Freedom of Information and Security Intelligence: An economic analysis in an Australian context

Abstract

Australian discussions of information policy broadly accept the assumption that secrecy is necessary when national security is concerned. Despite greater transparency in other areas of information law, security and defence information has remained off limits to critical review. Australian intelligence agencies are not subject to the Australian Freedom of Information Act, and there is a low-threshold exclusion for defence and security related information.
The underlying assumption that secrecy is necessary and desirable can be challenged by applying concepts from information economics. Although some information asymmetry is unavoidable, Joseph Stiglitz has warned of inefficient rent-seeking which follows. Too much secrecy not only undermines democratic oversight, but also undermines the efficiency and effectiveness of national security processes. Moreover, these processes were designed for a cold-war world where information was a scarce resource.
As with other areas of government, greater transparency can lead to better outcomes in national security. Citizens can directly engage in the policy process, and may even be directly empowered to take direct action. The argument against transparency, that information may be used maliciously in the wrong hands, will only be the case in limited circumstances. The work of Peter Swire provides us with a basic calculus to determine when transparency will help, and when it will hinder security. This approach provides more coherent information policy and more effective national security.