The theory that government transparency, and in particular better access to government spending data, will lead to limited government is premised on the idea that the reason the public doesn’t press for an end to out-of-control government spending—whether on defense or entitlements or anything else—is that they are rationally ignorant.
The idea is not that once informed above a certain threshold, citizens automatically become libertarians. It’s simply that knowing that a particular bill or regulation will cost their family, say, $500, citizens will, on the margin, be less likely to favor it. And citizens will, also on the margin, be more inclined to express such views–whether by voting, or calling congress, or tweeting. The cumulative effect of these small actions will press politicians to change course toward smaller government.
But here’s the rub. How is it that rational citizens faced with an information asymmetry allow big government to take root in the first place? It’s only later, when they are exposed to the folly of their ways, that citizens demand limited government. This doesn’t make sense. If anything the opposite should be the case.
Ignorance, therefore, is not the problem; the problem is rooted in irrational biases. More information alone is not going to change beliefs or political behavior. Indeed, it could make things worse.It would be a wonderful thing if government transparency presented a new path to limited government, but it doesn’t. It can help achieve less corrupt government, which is great, but it won’t change people’s suspicions about markets.