The Economics of Diplomatic Secrecy

Writing about the recent WikiLeaks release of 250,000 State Department cables, Simon Jenkins of the Guardian noted:

Clearly, there is no longer such a thing as a safe electronic archive, whatever computing’s snake-oil salesmen claim. No organisation can treat digitised communication as confidential. An electronic secret is a contradiction in terms.

Given the global reach and lightening pace of politics in the 21st century, it is unlikely that the digital collection and transmission of diplomatic communication will cease. By revealing and exploiting inherent security weaknesses in digital communication, Wikileaks clearly hopes that this increase in transparency will lead to an increase in accountability. But how will diplomats and heads of state react?

Economics tells us that, in most cases, as the price of a commodity increases, demand for it decreases. Remember, price is not only counted in dollars, but also in transaction costs. Even if governments are willing to invest millions of dollars in more secure digital communications systems (multistage encryption, decryption keys changed every 24 hours) this also means decreased efficiency.

Some secrets may be so important that the government will seek to conceal them at any price, but overall, demand for secrecy is likely to fall. For many day-to-day interactions, diplomats may accept the risks of using quicker and less secure methods of communication (ie, the ones they have used thus far). They may accept the possibility of being brought to account for their words and actions.

By raisng the price of secrecy, Wikileaks is pushing for a new and more open default in international relations. The effects of this new default are as yet unknown.

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