On Transparency and Independence

Abstract

Deputy Governor Qvigstad's lecture on transparency in Norges Bank invites us to reflect on the grounds for democracy – and its limitations.

In Norway, a number of bodies are kept independent of our elected politicians: the Supreme Court and international courts, a free media, researchers – and Norges Bank. In a democracy, all citizens are equal. Is there justification for some bodies to have such power yet be shielded from political control? When should essential public tasks be exempt from direct political control?

And even when some decisions are beyond political control, there is a difference between something occurring at arm’s length from politicians and a situation where the left hand does not know what the right hand is doing. Which brings us to another question: How transparent should these bodies be?

Norges Bank combines «undemocratic» independence with some degree of transparency about decisions and the decision-making basis. Both can be justified in a democracy. Let us first look at four arguments for independence, and which of these apply to Norges Bank; then four reasons for transparency, and ask which of these apply to Norges Bank.

I will conclude by discussing one possible change in the current practice: Should we have greater access to the reasons given and the votes cast by the individual members of the Executive Board in connection with the interest rate decision?