Modernizing Government and Easing Regulatory Compliance With Open Data

The OPEN Government Data Act is the next step in bringing government into the 21st Century.

Earlier today, a broad coalition of supporters (including the Niskanen Center) released a letter supporting the Open, Permanent, Electronic, and Necessary (OPEN) Government Data Act. This bill builds on the reforms enacted by the passage of the DATA Act in 2014. It would make permanent the Obama Administration’s 2009 Open Government Data Directive a permanent fixture, establishing a unified, open data standard for government agency reporting.

As noted in a Data Foundation report, open data holds the potential to create:

a future that is more pragmatic, one in which we are able to manipulate and make comparisons across vastly different types of data in order to achieve remarkable insights. In such a future, we may be able to track federal dollars from Congressional authorization through the federal agencies all the way to specific programs and payments, or determine the number of people receiving assistance from multiple federal programs and assess whether those people are being well-served. We might be able to analyze data from previous natural disasters to understand exactly the resources needed to serve the affected population of a new one, or make accurate predictions for agriculture subsidy programs based on global weather and economics.

The OPEN Government Data Act will go a long way towards making that future a reality. It would embrace data openness: non-proprietary and machine-readable standards for government data sets published in an open format and under an open public license, for use by anyone. It also gives wide-berth for individual agencies to engage in collaborative partnerships with nonprofits, universities, and the private sector “to explore opportunities to leverage the public data assets of the agency in a manner that may provide new opportunities for innovation.” It would also help modernize the regulatory reporting process, easing compliance burdens on agencies and companies.

By embracing consistent, cross-agency data standards for regulatory compliance requirements — a practice known as Standard Business Reporting (SBR) — federal regulators can reduce the compliance burden imposed on the private sector. Australia’s SBR program, for example, is estimated to save businesses over $1 billion, annually.

Regulations cost American companies approximately $2 trillion every year, and the accumulated costs of regulation since 1980 cost the country $4 trillion in 2012 alone. By simply standardizing data formats across agencies, the government and private firms could save billions — possibly more. The first step towards automating regulatory compliance, and achieving those savings, requires open licensed, machine-readable, standardized data formats. The OPEN Government Data Act does precisely that, and the Congressional Budget Office’s assessment of the bill noted its passage and implementation “would not affect revenues.”

In addition to making compliance cheaper, SBR and open data have the added benefit of making fraud easier to identify, which could increase consumer trust in the market. And because businesses no longer have numerous non-standard compliance submissions that differ for every agency to which they submit reports, regulatory uncertainty diminishes and market playing fields are levelled for non-incumbent firms. In an environment of heightened certainty and increased trust, competition can flourish more freely.

In a recent op-ed for Axios, House Majority Leader Kevin McCarthy wrote: “Government has to get smarter. Disruption is happening all around us, and we can either harness it for the common good, or risk getting stuck in the past.” The OPEN Government Data Act fits squarely into McCarthy’s Innovation Initiative and can help “modernize government” — a key pillar of the Initiative that fits well with the bill’s focus on ensuring agency IT infrastructure is capable of supporting open data — in ways we cannot yet imagine.

Government can help drive a whole new era of data innovation with the OPEN Government Data Act, while driving down regulatory compliance costs for federal agencies and the private sector, at little to no cost to the taxpayer. It’s a win-win opportunity for taxpayers and corporations. It’s also likely to appeal to politicians looking for non-controversial, bipartisan opportunities for collaboration amidst the hyper-polarized political climate in Washington. By building on previous open data efforts, this bill will help ease regulatory compliance for regulators and firms, while catalyzing new market opportunities that make innovative use of government data.

Data is the fuel that powers the digital economy. If members of Congress want to keep that engine running, they should show their support for the OPEN Government Data Act.


Originally published at niskanencenter.org on April 5, 2017.

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