Transcript ECONOMIC ISSUES IN FUNDING AND SUPPLYING PUBLIC SECTOR INFORMATION Dr John S Cook 30 July 2009 © 2009 Spatial Information Systems Limited, as trustee for Participants under.

ECONOMIC ISSUES IN
FUNDING AND
SUPPLYING
PUBLIC SECTOR
INFORMATION
Dr John S Cook
30 July 2009
© 2009 Spatial Information Systems Limited, as trustee for Participants under the
Collaborative Research Centre – Spatial Information (CRC-SI)
This work is licensed under a Creative Commons Attribution 2.5 Australia License.
Presentation overview
• Types of transactions
• Pricing principles – in situations of no
charging and charging for PSI
• Cost recovery considerations
• Equity issues – what is fair and
reasonable when viewed holistically
• Efficiency and effectiveness
• Authority to produce and supply PSI and
associated taxation and funding issues
• Accounting and accountability
Slide 2 of 14
Types of transactions
• No Charging – Non-contractual supply of
information to anyone.
• Charging – in circumstances that could
involve:
– Supply of information by command of a statute
to anyone who is entitled to receive it.
– Inter-agency transfers and exchanges within a
government as a single legal entity.
– Transfers from and exchanges between a
government as one legal entity in dealing with
other governments or statutory authorities as
separate legal entities.
– Supply of information under terms of a
contract with a private person.
Slide 3 of 14
Pricing principles: no charging
• No charge should be made for PSI where the
government has objectives of informing the
public; obtaining information from the public; or
securing public cooperation and community
engagement.
• No charge should be made where people are able
to re-use PSI for lawful purposes at a negligible
cost to the government.
• Costs to the government are negligible where
information is supplied online in a digital format;
no representation is made that the information is
suitable for any non-government purpose; and
access is not restricted by any requirements for
privacy or confidentiality.
Slide 4 of 14
Pricing principles: Charging (a)
• A charge should be made to conform to the
prescribed fee for service as set out in an Act or
associated regulation when information is
supplied to meet statutory duties and standards
of service.
• A charge may be negotiated for work needed to
achieve interoperability and cooperation between
the government’s own agencies to meet its own
purposes. Generally, details of the proposed work
and inter-agency transfers of money and
information should be recorded in a
memorandum of understanding.
• A charge may be negotiated for work needed to
achieve interoperability and cooperation between
governments. The arrangements should be
properly set out in an inter-governmental
agreement.
Slide 5 of 14
Pricing principles: Charging (b)
• Important issues of public policy arise in going beyond
prescribed statutory duties and using public resources
to service the particular needs of a private person,
firm or organisation for information or advice.
Consequently, decisions about charging need to be
well-informed in relation to the political and economic
risks involved. Without attempting to be exhaustive,
things that need to be considered include:
– A liability regime that compares to private
professional practice.
– A need for openness and accountability in pricing.
– A potential for profit-making to be construed as a
form of taxation that should have parliamentary
approval.
– A potential for non profit-making to be construed
as failing to comply with competitive neutrality
provisions and a crowding-out of private sector
initiatives.
Slide 6 of 14
Cost recovery considerations
• Arguments are mainly about efficiency and
fairness that may be perceived broadly as:
– Efficiency – that may include issues such as
effectiveness and synergy in achieving purposes
of government, administrative simplification,
and the proportion of transaction costs to net
revenue after collection.
– Fairness – that may include issues such as
redistributive justice, administrative
simplification and transparency, and
reasonableness – a demonstrated ability to give
acceptable reasons for decisions to fair-minded
citizens to satisfy requirements for social
cohesion.
Slide 7 of 14
Efficiency considerations
• Generally, macroeconomic efficiency concepts
and indicators do not help information policymaking at an operational level.
• More useful concepts are microeconomic:
– Technical or x-efficiency – efficiency
improves if the same input can achieve greater
output.
– Pareto or allocative efficiency – where
efficiency improves if people can trade to
mutual advantage without harming anyone
else – a ‘win-win’ situation.
– Dynamic or adaptive efficiency – where
efficiency improves if resources can be readily
adapted to new tasks.
Slide 8 of 14
Market v command decisions
• Some adaptation of market-oriented
efficiency concepts is required for
command type activities of public and
private bureaucracies.
– Efficiency – doing things the right
way – which aligns more or less with
technical efficiency.
– Effectiveness – doing the right
things – where market-oriented
decisions about allocation are replaced
by collective or command decisions and
appropriations.
Slide 9 of 14
Fairness as a policy issue
• The idea of fairness is associated with:
– Reasonableness – an ability to give reasons that
can be accepted by intelligent and fair-minded
people as ‘reasonable’.
– Redistributive justice – where people get
rewards or penalties that they deserve; and do
not get rewards and penalties that they do not
deserve.
– Openness and accountability – allowing ready
access where justice can be seen to be done.
– Administrative simplification – where seeing
that justice is done depends on accounting
systems that avoid unnecessary complications.
Slide 10 of 14
UK 2008-9 OPSI - Re-Use PSI
COSTS:
Salaries
Property & Infrastructure
Other Running Costs
TOTAL COSTS
INCOME:
Royalties
Admin. Charges
£
771,000
184,000
218,000
£
1,173,000
(101,000)
(6,000)
TOTAL INCOME
(107,000)
TOTAL NET COSTS
1,066,000
Slide 11 of 12
Information & learning
• Public policy is inconsistent, incoherent,
inefficient and ineffective when:
– Governments promote activities associated
with education, training, research, public
libraries and archives at considerable cost in
the hope that individuals will be able to use
the information for personal and social
advantage; and
– Governments fail to promote learning
opportunities associated with re-use of PSI on
an as-is basis when it can be achieved at a
‘negligible cost’ to government.
Slide 12 of 14
Authority to produce & supply
• Authority to produce PSI can be:
– Explicit - either mandatory or permissible without
being mandatory - as in various forms of
registration, and formal monitoring and reporting
processes.
– Implicit - as a necessary element in performing an
authorised activity.
• Authority to supply PSI can be:
– Explicit – as in requirements for some information
to be publicly available or open to inspection.
– Implicit – as a necessary element in performing
an authorised activity.
• In the absence of formal authority and funding, either
producing or supplying PSI may be illegal.
Slide 13 of 14
Accounting and accountability
• If learning contributes to knowledge and human capital, who
owns it; and does ‘knowledge management’ have any practical
meaning?
• Acknowledging investment costs and current costs in producing
and conserving ‘informative symbolism’, are the symbols worth
anything without living human knowledge to aid in its
interpretation?
• Is information-bundling a form of value adding; and if the sum
is worth more than its parts, how can the elements of the
bundle be valued - separately and in combination?
• Given conceptual and measurement difficulties in saying what
knowledge is worth, does the idea of return on capital have any
practical meaning? If not, why use the idea?
• What does it mean to ‘maximise’ and how can it be decided
that an information policy will actually ‘maximise’ something –
‘value’ or ‘opportunity’, for example?
• Is human cognitive capacity a scarce resource, and what can
be done to make people ‘quicker on the uptake’? – Should this
be a central organising principle of information policy within a
‘knowledge economy’ and an ‘information society’?
Slide 14 of 14