The Impact of Open Government on Innovation: Does Government Transparency Drive Innovation?

Abstract

This study adds to the body of research on open government by empirically measuring the association of government transparency and innovation. The study uses Transparency International's Corruption Perceptions Index (CPI) as a proxy measure of government transparency. It assumes that an increase in government transparency increases applied innovation activity, which is measured as the number of annual patents by country residents. The study also tests whether the association is different for countries participating in the Open Government Partnership (OGP), a voluntary multi-stakeholder international collaboration of 63 countries who have committed to make their governments more transparent. The analysis uses fixed effects regression on panel data from 1996 to 2011 for 95 countries, including 54 OGP members. Although the empirical results do not support the hypothesis that transparency and innovation are positively correlated for countries participating in the OGP, this finding contributes to the literature on open government by making an initial attempt to quantify the association of transparency and innovation. Additional future research demonstrating a positive relationship between transparency and innovation could help to justify implementation of open government policies and participation in the Open Government Partnership.