures on states to confer full-fledged rights and entitlements on ever more citizens, to confer recognition and visibility on ever more institutions, movements, or organizations, and a growing demand on states from the so-called international community to address development problems effectively and to promote a “human rights culture” ’ (Hansen and Stepputat, 2001, p. 2). 14. ‘In ethnography,’ as Richard Sennett reminds us, ‘we are indeed less concerned with how coherent are the stories people tell us than with the effort of our subjects to make their experience cohere’ (Sennett, 2006, p. 188). Similarly, when approaching the Bogaland story, I am less concerned with whether it realistically resembled a conflict than with how the scenario functioned within the Viking 03 context.

REFERENCES Chandler, David (2002), From Kosovo to Kabul: Human Rights and International Intervention, London: Pluto Press.

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Chatterjee, Deen K. and Don E. Scheid (eds) (2003), Ethics and Foreign Intervention, Cambridge: Cambridge University Press. Chomsky, Noam (1999), The New Military Humanism: Lessons from Kosovo, London: Pluto Press. Cooper, Robert (2004), The Breaking of Nations: Order and Chaos in the Twentyfirst Century, London: Atlantic Books. Comaroff, Jean and John L. Comaroff (2005), ‘Naturing the nation: aliens, apocalypse, and the postcolonial state’, in Thomas Blom Hansen and Finn Stepputat (eds), Sovereign Bodies: Citizens, Migrants, and States in the Postcolonial World, Princeton, NJ: Princeton University Press, pp. 120–47. Duffield, Mark (2002), Global Governance and the New Wars: The Merging of Security and Development, London: Zed Books. Dunn, Elizabeth C. (2004), Privatizing Poland: Baby Food, Big Business, and the Remaking of Labor, Ithaca, NY: Cornell University Press. Elyachar, Julia (2005), Markets of Dispossession: NGOs, Economic Development, and the State in Cairo, Durham, NC: Duke University Press. Ferguson, James (2006), Global Shadows: Africa in the Neoliberal World Order, Durham, NC: Duke University Press. Fisher, William F. (1997), ‘Doing good? The politics and antipolitics of NGO practices’, Annual Review of Anthropology, 26, 439–64. Florini, Ann (2003), The Coming Democracy: New Rules for Running a New World, Washington, DC: Island Press. Garfinkel, Harold (1999), Studies in Ethnomethodology, Cambridge: Polity Press. Geertz, Clifford (1984), ‘Anti anti-relativism’, American Anthropologist, 86, 263–78. Gledhill, John (2004), ‘Neoliberalism’, in David Nugent and Joan Vincent (eds), A Companion to the Anthropology of Politics, Oxford: Blackwell, pp. 332–48. Grabher, Gernot (2004), ‘Temporary architectures of learning: knowledge governance in project ecologies’, Organization Studies, 25 (9), 1491–514. Gupta, Akhil and James Ferguson (2005), ‘Spatializing states: toward an ethnography of neoliberal governmentality’, in Jonathan Xavier Inda (ed.), Anthropologies of Modernity: Foucault, Governmentality, and Life Politics, Oxford: Blackwell, pp. 105–31. Hansen, Thomas Blom and Finn Stepputat (2001), ‘Introduction: states of imagination’, in Thomas Blom Hansen and Finn Stepputat (eds), States of Imagination: Ethnographic Explorations of the Postcolonial State, Durham, NC: Duke University Press, pp. 1–38. Hayden, Cori (2003), When Nature Goes Public: The Making and Unmaking of Bioprospecting in Mexico, Princeton, NJ: Princeton University Press. Jokic, Aleksandar (ed.) (2003a), Lessons of Kosovo: The Dangers of Humanitarian Intervention, Peterborough, ON: Broadview Press. Jokic, Aleksandar (ed.) (2003b), Humanitarian Intervention: Moral and Philosophical Issues, Peterborough, Ontario: Broadview Press. Kapferer, Bruce (2005), ‘New formations of power, the oligarchic-corporate state, and anthropological ideological discourse’, Anthropological Theory, 5 (5), 285–99. Keohane, Robert O. (2003a), ‘Introduction’, in Robert O. Keohane (ed.), Humanitarian Intervention: Ethical, Legal, and Political Dilemmas, Cambridge: Cambridge University Press, pp. 1–11. Keohane, Robert O. (ed.) (2003b), Humanitarian Intervention: Ethical, Legal, and Political Dilemmas, Cambridge: Cambridge University Press.

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Keren, Michael and Donald A. Sylvan (eds) (2002), International Intervention: Sovereignty versus Responsibility, London: Frank Cass. Lang, Anthony F. (ed.) (2003), Just Intervention, Washington, DC: Georgetown University Press. Lutz, Catherine (2001), Homefront: A Military City and the American 20th Century, Boston, MA: Beacon Press. Marten, Kimberly Zisk (2004), Enforcing the Peace: Learning from the Imperial Past, New York: Columbia University Press. McCarthy, James (2005), ‘Scale, sovereignty, and strategy in environmental governance’, Antipode, 37 (4), 731–53. Mills, Nicolaus and Kira Brunner (eds) (2002), The New Killing Fields: Massacre and the Politics of Intervention, New York: Basic Books. Moskos, Charles C., John Allen Williams and David R. Segal (eds) (2000), The Postmodern Military: Armed Forces after the Cold War, New York: Oxford University Press. Munro, Rolland (1999), ‘The cultural performance of control’, Organization Studies, 20 (4), 619–40. Musil, Robert (1996), The Man without Qualities, vol. 1, New York: Vintage International. O’Hanlon, Michael E. (2003), Expanding Global Military Capacity for Humanitarian Intervention, Washington, DC: Brookings Institution Press. Ong, Aihwa (2006), Neoliberalism as Exception: Mutations in Citizenship and Sovereignty, Durham, NC: Duke University Press. Orford, Anne (2003), Reading Humanitarian Intervention: Human Rights and the Use of Force in International Law, Cambridge: Cambridge University Press. Power, Michael (1997), The Audit Society: Rituals of Verification, Oxford: Oxford University Press. Power, Michael (2003), ‘Auditing and the production of legitimacy’, Accounting, Organizations and Society, 28, 379–94. Ramsbotham, Oliver and Tom Woodhouse (1996), Humanitarian Intervention in Contemporary Conflict: A Reconceptualization, Cambridge: Polity Press. Razack, Sherene H. (2004), Dark Threats and White Knights: The Somalia Affair, Peacekeeping, and the New Imperialism, Toronto, ON: University Press of Toronto. Sennett, Richard (2006), The Culture of the New Capitalism, New Haven, CT: Yale University Press. Shore, Cris and Susan Wright (2000), ‘Coercive accountability: the rise of audit culture in higher education’, in Marilyn Strathern (ed.), Audit Cultures: Anhropological Studies in Accountability, Ethics, and the Academy, London: Routledge, pp. 57–89. Strathern, Marilyn (ed.) (2000a), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge. Strathern, Marilyn (2000b), ‘Accountability . . . and ethnography’, in Marilyn Strathern (ed.), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge, pp. 279–304. Viktorin, Mattias (2005), ‘The new military: from national defence and warfighting to international intervention and peacekeeping’, Statsvetenskaplig Tidskrift, 107 (3), 259–77. Weiss, Thomas G. (1999), Miltiary–Civilian Interactions: Intervening in Humanitarian Crises, New York: Rowman and Littlefield.

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Weissman, Fabrice (ed.) (2004), In the Shadow of ‘Just Wars’: Violence, Politics, and Humanitarian Action, Ithaca, NY: Cornell University Press. Wenger, Andreas and Daniel Möckli (2003), Conflict Prevention: The Untapped Potential of the Business Sector, Boulder, CO: Lynne Rienner. White, Hayden (1987), The Content of the Form: Narrative Discourse and Historical Representation, Baltimore, MD: Johns Hopkins University Press. Wolf, Eric R. (2001), Pathways of Power: Building an Anthropology of the Modern World, Berkeley, CA: University of California Press.

13.

Transparency as tool and weapon: the case of the Venezuelan presidential recall referendum Miguel Montoya

In August of 2004, Venezuela held a recall referendum in which citizens voted on whether or not to remove President Hugo Chávez from his post. This chapter discusses the events leading up to and following the referendum, which was the upshot of a lengthy struggle between the government and its supporters, or oficialistas, and the opposition to the government, a diverse movement composed of civil society, political parties and other associations such as labour unions.1 The Venezuelan opposition began to organize and grow in strength as a movement beginning in early 2001, as part of the population, primarily the middle class, began to feel that government policies were becoming increasingly antagonistic to democratic freedoms and the market economy.2 I will discuss the ideas of transparency and opacity, how these were used during the referendum, and the consequences for political processes in the country. West and Sanders point out that transparency is bound up with a series of regimens or ideological positions such as fiscal accountability, free trade, the rule of law, democracy, a free press and human rights (2003, p. 12). Indeed, it has long been a cornerstone of a wide array of processes and institutions nearly unquestioned in democratic societies, and has only more recently become a subject of closer academic and public examination. As citizens’ participation in electoral politics is decreasing and alternative modes of exerting power and influence over political actors and the environment are being sought, the transparency of public and private production and decision-making processes can become an entry point for such alternative exercise of power (as Abram notes in this volume; see also Micheletti, 2004). The more information that is made public about processes and the decisions that affect them, the more people are empowered to become involved in the future of their communities and in world developments. Such involvement can be seen by those in power as both a resource and as a threat. The increase in public involvement in new arenas 260

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also has much to do with the growth of the media and new medial forms, and to a degree, with the availability of ‘free time’ – citizens’ participation in government affairs is less likely where people spend long hours at hard labour. This chapter, however, centres on election processes, and transparency is considered a crucial facet of electoral procedures, allowing for greater confidence in the outcome of the election. Coles has written about the series of elections held in Bosnia and Herzegovina after the end of the war in 1995, and shown how difficult it can be to monitor elections and guarantee a transparent procedure to the satisfaction of all. As she notes, elections are largely about organization and techniques; she likens them to scientific laboratories that produce democracy. Central to this concept is the way in which electoral techniques create facts, knowledge and order; while at the same time, democracy and elections are ‘embedded in social practices, modes of knowledge, and artefacts’ – they are technical, cultural and social enactments (Coles, 2004, p. 553).3 When the laboratory of the democracy is not working well, or there is reason to suspect that the apparatus will be tampered with, it is possible to call in referees, or international observers. In the Venezuelan referendum process the Organization of American States (OAS) and the Carter Center, both of which have produced complete reports on the proceedings and made recommendations, agreed that although the referendum process was burdened with inconsistencies and ad hoc decisions, the referendum results did reflect the will of the Venezuelan people.4 Audit is an important component of transparency. Michael Power (1997) and Marilyn Strathern (2000) have shown how audit is increasingly used in state processes as a measure for both participation and control. In elections and referendums, audit of voting procedures can be vital to the credibility of results. However, very stringent procedures can also interfere with rights and make it difficult for citizens to manifest their will – there must be a balance between audit and trust in order to carry out elections. As Shore and Wright note in their discussion of coercive accountability in the British university system, the relationships that audit gives rise to are both hierarchical and paternalistic, and, following Foucault, the audited are objects of information, never subjects in communication (Foucault 1977, p. 200; Shore and Wright, 2000, p. 59). Thus while audit procedures are designed to produce openness, they may also close off an open flow of communication, ultimately resulting in incomplete or false information. It is important to note that electoral procedures and democracy as an ideal are built on both transparency and secrecy, on both the open and the hidden, and that these are highly interlinked. While government organization and administration should be open to monitoring by a breadth of civil

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and political institutions and groups, democratic government is constructed through the exercise of the secret vote – and societies without the secret vote cannot be considered democratic (Tollin and Törnqvist, 2003).5 Democracy contains a number of arenas for expression and participation, some where transparency is required, and some where it is unwelcome. In addition to secret elections democracies may use closed hearings, sequestered juries and secret jury deliberations, as well as secret intelligence services, and classified documents. What is to be open, and what is to be veiled is carefully regulated, and unveiling hidden arenas arouses as much ethical outrage as concealing that which is to be open. The presidential recall referendum that took place in Venezuela in 2003–04 consisted of a drawn-out process in which the limits between visible and hidden democratic spaces were consistently manipulated and redefined, and where these spaces, which make up the very substance of transparency, were used in the political struggle to gain or maintain power in a way that seriously undermined the credibility of democracy. Below, I give a brief and general background to the economic and political situation in the country, then go on to discuss the referendum and how the concept of transparency was interpreted, used and misused.

BACKGROUND The roots of Venezuelan democracy date back to the 1920s when prominent intellectuals and students fought against the Gómez dictatorship (1908–35). At the time, the country was emerging from its long history as an exporter of agricultural products, to become one of the major petroleumexporting countries in the world.6 As Coronil notes (1997, pp. 90–105), with the death of dictator Juan Vicente Gómez in the end of 1935, an opening for change was quickly seized by emerging leaders, and the national discourse soon came to focus on the idea of the nation as a democracy, which would distribute the national income from oil exports for the benefit of all citizens. Key in the development of this set of ideas was an article entitled ‘Money, money, money’ by the intellectual Miguel Otero Silva, in which he reminded the public that funds were necessary to finance plans for national reform, and that these should come from the nationalization of Gómez’ enormous personal wealth and the increased taxation of petroleum exploitation.7 Otero Silva also pointed out, however, that obtaining funding was not sufficient, as state officials often robbed the nation; and he called for the democratization of the state and the placement of strict controls on public officials. He defined this mix of political rights and oil-financed reform as a ‘democratic revolution’ (Coronil, 1997,

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pp. 94–5). This was one of the first calls for political and economic transparency in Venezuela’s modern history. Since 1958 Venezuela has been democratic, with a multitude of small political parties and two major parties that tended to alternate in power with the elections, Acción Democrática (AD, Social Democrat), and Comité de Organización Política Electoral Independiente (COPEI, Christian Democrat).8 Elections were held every five years, and a president could not serve consecutive terms, but had to wait 10 years before seeking re-election. Oil revenues served as the basis for the modernization of the democratic state. Elected governments expanded the health and education sectors and they established a large public administration. Jobs and benefits were often tied to political affiliation, however, and with time the system was increasingly perceived as corrupt. Government spending was tightly linked with the international oil prices that determined income, leading to borrowing and spending sprees that benefited the more well-to-do during income booms, followed by neo-liberal austerity measures which undercut the middle class and further eroded the living standards of the poor when energy prices fell. After the economic crises and devaluations that began in the early 1980s, living standards dropped quickly. By 1997, roughly 58 per cent of Venezuelans lived in poverty, and 29.9 per cent of these in critical poverty (España, 2006, p. 81).

ENTER HUGO CHÁVEZ Economic polarization and decline, the corruption of politicians, as well as a turn towards neo-liberalism as a remedy for earlier mismanagement were critical factors in the political turbulence that led to the rise of a new actor on the political scene, Lieutanant Colonel Hugo Chávez. A former paratrooper, Chávez had led the unsuccessful coup against the AD government of Carlos Andrés Pérez in February 1992. He was tried and imprisoned but given a presidential pardon by Rafael Caldera (COPEI) two years later. He and his supporters formed a new political party, Movimiento Quinta República (Fifth Republican Movement, known as MVR), and in the end of 1998, Venezuelans broke with the discredited two-party system by electing Chávez by a wide margin. A broad sector of the population including the middle class voted for him. People had lost faith in the traditional political parties and were angry about the government’s apparent indifference to the steady deterioration in the standard of living; they were anxious for change, for an end to corruption and the deterioration of the economic and political situation that had marked the 1990s. They wanted jobs, effective public institutions and a better future.

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Upon taking office, however, Chávez did little to aid economic recovery, focusing instead on revamping the country’s political infrastructure. Within a few months he had pushed through a referendum on a constituent assembly, held in April of 1999, in which 92 per cent of those voting supported constitutional reform and agreed to the establishment of a new constituent assembly to draft the document.9 The National Constituent Assembly was elected three months later, and by the end of the year produced a new constitution which among other things changed the name of the country to the Bolivarian Republic of Venezuela (in honour of independence leader Simón Bolívar), extended the term of the president by one year, allowed for his re-election, strengthened the military, created a single chamber of parliament (the National Assembly) to replace the Senate and Chamber of Deputies, and strengthened state control over the oil industry. While the opposition saw the changes as part of an authoritarian trend in the new administration, and as allowing excessive governmental meddling in the economy, Chávez insisted that the reform would strengthen democracy, improve human rights, allow a more equal distribution of wealth and reduce corruption.10 Over 70 per cent of those voting ratified the new constitution in December 1999, although less than half of the registered voters turned out to vote.11 The new constitution, formed largely along lines Chávez had previously staked out, was based on participative, rather than representative democracy.12 Referendums were to be held on major issues facing the nation. Provision was also made for the possibility of recalling elected representatives, including the president, at midterm.13 After the ratification of the new constitution, with the ongoing consolidation of power in the hands of Chávez, the political scene in Venezuela changed. The traditional major political parties, AD and COPEI, had been discredited, and a number of smaller parties began to move into the spotlight, as well as civil associations, some of which began to appear to have political aspirations. As the new government sought fast-track powers to implement new measures it began to meet increasing resistance by those opposed to the sweeping changes being announced and concerned about civil liberties. In this respect, democracy was strengthened: different channels for participating in the political discourse materialized in the face of a perceived threat, and public demonstration took on new importance. The privately owned media, owned by Venezuelan business interests, presented the opposition’s view of Venezuelan politics, extensively covering antigovernment protest. However, they were also bound by law to broadcast presidential speeches and events. In the beginning of 2001 an educational initiative (Decree 1011, which would have provided for the scrutiny of public and private educators by government-appointed supervisors who could recommend the dismissal of

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teachers) was particularly opposed by the middle class. After a series of strikes by schoolteachers, citizens opposing the proposal staged the first of what were to be many huge public rallies in central Caracas. Mobilization against the bill engaged many who feared the indoctrination of their children, and marked the beginning of a concerted effort of the opposition to work towards unseating Chávez.14 As Decree 1011 was dropped and the government went on to confront other groups such as the church, trade unions, the media and private business, the education controversy dropped from view; but the issue had served to mobilize the middle class of the country. During 2001 a series of laws were passed using fast-track powers, updating, and in some cases making significant changes in the legal structure of the nation, including reform of the oil industry, land laws, and banking and microfinance law. Civil society organizations and the opposition protested because the laws were being passed without consultation with stakeholders and the community, thereby violating the Constitution; and because some of the laws, including those regulating land and private property, were partly in conflict with the rights decreed in the Constitution. In February of 2002, a group of political parties, civil society associations and social sectors opposed to Chávez’s politics formally united in an umbrella association known as the ‘Coordinadora Democrática’ (CD) to build a united opposition front. Their goal was to seek a referendum on the presidency, and to hold elections once Chávez resigned (Villegas Poljak, 2002). The following months were turbulent ones, marked by a series of huge public protests and general strikes, the violence of oficialistas against protesters, a short-lived coup attempt, and the resignation of some high-ranking members of the military. Petróleos de Venezuela S.A. (PDVSA, the national oil company), soon became a central point of conflict as Chávez’s attempts to gain political control of the institution was resisted by its management and workers alike. The opposition began to press the government for an early referendum on his mandate, and opposition volunteers collected signatures for such a referendum which they presented to the Consejo Nacional Electoral (CNE), the national electoral council, on 4 November 2002. This first initiative, although approved by the country’s electoral authorities at the time, was later formally annulled by the Supreme Court. Chávez fought the referendum on the grounds that it could not be legally held before he had served half of his term. To exert pressure on the government, the opposition called for another general strike, the fourth within a year, starting on 2 December 2002. Prolonged ‘indefinitely’ in an attempt to force Chávez to resign, this general strike lasted for nine weeks and included the oil industry, with the country losing an estimated $70 million per day in oil revenues.15 Strikers managed to stop oil exports, resulting in severe gasoline shortages in addition to lost income. The government retaliated by firing a total of nearly

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18 000 petroleum workers and management, pulling in previously retired local employees as well as foreign oil crews, and temporarily importing gasoline from Brazil.16 As the conflict dragged on, there were attempts at mediation by the international community. Former US President Jimmy Carter of the Carter Center suggested that either the country could vote on a constitutional amendment that would allow early elections, cutting the presidential term from the current six years, or that the two sides could agree to wait until August, when the constitution allowed for a binding referendum on the president’s mandate. It eventually became apparent that Chávez would not resign despite the great economic damage being done by the strike and it tapered off, as the government was able to re-establish oil exports and businesses could not afford to stay closed indefinitely – in the barrios, or populous neighbourhoods where most Venezuelans live, many shops and businesses had stayed open. When the strike ended, the Coordinadora Democrática was demoralized. They had spent much energy to no avail. Despite their substantial popular support and a huge economic toll, the government had not ‘listened’ to or negotiated with the opposition, and political life remained highly polarized.

THE RECALL REFERENDUM After the failure of the national strike the opposition began to focus its energy on making a national referendum on Chávez’s mandate possible. In May of 2003, through the efforts of César Gavíria, then secretary-general of the OAS, the United Nations Development Programme (UNDP) and the Carter Center, the government and the opposition signed a document designed to put an end to their destructive conflicts and to open the way for the recall referendum as stipulated in the constitution (López Maya, 2005, p. 285). Once again the opposition began to collect signatures, this time, more formally organized in a movement called ‘El Firmazo’ (‘firma’ means signature in Spanish). The National Assembly, where Chávez held a small majority, had the obligation of appointing members to serve on a new national electoral council (CNE) – the body required to decide on the validity of the signatures, the date of the referendum, and whether or not to allow monitoring by the international community – the first steps towards holding a referendum. Unable to reach an agreement on candidates, the National Assembly had still not appointed the members of the CNE by the 4 of August 2003, and the Supreme Court ruled that if they did not do so within 10 days, the court would appoint the CNE. The head of the majority government faction in the National Assembly declared that they would

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not accept a CNE appointed by the court, and that such a move would jeopardize the governability and stability of the country, as they would call supporters out in the streets (Livingston, 2003). In the end, however, the council was appointed by the court. Giusti (2005, p. 198) points out that the controversy that developed over the CNE in the National Assembly served the purpose of delaying the referendum. At this time, in the summer of 2003, the popularity of the government was on the wane, and the opposition rated at least equal to the government in opinion polls. Aware of the situation, the government initiated a series of missiones, government educational and work programmes which supported the poorer sector of the population. Begun in the latter half of 2003, these programmes were instrumental in bolstering the government’s popularity ratings (Peñaloza, 2006, p. 10).

TWO PLAYERS – THE CNE AND SÚMATE This court-appointed electoral council came to play a major role in the referendum process, and became a source of considerable conflict. The CNE website describes its role: The National Electoral Council is the regent of electoral power, responsible for the transparency of electoral processes and referendums; it guarantees Venezuelans the efficient organization of all the electoral acts that are carried out in the country, and particularly the clarity, equality, and credibility of these processes and their results so as to elevate and sustain the prestige of the electoral institution. Its noble aim is to maintain a love of democracy alive in citizens, as it is the most adequate system for peaceful coexistence in our society.17

The five members of the council were thus to be the organizers, administrators and supervisors of the enactment of democracy, but the appointees of this council were unfortunately far from being perceived as neutral by the public. Three of the representatives were considered to be pro-government, and the other two as favouring the opposition; indeed, several crucial pronouncements were signed by the same three members, with the same two dissenting. As the CNE was slow in deciding on some issues, and consistently made stringent demands on the opposition regarding documentation, the council came to be perceived as against the referendum, and thus against the exercise of a democratic right. The Venezuelan opposition was at this point made up of diverse social groups and sectors: military dissidents, formal labour organizations, the middle class, traditional and some new political parties, NGOs, many leaders of the Catholic Church, and business and trade organizations.

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Súmate, a non-profit, civil society organization made up of 10 000 volunteers early on came to play a pioneering role in organizing the collection of proreferendum signatures and maintained a high public profile throughout the procedure. Their strength was their technological ability to organize the complex logistics of collecting and registering signatures throughout the country, and they came to be the opposing player to the CNE. Founded in 2002 to help Venezuelans claim their constitutional rights, the organization had through ‘El Firmazo’ gathered more than 3.2 million signatures requesting a national referendum on Chávez’s presidency and presented them to the CNE on the 20 of August in 2003. The signatures were rejected on 12 September on the grounds that they had been collected extemporaneously, without the supervision and regulation of the CNE, before the mid-point of Chávez’s term, and had the character of a proclamation, rather than being a formal request directed towards the CNE. Thus they did not fulfil the formal requirements stipulated in the Constitution.18 The opposition protested this rejection of the signatures, but without results. Two weeks later the CNE unveiled the rules that were to govern the referendum process. Limiting the time span allowed for collecting the signatures to four days and stipulating numerous requirements, the regulations were felt by the opposition to be limiting, cumbersome and excessively bureaucratic. The CNE considered them necessary to guarantee the impartiality, transparency, alacrity, dependability and timeliness of the signatures. The forms to collect signatures were to contain the full name and post of the official to be recalled and the date in which she or he took possession of office, as well as the legible full name, identity card number, date of birth, electoral inscription post, original signature and fingerprint of the signatory. At the end of each day a document had to be written indicating the place and date of the collection of signatures, the opening and closing hours of collection, the number of the forms and their serial numbers, the number of signatures collected that day, and the personal information of the collectors and the observers as well as their signatures. Three copies of the document were to be distributed, to the signature collector and each of the two observers, and the original was to be remitted to the CNE. Collection agents were responsible for the signature forms, and had to return unused forms to the CNE. Only 1600 signing centres were authorized, and opening and closing hours had to be strictly observed.

THE REAFIRMAZO AND PLANILLAS PLANAS The opposition faced the task of collecting at least 2.4 million signatures. Government politicians said that they would not be able to do it. In one of

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his speeches Chávez pointed out that whoever signed against him would ‘be registered for history’, because they would have to write their first and last names, identification card number and include their fingerprint as well as their signature. With a campaign called ‘El Reafirmazo’, or ‘Sign Again’, Súmate mobilized to recollect the necessary signatures following the regulations set up by the CNE between the 29 of November and the 2 of December. Signing centres were set up in schools, parks and on street corners, and mobile units were organized to collect signatures from those who could not get to centres. International observers – from the Carter Center and the OAS – monitored the proceedings, as well as government supporters. While the opposition was convinced that they could meet the rigorous demands, Chávez was very sceptical. ‘The opposition should know by now that the possibility of them collecting the signatures is almost zero,’ he told a press conference. ‘If the signatures are collected in a transparent and legal way . . . then let’s go to a referendum. If they beat me in the referendum, then I’ll leave.’19 The collection of signatures went off without any major incidents, but Chávez accused the opposition of committing a ‘megafraud’ – claiming that some businesses had forced workers to sign the petition, and that other people had signed several times. The international observers such as the OAS rejected these allegations. The opposition claimed to have collected over 3.4 million signatures – over a million more than necessary – and these were turned over to the CNE for verification. In this signing ritual, the signatories were ‘making visible’ their desire for a new government, a chance to revoke the current presidency. The regulations were designed to limit participation by the limited time span allowed, but also to verify the identity of the signatories. While many of those who signed probably believed that their signatures were secret, as their votes always had been, the complete list of ‘those who signed against the president’ was compiled by the CNE and subsequently released to Luis Tascón, a member of the National Assembly who published the list on the Internet. The electronic list was also circulated among public institutions, resulting in numerous signatories with government jobs being fired explicitly for signing. The list was also checked for the names of prospective new government employees.20 As West indicates, modern states control their citizens more via controlling access to movement and economic activities through identity documents than through the use of legalized violence (West, 2003, p. 101; see also Torpey, 1998, and Scott, 1998). Ana Julia Jatar (2006, p. 78) has documented the repercussions suffered by signatories who faced serious political discrimination and exclusion due to the Tascón blacklist, losing jobs, and their legally mandated social benefits and pensions.

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‘Making visible’ or transparent was, then, a major strategy utilized by both the government and the opposition, in the form of using signatures to validate political arguments or punish dissidents’ political commitment, and in the form of the physical mobilization of huge numbers of supporters in mass demonstrations that succeeded each other throughout the months of the referendum process. Opposition leaders would stage a protest, and it would be followed on the next day by a counter protest by oficialistas – or they would organize a pro-government rally on the day before a planned opposition gathering. It was not enough to offer support via signatures or votes – political identity and allegiance had to be manifested corporally as well. While the opposition massed numbers to display the massive spontaneous opinion against the government, oficialistas were widely said to be obliged to attend pro-Chávez rallies if they were to keep their jobs – and reports also circulated that they were paid to go to rallies, and bussed in from nearby cities. The CNE was expected to announce whether the opposition had collected the minimum valid signatures needed in January of 2004, but there was a lengthy delay in the review of the signatures, to which the opposition reacted with street demonstrations and allegations that the CNE was biased and stalling proceedings to favour the government – because if a referendum was held after the end of August and the vote went against Chávez, he would be succeeded by the vice-president, while an earlier vote would result in new elections. Opposition demonstrations were countered anew by demonstrations in support of the government, and as weeks dragged on without a verdict, the situation in the country became very tense. Finally, on 2 March 2004, the CNE announced that it only could verify 1.8 million signatures, but that another 870 000 were disputed because many of the forms were filled out in similar handwriting (the so-called planillas planas, or ‘form signatures’).21 The council announced that it would publish lists of the disputed signatures, and would set up 2600 posts around the country where people on the lists could revalidate their signature. The Carter Center and the OAS supported this process of revalidation, saying that the scrutiny of signatures had been fair and transparent, although they disagreed with some of the conclusions. They believed that the collection of signatures had contained sufficient methods of control, such as (1) the use of special paper in the forms, (2) the inclusion of the serial numbers of the forms in the acts, (3) the identification of signatories through their signature and fingerprint, (4) the physical verification of the forms, including the names of citizens with the information in the permanent electoral register, (5) the examination of the acts to verify that the forms were properly accounted for, and (6) the presence of witnesses from both sides, as well as personnel designated and trained by the CNE.

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Numerous forms had the same handwriting (except for the signature) because the signatories had not entered their own personal details, allowing organizers to do it for them, but Carter and the OAS reasoned that these forms did not need to be revalidated, but could be accepted in good faith. Yet the CNE demanded revalidation. The announcement met with outrage from the opposition. They protested that such a procedure was not in the original rules for the referendum, and said that there would be no ‘negotiation’ of the signatures22 and that the rules could not be changed in retrospect. They pointed out that nowhere in the regulations was there any indication that forms had to be filled out entirely in the handwriting of the signatory. The opposition felt that the CNE was simply looking for an excuse to deny that there were enough signatures to call a referendum, and that there was no way they could make their voices heard by working through the system. They appealed to the Supreme Court, alleging that pro-Chávez officials at the CNE were intentionally blocking their campaign by unfair means; and the Supreme Court overturned the CNE ruling. But this ruling by the electoral chamber of the Supreme Court could be overturned by the constitutional chamber, and the administration was expected to appeal.23 Government officials argued that as the process in question was not part of an election, but a referendum, which is a constitutional right, it should be ruled on by the constitutional chamber of the Supreme Court, and not the electoral chamber. Eventually the opposition was obliged to accept the revalidation process. The CNE finally validated 1 910 965 signatures, and rejected 375 241 signatures because they apparently belonged to people who were dead or not registered on the electoral roll. That left another 1 192 914 signatures that had neither been authenticated nor rejected. The CNE demanded that these signatures be revalidated over a five-day period, and then counted over the following three days. Súmate played an important role in this revalidation procedure; as they had information about every signatory and were able to post information about who had to revalidate their signature. This information was also available on the CNEs website and via a telephone hotline. Súmate co-ordinated the revalidation, and they expressed concern, for example, that over a third of the signatories that needed to revalidate their signatures would not be able to do so because too few computers were available at the validation centres,24 and were successful in increasing the number of computers. The Coordinadora Democrática, however, wanted the votes revalidated manually, not trusting the voting machines. The CNE’s questioning of over a million signatures after the third nationwide collection of names had created a massive opinion that the government was going to stop the referendum in any way possible, and fear of fraud, manipulation and intimidation were

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widespread. At one point the CNE said that signatories with valid signatures who had second thoughts could go to the centres and ask for their signature to be removed from the lists. This was countered by the CD, who insisted that in that case, they should be able to collect more signatures during the revalidation, as well (Martínez, 2004). The revalidation process was successfully carried out without significant problems, however, and on 8 June 2004, the CNE announced that the opponents of President Chávez had gathered more than enough signatures to trigger a referendum on his term in office. The referendum vote was set for the 15 of August.

VOTING: AUGUST 2004 The period leading up to the vote was marked by increasing mistrust on both sides. The opposition alliance was particularly concerned about the voting machines to be used. The CNE had opted for the use of electronic voting machines despite their protests that manual voting was more dependable and transparent – and had signed a contract with Smartmatic, a company recently formed and registered in Florida, owned by three Venezuelans. The company was an intermediary, the actual supplier of machines being Olivetti, a company with limited experience in the field. The opposition feared that the machines would be rigged, and speculated about complicity between the government, Smartmatic, Olivetti and the CNE (Ochoa Teran, 2004). The government refused to budge on their choice of company, however. According to Alberto Quiros, a negotiator for the opposition, a set of written rules sentenced by the Supreme Tribunal of Justice was established just before the referendum took place. These rules legally obligated both sides to submit to a proper random audit of 1 per cent of the votes, and a joint review of the results before they were made public.25 Of a total of just over 14 million registered voters, 30 per cent abstained in the 15 August referendum. Nearly 60 per cent of those that did go to the polls voted to keep Chávez as president, while 40 per cent (close to 4 million voters) chose to remove him. Thus Chávez obtained close to 6 million ballots – a resounding victory.26 However, the legal obligations to audit and review the electoral results were violated by the CNE, which did not allow the opposition to monitor the auditing process, which was not done randomly as stipulated, but according to the CNE’s own choice – and the CD was not allowed to review the results before they were announced. The results of the vote came as a complete surprise to the opposition coalition, and at first they refused to accept them. Polls held just prior to elections showed the two sides to be very closely matched, and exit polls had shown a

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60–40 majority for the opposition. In a tense meeting with the CNE almost two weeks after the referendum, the CD alleged that the election was plagued with irregularities such as abrupt changes in regional electoral authorities and witnesses, and failure to comply with the audit that both sides had agreed would take place immediately after the election – this audit was not done in the way originally set out. The spokesman for the CD charged that the military electoral protection ‘Plan República’ and the CNE refused to carry out this vote check according to the pre-agreed parameters. Thus, the CD rejected the electoral results, and also pointed out that upcoming elections were not adequately guaranteed, given the lack of transparency and reliability of the CNE. They called for changes on its board of directors, and pointed out that César Gavíria, then Secretary General of the OAS, had also claimed that the CNE was not impartial (Méndez, 2004). On the 26 of August, however, the OAS declared its complete satisfaction with the referendum process, and recognized President Chávez’s successful achievement of ratification for his term of office.27 Nor did the one per cent audit of the votes by the Carter Center find any reason to believe that fraud had taken place.28 The CD continued to contest the referendum results despite the opinion of international observers. Many opposition supporters who had fought very hard for the referendum were bitterly disappointed, however, that their leaders did not take to the streets and forcefully demand a recount of the votes. Rather, the dispute became a battle among ‘experts’ in the mass media where nothing ultimately could be proven. A commission of university professors and experts that investigated the referendum process claimed that there was ample evidence of fraud, noting that voting machines had been connected to each other and that CANTV, the national telephone company, had records of bi-directional communication between the machines and the counting centres from the morning of voting; communication which took place before votes were printed out. Another irregularity cited by the group was that in 100 population centres there had been as many votes as residents, although some residents were under age 18; and in one area more people had voted than were residents. The team also drew attention to an unusual 5 per cent increase in the percentage of registered voters to population. While this percentage had been quite stable at 48 per cent since 1958, for the referendum vote the percentage stood at 53 per cent registered voters to population, and a record 1 800 000 people were registered as voters in the two months before the elections – a period in which according to national law, the electoral rolls are not to be modified. An investigation into the centres issuing national identity cards was requested.29 The nationalization of foreigners, primarily Colombians, had been part of the government strategy prior to the referendum: over 200 000 people were nationalized in the space of six weeks, and Chávez promised

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1 million more nationalizations before the end of the year. This was a procedure that the opposition considered to be electoral fraud.30 Súmate carried out an analysis of voting patterns and concluded that there was a 99 per cent chance that there had been manipulation of the vote, that the sample of votes that had been audited had not been a random sample, and that the fraud had been carried out by manipulating all of the machines in some centres. The analysis, conducted by economists Ricardo Haussman (of Harvard University) and Roberto Rigobon (of MIT) led Súmate to call for an audit of all paper receipts of the ballots cast, and to request access to a voting machine from Smartmatic company.31 All of the accusations of the opposition were rejected by the government, which refused to cooperate in any further auditing of results, citing the fact that neither the OAS nor the Carter Center had questioned the legitimacy of the vote. Months later, a group of experts gathered by the Carter Center rejected the results of the Súmate report on the grounds that there were methodological errors, and that the report failed to demonstrate fraud.32 On the first anniversary of the vote, the CNE published a book about the referendum process, celebrating the democratic way in which it had taken place. At the time the president of the CNE noted that accusations of fraud had never been proven, and described the referendum process as a moment in which the decision to ratify or not ratify the presidential mandate was left in the hands of the public, in the midst of a tense political climate in which the democratic system was at risk, and citizens opted to activate the constitutional dictates and solve their difficulties via participation.

He added that this day ‘significantly changed Venezuelan society because it showed the whole world its democratic will’, and he once again emphasized that international observers ratified the results. In the same interview, he discussed the (then upcoming) 2005 elections to the National Assembly, and said that they would have even greater guarantees of transparency, because television screens would be placed in public places, showing the flow of voters in the voting centers throughout the day.33 Despite the rejection of the outcome of the referendum by the opposition, no further independent investigation has been made by the government.

TRANSPARENCY IN A NON-TRANSPARENT ENVIRONMENT: POSTSCRIPT AND CONCLUSION Certainly the case presented in this chapter is an ambiguous demonstration of transparency; indeed, Venezuela could also serve as an example of ‘what not to do’ to achieve transparency in government. The gradual reduction

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in the separation of powers, the increasing centralization, as well as more recent legislation curbing protest and the press are some of the indications that the country is moving towards less, rather than more, transparency.34 But the case of the referendum leads us to ask what transparency consists of, what the preconditions for its existence might be. If one considers the chain of events of the referendum, there are a number of counts on which transparency could have been much improved. The first is the appointment of the members of the CNE, which the opposition felt favoured the government from the start. Consultation and negotiation regarding the criteria that members should fulfil, or who the members were to be, might have avoided the polarization evident on the council and the suspicion with which it was regarded by the opposition. In a report issued soon after the referendum was held, The Carter Center noted that the frequent 3–2 decision-making votes within the CNE never favoured the opposition (indicating a likely pro-government split), and that rules and procedures were handed down from the CNE to the opposition with no space for negotiation, until the episode of the planillas planas, when, at the urging of the observers, the CNE did begin to negotiate with the opposition and communication gradually improved. The Carter Center report also indicates that relations within the council were less than cordial; that the members did not communicate well with each other, and that they often communicated via the media rather than directly, which leads one to believe that it had problems operating efficiently.35 The CNE that was appointed by the court at the outset of the referendum process was new at its job, and the referendum was the first of its kind – thus there were no established procedures, which were set up in an ad hoc manner and revised when needed. Electoral workers lacked sufficient training, and in general there were many irregularities and delays. It appears that the political pressure on the organization negatively influenced its ability to carry out the task at hand, and compromised its neutrality. In addition to showing the need to examine the workings of the national institutions that guarantee transparency, one may here also mention the need to scrutinize the power held by the institutions that serve as ‘international observers’. Both the OAS and the Carter Center were openly questioned by people who sympathized with the opposition (if not formally by opposition organizations) as they backed up the government’s announcement of election results, and it was widely speculated that they were under pressure to produce a political solution for Venezuela that would provide needed stability and keep the oil exports flowing. Yet once the observers had pronounced on the elections, the opposition had little hope of having their further doubts examined, and the many voters who believed that fraud had taken place remained highly sceptical of both the observers and the election results.

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The fact that the opposition made the effort to gather signatures on three occasions only to have them rejected for a variety of reasons and have to start all over again, finally following complex procedures that they had not been able to negotiate or influence, and which they felt were partially designed to make the task more difficult severely undermined their confidence in the impartiality of the referendum process, as did the aggressive rhetoric of the government. Because there had never been a recall referendum before and there were no precedents, procedures could have been reached through consensus and should have been made explicit from the outset. As it was, people felt that there was no political will to accommodate a referendum, and that the CNE used the argument of the need for transparency in the signing process as a tool to make the collection of signatures more complicated. This perception of the use of ‘transparency’ was further compounded by the later demand to revalidate signatures. The rejection of about a third of the signatures after substantial delays in the scrutiny process only confirmed the suspicions of the opposition – they became convinced that the CNE was out to stop the referendum in any way they could. The Carter Center confirms that the scrutiny of signatures was plagued by incomplete and vague instructions, slow decision-making and insufficient training and resources, and that it was directed more by the desire to detect fraud than the need to respect the will of signatories. According to the Centre, the CNE began to hold consultations with the opposition at the encouragement of international observers first when they made the demand that signatures be revalidated, and the consultations led to improved relations. Such consultation continued through the rest of the referendum process, but broke down when the audits of votes were not carried out in the way that had been previously agreed – when it mattered the most. Thus, there were a number of failures in this ‘laboratory of democracy’. The most glaring failure of all was the publication of the list of signatories. Accustomed to the government’s respect of the secret vote in previous democratic elections, it is unlikely that the signatories foresaw that they might lose jobs or government benefits due to their political convictions. After signing, however, many people did lose government posts or fail to be hired, and no secret was made of the reason why. Some signatories even reported difficulties in obtaining passports or identity cards. Here, the government (via an elected official, a member of the National Assembly who posted the list of signatures on his web page) made people’s private convictions public knowledge, using transparency as a weapon against its opponents by unveiling what should have remained confidential. Unfortunately the ‘Lista Tascón’ appears to be only the beginning of developments that militate against the secret ballot in Venezuela. Subsequently,

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the MVR has developed the ‘Lista Maisanta’, software which is said to include the information registered in the national electoral roll crossreferenced with the Lista Tascón and information regarding each voter’s record of participation in or abstention from voting in particular elections and referendums, whether or not they are public employees, and their participation in government programmes and benefits. It is thus a potent tool for mobilizing the pro-government vote. West and Sanders (2003) discuss how conspiracy theories abound despite the prevalence of calls for transparency and good governance, and the importance that these concepts are taking on in the globalized world. They note that modernities are multiple, penetrating differently into societies around the globe, and that people interpret political events based on their past histories, traditions and what they see happening ‘on the ground’. While state policies and mechanisms may be structured more ‘transparently’ according to the standards of the industrialized West, they may well remain opaque to a majority of citizens. In this light the use of electronic voting machines rather than manual balloting can be questioned, and the use (and misuse) of the Internet in connection with electoral processes becomes highly problematic. Technology can be used both to help and to hinder democratic processes, but it is by nature not transparent and accessible to all, and therefore full of ambiguity. At the end of 2005, the controversy in the country concerned the December elections to the National Assembly. Electronic fingerprint readers were installed at all voting sites in order to prevent multiple voting and to establish a national fingerprint registry, but one week before elections the opposition convincingly proved – contrary to CNE assurances – that it would be possible to correlate the fingerprints to be collected with the votes cast, and thus to document the political preferences of all voters. Although the CNE decided to withdraw the fingerprint readers, four of five major opposition parties chose to withdraw from the elections. Súmate urged opposition voters to go to church on Sunday (election day) to ‘pray for transparency and truth, uniting our hearts and our thoughts for Venezuela’.36 According to reports all government workers were firmly instructed to vote, but voter turnout for the election was a mere 25 per cent of the registered voters according to the CNE; 17.5 per cent according to Súmate, which also noted a large number of blank votes (between 10 and 15 per cent). In their evaluation of these legislative elections, the invited international observers, the OAS and the European Union, pointed out that there had been massive abstention due to the fact that broad sectors of the population lack trust in the electoral process and the independence of the electoral authority. Much of the population thus clearly showed their mistrust of the CNE and their support for the secret vote. The government ignored this censure, however.

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The conditions for the presidential elections scheduled for the end of 2006 have similarly been the object of contention between the government and the opposition. The CNE has a new board of directors but is still believed to be partial to the government (four of the five members of the board are said to favour the government while one favours the opposition), and has decided to use fingerprint readers to prevent multiple voting, although there are simpler mechanisms available, such as indelible ink, that do not provoke fear or mistrust. There is also substantial criticism against the electoral roll, which contains many errors and omissions. The main controversy, however, concerns the use of the electronic voting machines. Several opposition parties fear that the machines will be manipulated and prefer the manual voting system used in the last presidential elections. They insist on the right to audit all the votes, if the electronic machines are used. The CNE’s position is that a 55 per cent audit is sufficient, and it reserves the right to choose the areas to be audited. The lack of confidence in fair conditions for the elections has led leaders of the AD party to call for abstention, which is, however, rejected by other sectors of the opposition. There is some hope that in the months remaining before elections the oficialistas and opposition can reach a consensus on the methods to be employed. The Venezuelan case makes it clear that the struggle for transparency lies beyond the establishment of the numerical or procedural constructions on which it is based – it must be grounded on respect for autonomous institutions, the integrity and rights of citizens, and for the implementation of the nation’s laws and agreements, as well as on a will to compromise with adversaries (see the chapters by Yenkey, Thedvall and Soneryd in this volume for examples of attempts to reach such compromises between opposing parts). In such an atmosphere, it is possible to reach consensus through political negotiation. Transparency is not possible without the trust that evolves from such respect, as well as deference to both the open and the hidden spaces of democracy. In the final analysis, transparency is a socially embedded process that is always in the making, built on historical experience, consultation and a leap of faith.

ACKNOWLEDGEMENTS The research upon which this chapter is based is part of the projects ‘Fashioning markets: accountability and transparency in the global marketplace’, funded by The Swedish Research Council, and ‘The Emergence of Civil Society in Venezuela: New forms of representation and participation’, funded by the Swedish International Development Cooperation

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Agency, Department for Research Cooperation (SIDA/SAREC). Both projects are based at the Department of Social Anthropology, Stockholm University.

NOTES 1.

The parties in power include Chávez’s Movimiento Quinta República, or MVR, and the coalition of small parties which support it. The MVR was formed in 1994 as the electoral arm of the Movimiento Revolucionario 200 (MBR-200), a military movement originally formed in the early 1980s by a group of junior army officers, of which Chávez was one. It was committed to overthrowing the established political system, which it viewed as unrepresentative and corrupt. A decade of covert activity resulted in two failed coup attempts. The MVR does not characterize itself as a political party but rather as a popular movement or electoral platform, and in a survey conducted in 2000 just over half of the MVR members of the National Assembly said that they did not believe that political parties were necessary in a democratic system (Ramos Rollón, 2004). Thus the character of political life in Venezuela changed significantly with their ascent to power, and continues to change since they came to completely dominate the National Assembly after the 2005 legislative elections. 2. Venezuelans’ concerns about the Chávez presidency included (1) the ‘Cubanization’ of the country, as Cuban doctors, dentists, teachers, sports trainers, and more recently, journalists have been invited to work in the country, (2) the lack of autonomous institutions in the country and the increasingly autocratic measures taken by Chávez, (3) the militarization of the country with important posts in government institutions and agencies awarded to members of the military, and ‘Bolivarian Circles’ being organized, and sometimes armed, in poorer neighborhoods, (4) the discursive polarization of the society into the ‘poor’ versus the ‘oligarchs’ (read, middle class and elites, who make up a large part of the opposition) due in large part to Chávez’s aggressive rhetoric. 3. Harper discusses the way in which facts are elaborated in the context of an IMF mission, which is at the same time an intensely socially embedded process. See Harper (2000, pp. 21–53). 4. The Carter Center, in partnership with Emory University, is committed to advancing human rights and alleviating unnecessary human suffering. It was founded in 1982 by former US President, Jimmy Carter, and his wife, Rosalynn, and is based in Atlanta. See www.cartercenter.org/aboutus/aboutus.htm for more information. 5. I thank Raoul Galli for bringing this to my attention. Tollin and Törnqvist also discuss how the expression or other manifestation of opinions and views is expected to be done in an open manner allowing the public to associate views with individuals – hence the opposition to masked demonstrators. 6. Petroleum accounts for about 25 per cent of gross domestic product (GDP), about 80 per cent of exports and approximately 50 per cent of fiscal revenues. See The World Bank, http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/ VENEZUELAEXTN/0,,menuPK:331777~pagePK:141132~piPK:141107~theSitePK:3 31767,00.html, accessed 22 May 2007. 7. At this time foreign companies exploited the oil wells in Venezuela and the country sold petroleum very cheaply. 8. Many small parties started by splitting off from larger parties due to ideological disagreement on an important issue. 9. There was 61 per cent abstention. See El Universal (1999), ‘Se Impuso el Si con Alta Abstención’, http://buscador.eluniversal.com/1999/04/26/pol_art_26102AA.shtml, 26 April, accessed 22 May 2007.

280 10. 11. 12.

13.

14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27.

Transparency and the public BBC News (1999) ‘Social revolution vote for Venezuela’, http://news.bbc.co.uk/2/hi/ americas/5660960.stm, 15 December, accessed 22 May 2007. The elections were marred by torrential rains resulting in landslides that according to government estimates killed circa 30 000 people. The Polo Patriótico, a coalition of 14 small parties backing Chávez, held all but 10 of the 131 seats in the Constituent Assembly that drafted the new constitution. See The Economist (1999), ‘A speedier constitution for Venezuela’, www.economist.com/ displaystory.cfm?story_id=242341, 23 September, accessed 22 May 2007. The Article 72 referendum is an initiative of the Venezuelan voting public. It has two separate requirements, both of which much be fulfilled in order for a referendum on an official term to be valid. Its requirements can be summarized as follows: Step 1: The first clause of Article 72 specifies that 20 per cent of registered voters must solicit the convening of a referendum before the actual referendum can occur. The registered voters soliciting such a referendum must adhere to all established laws for valid petitions, and the signatures must be counted and verified by the National Elections Council in order to determine whether or not the actual referendum will take place. Step 2: In the event that the Step 1 requirement is met, the referendum vote will occur. In order for it to be successful, the following two requirements must be met: (a) an equal or greater number of voters that elected the functionary, in this case the President, must vote for the revocation of his mandate; and (b) at least 25 per cent of registered voters must participate in the referendum. All votes will be verified and counted by the National Elections Council before a determination is made on the outcome of the referendum. See www.venezuelanalysis.com/articles.php?artno=1010, accessed 24 June 2007. See CNN (2001), ‘Thousands protest against Chávez’s education reforms in Venezuela’, www.latinamericanstudies.org/venezuela/education.htm, 19 January, accessed 22 May 2007. See ‘The Venezuelan oil strike’ (2003), www.pbs.org/newshour/extra/features/janjune03/venezuela.html, 22 January, accessed 22 May 2007. The Economist (2003) ‘Chávez’ battle to keep the oil flowing’, www.economist.com/ displaystory.cfm?story_id=1957433, 31 July, accessed 22 May 2007. Translation mine, see www.cne.gov.ve/pe_cne.php, accessed 22 May 2007. See the CNE website, Resolución N°030912-461, www.cne.gov.ve/documentos/resol_ rr 01.php, 12 September 2003, accessed 22 May 2007. BBC News (2003) ‘New bid to oust Venezuelan leader’, http://news.bbc.co.uk/1/hi/world/ americas/3245244.stm, 28 November, accessed 22 May 2007. The civil group Ciudadanía Activa has made a video documenting this and other persecution related to electoral processes entitled ‘La Lista: Un pueblo bajo sospecha’ (The List: A people under suspicion). Because of the limited time available to collect signatures and the unfamiliarity of some signatories with the forms to be filled in, volunteers had often filled in the form for signatories, who then signed the form and put their fingerprint on it. BBC News (2004), ’Chávez ruling triggers protests’, http://news.bbc.co.uk/1/hi/world/ americas/3522895.stm, 3 March, accessed 20 June 2007. BBC News (2004), ‘Venezuela court boosts poll hopes’, http://news.bbc.co.uk/1/hi/ world/americas/3514440.stm, 16 March, accessed 20 June 2007. See El Universal (2004), ‘Súmate: número de mesas no son suficientes para reparar todas las firmas’, www.eluniversal.com/2004/04/08/pol_art_08A445017.shtml, 8 April, accessed 22 June 2007. See Gustavo Coronel (2004), ‘Why 4 million Venezuelans cannot turn the page’, www.vcrisis.com/index.php?content=letters/200409091742, 9 September, accessed 22 June 2007. BBC News (2004), ‘Chávez claims referendum victory’, http://news.bbc.co.uk/2/hi/ americas/3569012.stm, 16 August, accessed 22 June 2007. See ‘Resultados del referéndum revocatorio presidencial celebrado en Venezuela el 15 de agosto de 2004’, www.oas.org/consejo/sp/resoluciones/res 869.asp, accessed 22 June 2007.

Transparency as tool and weapon 28. 29. 30. 31. 32. 33. 34. 35. 36.

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See ‘The Venezuela Presidential Recall Referendum: Final Reports 25 Feb 2005’, www.cartercenter.org/news/documents/doc2023.html, accessed 20 April 2007. See El Universal (2004), ‘Álvarez: Hay condiciones para impugnar el referendo revocatorio’, http://buscador.eluniversal.com/2004/09/08/pol_ava_08A490835.shtml, 8 September, accessed 20 April 2007. El Universal (2004), ‘Oposición califica de fraude nacionalizaciones de extranjeros’, http://buscador.eluniversal.com/2004/07/07/pol_ava_07A473805.shtml, 7 July, accessed 20 April 2007. El Universal (2004), ‘Súmate: 99% de probabilidad de fraude en referendo’, http:// buscador.eluniversal.com/2004/09/05/revo_ava_05A489779.shtml, 5 September, accessed 22 May 2007. El Universal (2005), ‘Estudio solicitado por el Centro Carter descarta evidencia de fraude en el RR’, http://buscador.eluniversal.com/2005/04/06/pol_ava_06A548735.shtml, 6 April, accessed 22 May 2007. El Universal (2005), ‘Rodríguez asegura que no hubo fraude en referendo revocatorio de 2004’, http://buscador.eluniversal.com/2005/08/15/pol_ava_15A597799.shtml, 15 August, accessed 22 May 2007. See the Inter American Press Association ‘Midyear Meeting SIP/IAPA (Panama City, Panama, March 11–14, 2005) Report on Venezuela’, www.sipiapa.org/publications/ report_venezuela2005.cfm, accessed 22 May 2007. See The Carter Center (2004), ‘Executive Summary of Comprehensive Report’, www.cartercenter.org/documents/1837.pdf, 30 September, accessed 22 May 2007. See El Universal (2005), ‘Súmate reitera llamado a asistir a misa mañana’, http:// buscador.eluniversal.com/2005/12/03/epar_ava_03A639715.shtml, 3 December, accessed 22 May 2007.

REFERENCES Coles, Kimberly (2004), ‘Election Day: the construction of democracy through technique’, Cultural Anthropology, 19 (4), 551–80. Coronil, Fernando (1997), The Magical State: Nature, Money and Modernity in Venezuela, Chicago: University of Chicago Press. España N. and Luis Pedro (2006), ‘La política de inclusión social’, in Universidad Católica Andrés Bello (UCAB), Instituto de Investigaciones Económicas y Sociales (eds), Venezuela: Un acuerdo para alcanzar el desarrollo, Caracas: Publicaciones UCAB, pp. 78–138. Foucault, Michel (1977), Discipline and Punish, Harmondsworth: Penguin. Giusti, Roberto (2005), Los Años Duros: La Realidad no Contada 1989–2004, Venezuela: Editorial Libros Marcados. Harper, Richard (2000), ‘The social organization of the IMF’s mission work’, in Marilyn Strathern (ed.), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge, pp. 21–53. Jatar, Ana Julia (2006), Apartheid del Siglo XXI: La informática al servicio de la discriminación política en Venezuela, Caracas: IRA Edición, Súmate, www. anajuliajatar.com/apartheid/index.html, accessed 22 June 2007. Livingston, Grace (2003), ‘Venezuela nears showdown’, in BBC News, UK Edition, http://news.bbc.co.uk/1/hi/world/americas/3127765.stm, 6 August, accessed 20 April 2007. López Maya, Margarita (2005), Del Viernes Negro al Referendo Revocatorio, Caracas: Ediciones Alfadil.

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Martínez, Eugenio (2004), ‘Arrepentidos Pueden Eliminar Firmas’, in El Universal, www.eluniversal.com/2004/04/29/pol_art_29104A.shtml, 29 April, accessed 20 April 2007. Méndez, Gustavo (2004), ‘Political opposition asks for balance in electoral power’, in El Universal, http://buscador.eluniversal.com/2004/08/27/en_revo_art_ 27A487251.shtml, 27 August, accessed 20 April 2007. Micheletti, Michele (2004), ‘ “Put your money where your mouth is!” The market as an arena for politics’, in Christina Garsten and Monica Lindh de Montoya (eds), Market Matters: Exploring Cultural Processes in the Global Marketplace, Basingstoke: Palgrave Macmillan, pp. 114–34. Ochoa Teran, Orlando (2004), ‘Smartmatic y la automatización electoral: un desafío sin precedentes’, in El Universal, www.eluniversal.com/2004/04/07/pol_ art_07106A.shtml, 7 April, accessed 20 April 2007. Peñaloza, Pedro Pablo (2006), Chávez es Derrotable: Un análisis desapasionado, Venezuela: Editorial Libros Marcados. Power, Michael (1997), The Audit Society: Rituals of Verification, Oxford: Oxford University Press. Ramos Rollón, Marisa (2004), ‘Partidos y grupos políticos en Venezuela: dimensiones ideológicas y líneas de división política’, in J.E. Molina Vega and A.E. Álvarez Díaz (eds), Los Partidos Políticos Venezolanos en el Siglo XXI, Caracas: Vadell Hermanos Editores, pp. 305–35. Scott, James C. (1998), Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed, New Haven, CT: Yale University Press. Shore, Cris and Susan Wright (2000), ‘Coersive accountability: the rise of audit culture in higher education’, in Marilyn Strathern (ed.), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London: Routledge, pp. 57–89. Strathern, Marilyn (ed.) (2000), Audit Cultures: Anthropological Studies in Accountability, Ethics and the Academy, London and New York: Routledge. Tollin, Katherina and Maria Törnqvist (2003), ‘Att hålla masken: hemliga subjekt i det politiska rummet’, Fronesis, 2003 (11–12), 207–27. Torpey, John (1998), ‘Coming and going: on the state monopolization of the legitimate “means of movement” ’, Sociological Theory, 16 (3), 239–59. Villegas Poljak, Ernesto (2002), ‘Proponen coordinadora que una a la oposición’, in El Universal, http://buscador.eluniversal.com/2002/02/23/pol_art_23106CC. shtml, 23 February, accessed 24 June 2007. West, Harry G. (2003), ‘ “Who rules us now?” Identity tokens, sorcery and other metaphors in the 1994 Mozambican Elections’, in Harry G. West and Todd Sanders (eds), Transparency and Conspiracy: Ethnographies of Suspicion in the New World Order, Durham, NC: Duke University Press, pp. 92–124. West, Harry G. and Todd Sanders (eds) (2003), Transparency and Conspiracy: Ethnographies of Suspicion in the New World Order, Durham, NC: Duke University Press.

In retrospect: the play of shadows Christina Garsten and Monica Lindh de Montoya ‘Visibility is a trap’. (Foucault, 1977, p. 200)

TRANSPARENCY AS NARRATIVE We live in a world which aspires to be one of visibility, openness and clarity – indeed one of transparency. The capacity to ‘see through’ has been evoked as significant in relation to organizational life, social life and to culture. In its crudest understanding, we are left with the idea that visibility, legibility and measurability signify that which is righteous, legitimate, successful or democratic. But as the contributions to this volume have shown, there is more to transparency than meets the eye. We set out to explore the ideas and practices of transparency in different social and organizational contexts, to initiate a discussion of the complexity of the term. The wide scope of our analysis aimed to show the importance of understanding the wider organizational, cultural and ideational context in which transparency is invoked. In its capacity as a ‘travelling keyword’, transparency easily tangles with, liaises with and colours other equally compelling terms, practices and organizational structures. And it does this in a not so innocent manner. We argue that notions of transparency are involved in efforts to fashion, govern and control human activity in a normative way and are intrinsic to a cluster of concepts and practices that constitute the globalized market rationality. The concept is thereby linked to a neo-liberal ethos of governance that fosters individualism, entrepreneurship, voluntary forms of regulation and formalized types of accountability. And since it is inscribed in political, financial and cultural documents, processes and policies that work towards a certain normative vision and order, transparency is a powerful device. Transparency may come with a bundle of good intentions, and with a set of instruments that render visible, record, differentiate and communicate. But transparency hides as much as it reveals. The many negotiations around what is to be revealed and what is to be kept secret, what is to be 283

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made transparent and what is to remain or be made opaque, bring to mind shadow puppetry in which opaque, articulated figures create the illusion of moving, differentiated images that proceed to tell a tale. If we continue along the lines of the shadow-play metaphor, we may conceive of transparency as a narrativizing tool. It has been suggested in the Introduction to this volume that transparency can work as an ‘attention direction device’ (Power, 2003, p. 14), and that it provides a narrative for social and organizational processes. Transparency, as employed by people in diverse cultural, social, organizational settings, does not come alone, as it were, but around it are spun narratives that speak of a better world order, good governance, citizen rights, or ethical behaviour. In the contributing chapters, we have seen how transparency is seen as a way to get at reliable and robust data about the European labour market (Thedvall, Chapter 7), how transparency is invoked as a means to legitimate new forms of civil–military co-operation and exercises (Viktorin, Chapter 12), or how it may become a way for a corporation to work out its core organizational identity (Galli, Chapter 3), just to mention a few examples. Transparency practices can also be part of a disciplinary narrative, one calling to account. In some of the contributing chapters (notably Hasselström, Chapter 8, Yenkey, Chapter 6, and Grossman et al., Chapter 5) transparency is part of such a disciplinary narrative in which the actors involved are to be measured in relation to how transparent their actions are. In these cases, transparency can cast light on centres of power that would otherwise appear out of sight. But it can also work the other way, impeding the workings of democracy by providing something like a vaccine to external critique, eventually resulting in the inverse of transparency (Montoya, Chapter 13). Before there is a narrative framework to establish their significance, facts do not exist as such. They take on meaning only in the context of narratives. Hence, as the pursuit of facts is connected to the notion of transparency, the concept affects their interpretation. The gaze of transparency does something to that which is being observed, monitored and made legible. It transforms the object at the same time as it is made visible, legible. With museum objects, there is now a well-established discussion of modes of representation and what they do to the object at hand (see Olesen, Chapter 1, this volume). As Barthes indicates, the representational genres developed in Western civilization such as news items, documentary literature, historical museums, diaries, realistic novels and photography hide the nature of the relationship between past reality and its representation, making ‘the transparency effect’ a basic characteristic of our societies. Although it intends to reveal, transparency can only produce situated revelations, and will only tell one of many narratives.

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In some instances, we may be talking more about ‘the translucent’, instances in which the material distorts the image, than about transparency. As with air, gas, glass and plastic, the mediation of social practice may distort the representation of the object at hand. The mediation itself impacts on the representation. This process points to the transparency process as one of translation, and of mediation. Transparency is always mediated (see Garsten and Lindh de Montoya, Chapter 4, and Klintmann and Boström, Chapter 9, this volume) and as such is open to negotiation, framing and contestation. The process of mediation may be understood as one in which the people and the technologies involved come to put their mark on the focal object, in a way that allows for the play of translucency. Entering from the other end, we might as well have asked why it is that deception, opacity and ways of lying play such a prominent role in society and culture, and why it is that we cross our fingers when appearing entirely transparent to our friend, colleague or neighbour? Why is not all social and organizational life transparent? As Evelin Sullivan (2001) has shown, deception, trickery and lying and different varieties of make-believe have always played important roles in our societies. Ranging from religion, to art, entertainment and politics, they are just as tightly entangled in human life as are truth-telling, honesty and sincerity. Often, it is in the interplay of reality, verisimilitude and fiction that what we perceive as great art is created. In a parallel way of thinking, it is often the trickster who can deliver ‘the truth’ in a manner that makes it come across as more interesting and probable. ‘Tricksters’, in Sullivan’s words, turn the world and send it spinning. . . . Although tricksters sometimes play a role in the creation of the world and people out of raw materials, much more often their creativity lies in their transforming an already existing world into one that is different, sometimes better, sometimes worse, but always more interesting. (2001, p. 43)

What is clear is that every new attempt to enhance transparency will inevitably lead to new and creative ways of getting out of the limelight (see Timm, Chapter 2, this volume). Thus, there will always be an ‘aspiration gap’ (Cyert and March, 1992) in relation to transparency efforts, and we can expect to see ever new inventions and solutions towards the goal of making things visible, legible and manageable. But the fact that all processes geared towards transparency are situated, or mediated, remains a fundamental challenge in achieving transparency. There is an author, if not several, behind every narrative of transparency. The question is, whose narrative is being told? And towards what direction does it point?

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TRANSPARENCY, TECHNOLOGIES AND THE GAME OF POWER That transparency bears a close relation to power has always been evident. Jeremy Bentham’s version of the Panopticon was but one, however influential, version of omniscient power and the power of the eye. It comes as no surprise, then, that transparency is frequently discussed in relation to regulation, governance and democracy, and in relation to historical, contemporary as well as future forms of regulation. Could we then discuss transparency, following Florini, as a current form of ‘regulation by revelation’ (2003, p. 34)? Surely, it involves a particular understanding of governance and regulation; one that places a primacy on visibility, legibility and observability. The ‘trust in numbers’ so prominent in organizations, the use of indicators, of benchmarking practices, of ranking and rating techniques, would speak towards such a conception. In our view, indicators and numbers reflect processes of negation and definition-drafting. They are produced in a political and cultural context, by actors with particular interests and perspectives, which have an impact on the outcome and on what ways they are used in regulatory activities. If transparency is to be viewed as a form of regulation by revelation, it is a revelation that is capable of shadowing as much as it reveals, and one in which the workings of power may remain as obscure and opaque as they set out to be. One would think, perhaps, that the current preoccupation with transparency would assist in revealing the hidden workings of power. But as Comaroff and Comaroff argue, we are seeing a distinct shift in our understanding of the term. Zˇizˇ ek suggested that in relation to modern technology, transparency presumed the possibility of actually uncovering ‘how the machine works’, but in its postmodern sense it has come to mean the exact opposite (Zˇizˇ ek, 1997, p. 131, cited in Comaroff and Comaroff, 2003, p. 288). The cartoon icons of computer screens, they continue: may simulate everyday reality with beguiling concreteness; yet they conceal the real workings of the machine behind the glass façade, contriving the kind of legibility that renders the technology itself opaque. Is this so? Perhaps, perhaps not. For many of us, the dials on our dashboards and telephones bespeak a mechanical reality only slightly less impenetrable, suggesting that there has been a shift of degree, not kind. But Zˇizˇ ek reminds us of two things. The first is that our obsession with transparency is not unprecedented, the second that changing patterns of illumination cast new shadows and, with them, new domains of darkness beyond their arcs of light. In fact, the more literally we believe in the axiom, ‘To see is to know,’ the more haunted we are by what hovers beyond the edges of the visible. (Emphasis in original)

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True, it is good to be ‘in the know’ of things, to be able to see things clearly, to have some degree of access into the workings of powerful organizations. Social life is built around the sharing of information, knowledge, secrets and facts. Examining the politics of transparency takes us back to the basic tenets of culture and sociality. Transparency, we have argued, is relational; it emerges out of a particular relation between the observer and observed. It is situational; is acquires different meanings that are attuned to the social structures and processes in which it is invoked. It is fluid, contested and negotiated; it does not exist as such, but takes on meaning and significance in processes of negotiation between people. And it provides a directionality, a narrative to what goes on. In the Introduction, we stated that transparency is an entry-point to the understanding of contemporary society and culture and the power-games that are played out in attempting to organize it. By looking more closely at how transparency is understood, negotiated and put to work by specific actors, we can gain a broader understanding of present forms of power and how they work. Since transparency borrows from, as well as contributes to, the broad array of trends that make up late modernity or late capitalism, we need to cast the net wider in order to understand its salience and impact in global discourse and practice. What is tricky about transparency is that it comes with an associated set of practices in disguise. Transparency may not look like a technology, and because of that, it can do its job, for good or for ill, without much criticism, or even awareness. It is what Rudyard Kipling would have called ‘a technology in repose’ (Postman, 1993, p. 138). As Postman points out, this applies to all sorts of ‘invisible technologies’ such as intelligence quotient (IQ) tests and polls as well systems of ranking and grading, but also to credit cards, accounting procedures and achievement tests. In the academic world it applies to academic evaluation procedures and learning outcomes. Such ‘technologies in repose’ are often put forward as desirable structures for gaining information, learning, empowerment, or other, when they are in fact structures for allocating space for convenient record-keeping, for administration and for control (cf. Postman, 1993, p. 138). Being an invisible technology, transparency is bound to be inescapably linked to issues of power. Putting transparency to work may well contribute to the furthering of democracy, openness and to freedom, but it does not disentangle transparency from the workings of power. One could hardly escape the relevance of transparency to issues related to the risks associated with our contemporary political situation, to fears of terror and calls for security. Striking a balance between openness, freedom and trust on the one hand, and enclosure, restrictions and mistrust on the other has proven a tough game. Since the 9/11 terrorist attacks, discussions

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around the needs of guaranteeing personal security, homeland security and protecting basic liberties and privacy have intensified and escalated (see, for example, Brin, 1998; Rosen, 2005). Conspiracy theories have gained a broad appeal beyond the US context and even beyond the Western world (see Sanders and West, 2003, for an interesting discussion of conspiracy and transparency). In the Western world, there is now a preoccupation with ‘technologies of accountability’, surveillance devices, scanning techniques and safety procedures that signals not only a fear of terror, but more generally a ‘culture of fear’. One might have thought that with modernity, the fear pervading social life could be largely left behind as we tamed the uncontrolled forces of the social and natural worlds. Yet we now live in a state of more or less constant anxiety about the dangers that might strike unannounced and at any moment. This development has been discussed more thoroughly by Zygmunt Bauman (2006) as ‘liquid modern fear’. He discusses the common sources of such fears, our attempts to render them harmless and the obstacles that we encounter in doing so, and reminds us of the scale of the challenge we are confronting in our striving towards security and safety. The pursuit of transparency as a way of achieving safety and peace of mind has contributed to a market not only for social and environmental standards and codes of conduct, but also a market that caters to a perceived need for security and surveillance: specialists in security measures, risk evaluation services, risk certification schemes, consultants in safety matters – the list of available services is long. Such transparency comes with associated costs. In a transparent society, ‘security’ may come to resemble restriction sooner than we know it; openness may come to be circumscribed at closer range than we expected. And today’s personal mistakes may wind up in the Internet chatting community before we even know about them ourselves. In efforts to prevent corruption, bribery and terrorism, the ‘do-gooders’ in pursuit of transparency may come to deny people basic freedoms. Transparency may easily turn into a lever for all sorts of ideological and political ends, not just those that more clearly have to do with the good governance of bureaucracies and corporations. Is it that the pursuit of transparency has taken us to the tipping point where it may generate not mostly clarity and trust, but more so mistrust, fear and control? Is transparency contributing to ever more ingenious ways of rendering social practices opaque? We dare not say. But we should consider that the appearances that are created by way of shadow plays may be ‘real’ for some spectators, while they may as well be mere illusions for others. The play of transparency is one of simultaneous ambiguity and clarity, complexity and simplicity, and of freedom as well as restraint. The

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more it aspires to make visible, the more reason we have to look more closely at the processes behind it.

REFERENCES Bauman, Zygmunt (2006), Liquid Fear, Cambridge: Polity Press. Brin, David (1998), The Transparent Society, New York: Addison-Wesley. Comaroff, Jean and John Comaroff (2003), ‘Transparent fictions; or, the conspiracies of a liberal imagination: an afterword’, in Harry G. West and Todd Sanders (eds), Transparency and Conspiracy: Ethnographies of the Suspicion in the New World Order, Durham, NC: Duke University Press, pp. 287–99. Cyert, Richard M. and James G. March (1992), A Behavioral Theory of the Firm, Cambridge, MA: Blackwell. Florini, Ann (2003), The Coming Democracy. New Rules for Running a New World, Washington, DC: Island Press. Foucault, Michel (1977), Discipline and Punish: The Birth of the Prison, trans. Alan Sheridan, New York: Pantheon Books. Postman, Neil (1993 [1992]), Technopoly: The Surrender of Culture to Technology, New York: Vintage Books. Power, Michael (2003), The Invention of Operational Risk, London School of Economics, Centre for Analysis of Risk and Regulation, Discussion paper no. 16. Rosen, Jeffrey (2005), The Naked Crowd: Reclaiming Security and Freedom in an Anxious Age, New York: Random House. Sanders, Todd and Harry G. West (2003), ‘Power revealed and concealed in the new world order’, in Harry G. West and Todd Sanders (eds), Transparency and Conspiracy: Ethnographies of the Suspicion in the New World Order, Durham, NC: Duke University Press, pp. 1–37. Sullivan, Evelin (2001), The Concise Book of Lying, New York: Picador. Zˇizˇ ek, Slavoj (1997), The Plague of Fantasies, New York: Verso.

Index Titles of publications are in italics. Business Ethics, Journal of 160, 174–5 Business for Social Responsibility 88

abstract transparency 106–7, 112–13 access to documents, EU 110–11 access to information, US securities markets 125–33 accountability and transparency 3, 5, 7, 11, 47, 81–3, 85–7, 90, 98, 102, 110, 112, 114, 162, 163, 173, 201, 203, 208, 221, 260, 261, 283, 288 active dialogue 170 advertising and transparency 59–75 annual reports 128 anonymity, stock market trading 105–6 Appadurai, A. 26 Aristotle 138 audit 261 military 242–4 and mistrust 7, 82 audit society 7, 90, 91, 93, 144–5, 190 Auschwitz 28, 33, 34, 37 authenticity of museum objects 27–8 Holocaust Museum 34–5 Bal, M. 29 Banco Fonder 160, 165, 168–71 Barthes, R. 9, 25–8, 35, 38, 284 Baudrillard, J. 73 Bauman, Z. 4, 288 Benjamin, W. 27 Bentham, J. 6 Bogaland conflict scenario 246–9 evaluation 249–52 Boholm, Å. 219–20 Boltanski, L. 114 Bourdieu, P. 45, 48, 68, 69, 71, 73, 74, 75 brand equity 62 branding 59–75 brand mode of thought 60–63 definitions 61–2 social uses 72–5

California Constitution 109 CalPERS 108 Carbon Disclosure Project 113 Carter Center 261, 266, 269, 270, 273, 274, 275–6, 279 Caux Round Table 164 Chávez, Hugo 263–6 recall referendum 266–74 Chiapello, E. 114 CIMIC (civil–military co-operation) 251 civilian evaluation, Viking 03 exercise 251–2 Clifford, J. 29 Climate Leadership Index 113 CNE (National Electoral Council), Venezuela 266–8 assessment of referendum process 274 signature verification 269–72 Cohen, J. 124 Cole, T. 31 Coles, K. 261 Colonial Williamsburg 29–30 Comaroff, J. 254, 286 Comaroff, J.L. 254, 286 communicative action, theory of 227 community involvement, urban regeneration 207–14 complementary schismogenesis 220 conflict preventionism 242, 252–4 connectionist world 114 Conspiracy of Fools 92 context indicators, employment policy 146–9 control society 8

291

292

Index

Cooper, R. 243 Coordinatora Democrática, Venezuela 265, 271–2 CoreRatings 160, 171–2 Coronil, F. 262 corporate culture and branding 62 corporate governance and transparency 83–5, 107–9 corporate social responsibility (CSR) 81–2, 88–9, 162–8 Corporation, The 92 corporations and secrecy 79–80 and transparency 79–91 costs of transparency 8–9, 109, 288 councillors, role in participative policymaking 209–10 Crédit Lyonnais 111 Cromme Commission 97 culture of fear 288 culture of mistrust 7, 82 cyclical urbanization 205–18 Cyert, R.M. 285 Darby, M. 185 Day, P. 178–9 Deleuze, G. 8 deliberative democracy 124 democracy in imperfect equality environment 136–9 practice of 47 and transparency 262 democratic legitimacy and participation 201–2 Dillenburg, S. 166–7 direct experience and risk assessment 183–4 disciplinary transparency 112, 284 Discipline and Punish 6 disclosure effect on stock market performance 136–7 financial markets 103, 105–7 US securities legislation 126–33 discontinuities in participative policymaking 212–13 Dryzek, J.S. 193 Duffield, M. 245 Durkheim, E. 68

eco-labelling 181–2 layers of transparency 183–93 EconLit database 99–100 economic sector and information provision 5; see also corporations El Firmazo 266 El Reafirmazo campaign 269 elected representatives, and participative policy-making 209–10 electoral procedures and transparency 261–2 Venezuela recall referendum 266–78 electricity environmental labelling, Sweden 182, 186, 189, 190 electromagnetic fields (EMFs), health effects 223–4 Elieli, R. 31, 35–6 enabling transparency 112 English language use, Stockholm School of Economics in Riga 50–51 Enron Corp 123–4 environmental declaration labelling 186 environmental labelling, layers of transparency 178–94 equality and securities markets regulation 124–5 Erekson, H. 166 Espejo, R. 228 ethical dimension of transparency 88–91 ethical investment, see socially responsible investing ethico-politics 90 European Employment Strategy 143 European Standardized Information Sheet (ESIS) on home loans 111 European Union access to documents 110 transparency directive 111 Evans, R.J. 28 EXEVAL, Viking 03 evaluation 249–50 expertise requirements of transparency 8 Extractive Industries Transparency Initiative (ETI) 84 ExxonMobil 84

Index Fairclough, N. 201 fear in society 288 financial markets and transparency 102, 105–7 financial regulatory policy, transparency 110–12 financial risk discourse and public–private partnerships 215–16 Financial Services Action Plan (FSAP) 110 financial value of brands 62 finitist perspective 125, 137 Florini, A. 12, 86, 286 forced transparency 86–7 Forest Stewardship Council (FSC) ecolabel 182, 187–8 Foucault, M. 6, 261 framing theory, and environmental labelling 181 FSC (Forest Stewardship Council) ecolabel 182, 187–8 Gable, E. 29–30 Galbraith, J.K. 125 Gambro 86 Garfinkel, H. 248 Garsten, C. 64, 88, 144, 162 Geertz, C. 254 Generally Accepted Accounting Principles for social reporting 165–6 Germany, complaints against bank guarantees 111 Giddens, A. 8 Ginzburg, C. 28 Giscard d’Estaing, Olivier 164 Glassman, R. 138 Global Corporate Governance Principles 108 ‘good governance’ 1, 2, 12, 83, 202, 218, 219, 277, 284, 288 Goodpaster, K.E. 164, 165 governance rating, CoreRatings 172 governments and information provision 5 Grabher, G. 248 Graeber, D. 7 Gramm, Phil 131 Green, T. 166

293

green electricity standards, Sweden 182 inter-frame transparency 190–91 intra-frame transparency 189 Green Papers, EC 110 Greenspan, Alan 137 Habermas, J. 227 Handler, R. 27–8, 29–30 Hannerz, U. 59 Hansen, T.B. 256 Harper, R. 91, 279 Hartman, G.H. 31 Heald, D. 2 health risks, 3G mobile phone technology 223–4 Heidegger, M. 4 historical artefacts, authenticity 27–8 Holocaust Memorial Museum 33–6 Holocaust Memorial Museum, US 26, 30–38 home loans, European Standardized Information Sheet (ESIS) 111 Hood, C. 2 Horne, D. 27 Imber, J. 61 Ind, N. 64 indicators 12–13 employment policy 143–56 neutrality of 12, 156 industrial world and transparency 114 inequality, impact on society 138 information access to, US securities markets 125–33 European Union 110–11 and transparency 5 Innis, R. 184 inter-frame transparency 189–91 Intermarket Trading System (ITS) 135–6 International Corporate Governance Network (ICGN) 97 internationalization and Viking 03 exercise 244–6 intra-frame transparency 188–9 invisible technology, transparency as 287

294

Index

Jatar, A.J. 269 Journal of Business Ethics 160, 174–5 justification regimes 114 Kaku, Ryazabur 164 Kansteiner, W. 28 Kapferer, J.-N. 62 Karni, E. 185 key indicators, employment policy 146–9 Keynes, J.M. 138 Kipling, R. 287 Klein, N. 62 Klein, R. 178–9 knowledge requirements of transparency 8 Koshnik 61 KRAV, organic food labelling scheme 182 labelling layers of transparency 179–93 of students, Stockholm School of Economics in Riga 49–50 Latour, B. 237–8 Latvian language use, Stockholm School of Economics in Riga 51 Laufer, W.S. 165 layers of transparency 179–81, 182–93 Lee, R. 105 legislation, US securities markets 126–34 Lenas, S. 60–61 Leuz 132 Levin, D.M. 4 Levitt, Arthur 129, 130, 132 Linder, Staffan Burenstam 43 Lindh de Montoya, M. 87, 144 Linenthal, E.T. 37 literal transparency 106–7, 112–13 Löfstedt, R.E.V. 219–20 Luke, T.W. 29 MacKenzie, D. 14, 125, 137 Macpherson, C.B. 27 Man without Qualities 254 Marceau, J. 54 March, J.G. 285 market information disclosure 105–7 US securities markets 122–33

Mauss, M. 68 McCarthy, J. 245 mediated transparency 184–6, 192, 285 meetings, role in participative policymaking 210–11 Merleau-Ponty, M. 20 microfinance industry 84–5, 87 military auditing 242–4 mistrust due to audit 7, 82 Modern Local Government in Touch with the People 203 monitoring corporations 107–9 moral dimension of transparency 88–91 museums authenticity of objects 27–8 Holocaust Memorial Museum 26, 30–38 Musil, R. 254 Muten, L. 44, 46 name-tag rule resistance, Stockholm School of Economics in Riga 49–50 narrative, transparency as 90–91, 283–5 National Action Plans (National Reform Programmes) and employment policy indicators 148 National Market System (NMS) 134–5 nations and transparency 90 NATO Partnership for Peace 243 negotiated transparency 186–8 neoliberalism 3, 4, 7, 18, 241, 242, 244–7, 254 Net, The 20 New Labour government, promotion of citizen participation 201–3 Nineteen Eighty-Four 20 Nittve, L. 61 No Logo 62 Norfolk Park, urban regeneration 206–20 normative dimension of transparency 88–91 Novick, P. 26 OAS 261, 266, 269–71, 275, 277 OECD, corporate governance principles 107

Index Opening of Vision, The 4 organic food labelling, Sweden 182 inter-frame transparency 189 Otera Silva, M. 262 Paalzow, A. 44, 46 panopticon 6–7 Paris Bourse 105–6 participation/transparency/partnership triad 203–5 participative partnership government 201–5 and urban regeneration 205–20 Pentland, B. 192 Perry, Michael 75–6 pervasiveness of transparency 99–102 Phillips, Frederick 164 political representation 154, 201 post-national indicators, employment policy 145–6 Postman, N. 287 Power, M. 7, 42, 82, 144–5, 179, 192, 261, 284 power and transparency 6–7, 286–9 precautionary principle 234–5 price discovery 102, 105–7 Primitive Classification 68 Private Finance Initiatives 204 public participation in political processes 201, 202–3 mobile phone transparency exercise 229–30 urban regeneration 205–20 public–private partnerships 204–5 promotion by New Labour 201, 204 and urban regeneration project 205–20 Quiros, Albert 272 rating and ranking 168, 173–4 ‘regulation by revelation’ 12, 144, 286 Regulation Fair Disclosure (Reg FD) 128–30 regulations, US securities markets 122–40 relationships and transparency 5 responsibility risk rating 171–2 RISCOM model 227–8

295

risk discourse and public–private partnerships 215–16 Risk Transparency Award 86 risk uncertainty 187 Room, A 61 Roosevelt, F.D. 122, 138–9 Rose, N. 8, 83, 90 Russian language use, Stockholm School of Economics in Riga 52 Sahlins, M. 219 Sanders, T. 145, 202, 217, 260, 277 Sarbanes, Paul 131 Sarbanes–Oxley Act (S–O Act) 131–3 schismogenesis 219–20 Schneider, Peter 246, 249–50 Schueth, S. 162 Schwartz, M. 162, 164 Scott, J. 54 Scott, J.C. 1 SEC (Securities and Exchange Commission) 123 secrecy and corporations 79–80 positive aspects 72–3 Securities Act 1933 126–8 Securities Exchange Act 1934 126–8, 133–4 Securities and Exchange Commission (SEC) 123, 124 legislation 126–34 proxy voting disclosure 109 Securities Industry Association (SIA) 130 security markets regulation, US 122–40 selective disclosure 129 Sennett, R. 254–5, 256 Shapiro, S.P. 122 Shore, C. 18, 42, 261 Sign Again campaign, Venezuela 269 signature collection, Venezuela referendum 268–72 simple mediated transparency 184–6, 192 social dialogue and workers’ involvement indicators 150–56 social necessity for transparency 3–4 social responsibility measurement 166–8 social uses of branded visions 72–5

296

Index

socially responsible investing 160–75 Banco Fonder 169–71 rating and ranking 168, 171–2, 173–4 socio-political changes and transparency 115 Stepputat, F. 256 Stigsson, Tony 246, 249 stock market crash, 1929 125–6 Stockholm School of Economics in Riga (SSE Riga) 43–56 business ethics teaching 46–7 curriculum 52–3 entry criteria 45 establishment of 43–4 establishment principles 55 graduate destinations 53–4 languages used 50–52 name-labelling 49–50 physical design 47 student–staff relationships 46 Strathern, M. 42, 55, 86, 145, 261 Sullivan, E. 285 Súmate 268–9, 271, 274, 277 surveillance 7 Sveaskog 190–91 Sweden attitudes to brands 60–63 eco-labelling schemes 181–2 3G mobile phone technology controversy 223–5 Swedish Radiation Protection Agency (SSI), transparency exercise 223–38 Swedish Society for Nature Conservation, electricity eco-labelling 182 symmetrical schismogenesis 220 Take on the Street 130 Tagg, J. 27 Tanovic, J. 87 target picture of consumer 64–5, 69–70 team-working, Stockholm School of Economics in Riga 48–9 technologies in repose 287 technology and transparency 286–8 use in elections 277–8 theory of communicative action 227 Thévenot, L. 114

3G mobile phone technology, transparency exercise 223–8 Toffler, B.-A. 61 Total Recall 20 total social impact (TSI) rating 166–8 trade union density as indicator of worker involvement 154 –5 transparency and advertising 72–3 and calculability 98, 103, 112, 113, 174 in conflict preventionism 241–55 costs of 8–9, 190, 288 in design 47 and electoral procedures 261–2 Venezuela 266–78 as ethical narrative 90–91 European labour markets 143–5 as governmental device 98 as invisible technology 287 layers of 179–81, 182–93 and legibility 2, 4, 8, 82, 90, 283, 286 and mistrust 7, 82 as narrative 283–5 and participation 201–20 and power 6–7, 286–9 and the public 16–19 references in economic literature 99–102 and relationships 5 and representation 15, 25–30, 36, 218–19 and representational strategy 26, 33, 36, 38, 39 in securities markets 122–40 and volition transparency directive, EU 111 transparency effect (Barthes) 25–6 transparency exercise, 3G mobile phone technology 230–38 Transparency Forum for Mobile Phone Communication 225–38 Traveler, The 20 trust in numbers 12, 89, 145, 286 in social responsibility investment 173 Stockholm School of Economics in Riga 45–6 and transparency 7, 82 tyranny of transparency 86

Index Uggla, H. 61, 62 United States Holocaust Memorial Museum 26, 30–38 securities markets regulation 122–40 universities and transparency 5 urban regeneration 205–18 VALDOC (Values in Decisions on Complexity) group 226–7 Van Maanen, J. 192 Venezuela Chavez government 263–6 democratic governance 262–3 election transparency 277–8 presidential recall referendum 266–77 Viking 03 exercise 241–55 exercise evaluation 249–52 objectives 244–5 visibility and transparency 3–6

297

Volcker, Paul 132 voluntary disclosure 85–7 Wacquant, L. 68 Wallace, M. 29 Walsh, K. 29 Ward, S.V. 204 Watt, Senator 131 Weber, M. 126, 138 Weinberg, J. 31, 35–6 West, H.G. 145, 202, 217, 260, 269, 277 whistle-blowing 91–2 White, H. 248 Wilensky, H. 192 Women’s World Banking 85 workers’ involvement, indicators of 150–56 workplace and transparency 5 Wright, S. 18, 42, 261 Wene, C.-O. 228 Zˇ izˇ ek, S. 286