Transparent Government and Libertarianism
By Arnold Kling
[There is ] a big principle-agent/incentive compatibility problem between representatives and the citizens they represent. Politicians want to get re-elected. If they can subsidize interest group A at group B’s expense without group B really noticing due to the hidden transfer, then that will sound like a real winner to a politician. Which is just to say that the incentives politicians face encourage them to violate the very conditions of transparency and public justification that make their coercive powers legitimate. That sounds like a problem to me.
Many on the left oppose transparency of the sort that Wilkinson advocates. They say, for example, that if Social Security or Medicare were understood as transfer programs, then those programs would be unpopular and the indigent elderly would suffer.
Wilkinson’s point is that stealth transfers violate democratic principles by allowing political elites to do in the shade what they could not get away with in the sun. I am not sure that he has a viable solution to this problem, or that there is one.