Legislative Transparency and Fiscal Responsibility: Evidence from the States

• In Event: Institutions and Representation in State Legislative Politics

Abstract

Are transparent legislatures more fiscally responsible? Open governance requirements are designed to improve accountability and limit corruption, which implies that legislatures subject to open proceedings are more trustworthy stewards of their publicly-invested power. We examine this logic in the context of American state legislatures, many of which have exempted themselves from their states’ sunshine laws in recent decades. We leverage variation in the timing of these exemptions to identify the effect of “exposure to sunshine” on two outcomes related to states’ fiscal health: budget deficits and investors’ risk perceptions of state bonds. We contend that, if transparency induces accountability, opening the legislative process should (1) reduce states’ actual debt, (2) improve their perceived debt repayment risk, and (3) lower variance in assessments of that risk. We plan to test our expectations with novel data we have collected on sunshine law exemptions and state budgets and credit ratings from 1990-2015. Results of this research will contribute to a broad literature on the political consequences of governmental transparency reforms. Additionally, it will provide direct insight into the question of how an important and ubiquitous legislative institution impacts the lived experience of citizens. States’ fiscal health exerts substantial influence on a myriad of critical outcomes, including the availability of social services, the delivery of health care, consumer and environmental protection, and public pensions. Thus, there is strong normative motivation to empirically evaluate whether transparency in government actually yields its expected outcome of better accountability. Ultimately, this research will shed light on how the design of a governing institution can leave a mark on the everyday lives of citizens.

Authors

• Jeffrey J. Harden, University of Notre Dame

• Justin Kirkland, University of Virginia

• Patrick E. Shea, University of Houston