Economy, Domestic Economy

Two Steps to Economic Transparency

Two Steps to Economic Transparency
Two Steps to Economic Transparency

One of the prominent facets of the developed economies is economic transparency which comes from transparency in objectives, internal decision-making process, economic forecasts and models, communication tools of decision makers, and control methods. The degree of economic transparency has been an area of intense debate among practitioners, politicians and economists. In order to remedy some of the deficiencies in the economy, it is strongly recommended that the government pursues the following two steps to pass the initial stages of economic transparency.

 Establishing Economic Data Center

Although some may believe that there are a few organizations responsible for providing these types of data, researchers know how cumbersome it is to extract the historical data from different aspects of Iran’s economy. When there is a lack of relevant and trustworthy data in the economy, it is somewhat impossible to expect reliable, solid analysis from academicians and adopt policies based on their analysis. It is illogical to either conduct academic research or run a country by estimation. By establishing such a center, having access to data will not be a source of power, but the soundness of analysis will.

In the developed economies, transnational organizations, central banks and some well-known private companies are responsible for providing the databases for macroeconomic figures and business intelligence. Using their methods and style of reporting as appropriate benchmarks can be helpful for recognizing what types of data should be collected and how to support economists and decision makers.

 Establishing Business TV Channel

A business news television channel can contribute to the economy, financial markets and companies in several ways. First, following financial news boosts the number of active investors in the economy, especially in the Tehran Stock Exchange, because when there is more up-to-date information about firms and managers available to potential investors, it is highly likely that they become informed investors and make reasoned investment and financing decisions. That is in accordance with the government’s intention to strengthen the financial markets. Second, the channel  would increase the level of responsiveness and accountability amongst executives since an improper or a lack of communication can cost them their jobs. Third, a business television channel advances the learning in the economy due to sharing the business success and failure stories and escalates the business knowledge in the society. Fourth, managers who achieve outstanding business performance will be distinguished and can be offered better jobs. All these items will result in an entrepreneurial, business-minded culture which promotes prosperity.

The above-mentioned steps are complementary and they are able to bolster confidence among investors and facilitate transparency which is the key to boosting the economy.

Amir Moradi is a PhD candidate in finance at France Business School.