Funding of a System of Key Registers Mbbl-2012

FUNDING OF A SYSTEM OF KEY REGISTERS IN A PSI-CONOMICS AND CONTEMPORARY PERSPECTIVE the Dutch experience in a Danish context

Historic evidence of cordial Danish-Dutch ties and cooperation: in 1658 they jointly beat the Swedes in the Battle of the Sound (painting by Jan Abrahamsz Beerstraaten, 1660)

By Marc de Vries Under an assignment from the Danish Ministry for Housing, Urban and Rural Affairs The Hague, Copenhagen 28 April 2012

FUNDING OF A SYSTEM OF KEY REGISTERS IN A PSI-CONOMICS AND CONTEMPORARY PERSPECTIVE – Marc de Vries

The

Du

tch

exp

erie

nce

in a

Dan

ish

co

nte

xt

2

2012 - FUNDING OF A SYSTEM OF KEY REGISTERS IN A PSI-CONOMICS AND CONTEMPORARY PERSPECTIVE - the Dutch experience in a Danish context

Author: Marc de Vries

This work is licensed under a Creative Commons Attribution 3.0 Unported License.

http://creativecommons.org/licenses/by/3.0/


The

Du

tch

exp

erie

nce

in a

Dan

ish

co

nte

xt

3

FOREWORD

The Danish challenge Extended use of authoritative basic data from public key registers, interconnected in a system (‘System of Key Registers’), is considered as a potential high value area in the Danish national strategy for digitalisation for 2011-2015. It is also recognised as a challenge to set up a financial scheme that, on the one hand, ensures a sustainable funding of this System of Key Registers and, on the other hand, allows public data to be widely shared within public administrations and enterprises. The point of Dutch-Danish comparison The Netherlands has been dealing with this challenge for quite some years. Only recently it decided to change the funding arrangements quite drastically, in essence, switching from user fees to State budget financing. This change is aimed at maximizing the overall revenue to society by encouraging much wider use of the System and the Key Register data in all possible aspects. Since the Dutch situation is quite similar to the Danish one in a number of ways, it is relevant to look at the parallels. The key message and audience Hence, and given the timeframe and the context of the Danish policy ambitions, this document aims to give decision makers an insight into the dynamics and dilemmas when balancing the financing of public key registers against broader societal values. The main ambition is to present the underlying economic and financial challenges in a sound professional and holistic way. The length of the article is justified by the complexity of the issue, which also requires it to be academic in some respects – but the key messages are highlighted in the executive summary. The framework for reference To that end this article explains the ‘laws’ governing the economics of public sector information (‘PSI-conomics’), providing an objective perspective and framework of reference for taking such decision. Furthermore, it provides a sneak preview of important European developments at hand, which will likely impact the Danish perspectives on the various available financing models. The structure and story line Accordingly, after setting the context and scene in Section 1, Section 2 briefly describes the contours of a System of Key Registers, its underlying principles and the trilemma – registration fees or user fees or State budget financing – faced by decision makers when considering the various financing options available. Section 3 then delves into the domain of PSI-conomics and highlights some other developments, jointly providing the reference framework for taking such decision. Subsequently, Section 4 briefly outlines the policy consequences of the financial arrangement advocated. The Annex holds a table comparing some overall figures for the Danish and Dutch financing of the key registers. Finally, the bibliography provides a comprehensive overview of relevant sources. The author The article has been written by Marc de Vries, an independent Dutch consultant, who has been working on re-use of public sector information – mainly on legal issues and economic effects – for over 15 years, for the Dutch government as well as European institutions and other Member States. Obviously, the views in this article represent those of the author.1

Søren Rude, Head of Division, The Danish Ministry for Housing, Urban and Rural Affairs

1 Any comments or views are cordially welcomed by the author ([email protected] and +31 653897002).

mailto:[email protected]

Table of contents

FOREWORD ...................................................................................................................................... 3

EXECUTIVE SUMMARY ...................................................................................................................... 5

1 DUTCH DANISH TIES – AND THE POINT OF THIS DOCUMENT .................................................... 7

1.1 Where it started............................................................................................................................... 7

1.2 Twelve years later ............................................................................................................................ 7

1.3 The point of synchronizing ............................................................................................................... 8

2 A SYSTEM OF KEY REGISTERS – CONTOURS, PRINCIPLES AND FINANCING MODELS .................. 9

2.1 Contours and principles of a System of Key Registers ........................................................................ 9

2.2 The costs of a System of Key Registers ............................................................................................ 10

2.3 The financing trilemma .................................................................................................................. 10

3 THE REFERENCE FRAMEWORK – ON WHAT TO BASE THE DECISION?...................................... 12

3.1 Introduction .................................................................................................................................. 12

3.2 The challenging paradigm of PSI-conomics ...................................................................................... 12

3.3 Other (non-economic) factors to take into account ......................................................................... 17

3.4 There is a clear business case for free use and re-use ...................................................................... 19

4 THE CONSEQUENCES – THE WAY AHEAD, HOW TO MAKE IT WORK? ...................................... 21

4.1 A System of Key Registers calls for a revised financing structure ...................................................... 21

4.2 Rechanneling money streams requires transition funding ............................................................... 21

4.3 New financing structure calls for new governance structure ............................................................ 22

4.4 Final observations .......................................................................................................................... 22

ANNEX 1: COMPARISON FUNDING KEY REGISTERS IN THE NETHERLANDS AND DENMARK ............ 23

BIBLIOGRAPHY ............................................................................................................................... 25


The

Du

tch

exp

erie

nce

in a

Dan

ish

co

nte

xt

5

EXECUTIVE SUMMARY

Key Register – what is that? Briefly put a Key Register is a high quality database that constitutes the sole source of data for the performance of governmental statutory duties. Accordingly, governmental organisations are under the obligation to avail themselves of only these sources and citizens and companies cannot be requested to submit these data more than once. Typically, Key Registers hold essential and frequently used public sector information pertaining to persons, companies, land, buildings and other ‘infrastructural’ elements critical to the proper functioning of government. Some important Key Registers in Denmark are the Central Business Register (CVR), the Danish Cadastral Map and Register, the Danish Civil Registration System (CPR), the Danish collection of topographical maps and the Danish Building and Dwelling Register (BBR) Establishing a System of Key Registers requires a decision on the financing arrangements up-front The Danes and the Dutch have been monitoring each other closely while building their Key Registers. Since the Dutch have progressed significantly over the last 10 years, it is valid to look at the lessons learned, as the relevant characteristics of both countries are quite similar. This particularly applies to the challenging issue of designing and implementing a sustainable long-term financial arrangement that supports the proper setup and functioning of a System of Key Registers. Three options available: a trilemma When designing the financing arrangement for a System of Key Registers, there are three (non-exclusive) options: (a) the data holder charges the entity that registers and updates the data; (b) the data holder charges the user; or (c) the data holder is paid from the State budget. This, in essence, represents a ‘financing trilemma’. So what should be the yardsticks and the points of reference when addressing this trilemma? The essence of the System, European PSI-conomics developments point the way ahead From a purely economic perspective, a System of Key Registers is best financed through general taxation from the State budget, as opposed to charging the users. This is because of the peculiar economic characteristics of public sector information (PSI-conomics). Furthermore, there are other strong arguments for State budget funding, one being the proposal for a new PSI Directive (advocating a maximum charge equal to marginal costs) and the mere essence of a System of Key Registers, seeking the widest use possible. Possibly this financing arrangement could be complemented by a registration fee, although this would only apply to those Key Registers where the registrants conceive the registration as a benefit, turning the registration fee into a retribution, rather than a taxation. Today, the Danish business model is a mix, with significant financing from registration fees and user charges. Following the logic of PSI-conomics, there is a challenge calling for a fundamental change. Rechanneling resources requires sound phasing, transitory measures and new governance This fundamental change in business model will call for a rechanneling of cash streams requiring transitional financial arrangements to be put in place by the Treasury. Simultaneously, where the traditional budget holders (the users) lose their financial power to call the shots, this vacuum needs to be filled through a new governance structure and model, materialized by a Program Committee for a System of Key Registers. In such a Program Committee, a strong coordinating role should be given to the Treasury in collaboration with the Agency running the shared services. Users should define service levels and Key Register data holders should be fully transparent as to their operational costs and budgets, which should be monitored and controlled by the Ministries responsible.


The

Du

tch

exp

erie

nce

in a

Dan

ish

co

nte

xt

6

Creating national infrastructure: no guts no glory! Finally, it is important to realize that setting up a System of Key Registers is in essence comparable to the creation of infrastructure. Likewise and problematically, investments are high and up-front and returns will emerge only later and may be hard to assess monetarily. However, the sheer impossibility of imagining not having them – electricity, water works, railroads – makes the needs and socio-economic benefits self-explanatory. Embarking on this mission calls for a head start. Where money makes the world go round, dealing with the financial challenges up-front and consistently will be a first and important step forward!


The

Du

tch

exp

erie

nce

in a

Dan

ish

co

nte

xt

7

1 DUTCH DANISH TIES – AND THE POINT OF THIS DOCUMENT

Essence: The Danes and the Dutch have been monitoring each other closely while building their Key Registers. Since the Dutch have progressed significantly over the last 10 years, it is valid to look at the lessons learned, as the relevant characteristics of both countries are quite similar. This particularly applies to the challenging issue of designing and implementing a sustainable long-term financial arrangement that supports the proper setup and functioning of a System of Key Registers since the Dutch experience demonstrates that this essential building block is to be put in right up-front.

1.1 Where it started

In early 2000 the Dutch government started to develop the concept of creating a System of Key Registers. In search of good practices and inspiration, on 3 and 4 May 2001 a Dutch delegation of five civil servants from the Ministry of the Interior and the Program ‘Streamlining of Key Registers’, visited Copenhagen, meeting up with senior representatives of the Ministry of Housing and Urban Affairs, the Ministry of Research and Information Technology, the Cadastre and the Municipality of Copenhagen. Interestingly, the report on this Tour notices that “from the outset it has been clear that there are large similarities between the developments in Denmark and the ambitions of the Dutch Program ‘Streamlining of Key Registers’. However, the talks have demonstrated that Denmark is far ahead of the Netherlands”.2 Accordingly, the Dutch embarked on a mission to catch up with the Danes and to establish a System of Key Registers. To that end and following a strong political commitment underlining the societal need, the Dutch Government intensified its efforts, dedicating a second Program of Streamlining of Key Registers (2002-2004) and, as of 2006, bringing the implementation under the responsibility of the Ministry of the Interior and Kingdom Affairs and creating a governance structure pulling in a wide array of stakeholders including data holders (like the Cadastre, the Chamber of Commerce, the municipalities) and users (like the Tax Office, municipalities, social security agencies).

2 Verslag van een werkbezoek op 3 en 4 mei 2001 aan Denemarken in het kader van de verkenning Internationale aspecten in het kader van het programma Stroomlijning Basisgegevens (in Dutch), N. Ducastel, 11 May 2001.

1.2 Twelve years later

With the Dutch dashing off, the Danes moved on to modernizing and increasing the quality of existing Key Registers, with less focus on the System, i.e. the overarching connection of these Key Registers. However, since the need and benefits for this is becoming increasingly evident, the Danish government has now embarked on a mission to establish a System of Key Registers, as described in its ‘National Strategy for Digitisation for 2011-2015’, assigning the coordination to the Danish Ministry of Finance (Agency of Digitalisation). Having witnessed the Dutch progress and remembering the cordial Dutch-Danish ties of 12 years earlier, on 1 and 2 February 2012, a delegation of 30 Danish Key Register stakeholders participated in the ‘Dutch Danish Key Registers Tour 2012’, meeting up with their Dutch peers. Discussing the main building blocks required to establish a System of Key Registers, the Dutch strongly advised their Danish friends not to procrastinate the fundamental issue of financing the System. Learning the hard way, it was only at the end of 2011 that the Dutch managed to reach a consensus on this matter, having grappled with this hot potato for many years, seriously impacting the sound and swift development and proper use of the System. Therefore, the Dutch warned the Danes not to underestimate and stall this issue. If a wide use and re-use and sharing of Key Register data within and, where possible, outside the public sector is the objective, then the design of a sustainable long-term financial arrangement that supports the proper setup and functioning of the System is a truly essential building block to be put in place up-front.


The

Du

tch

exp

erie

nce

in a

Dan

ish

co

nte

xt

8

1.3 The point of synchronizing

Putting one and one together, the point for this paper is evident. Given that the Dutch have made significant progress in establishing a System and that they recently took fundamental political decisions as to the financing model thereof, Denmark may be able to benefit from the underlying analysis made by the Dutch. This particularly makes sense since the characteristics of both

countries are quite similar in terms of administrative culture, governmental structure, technological information, infrastructure, economic and societal challenges, and subsequent policy ambitions. Therefore, this paper outlines the background and the principles of the new Dutch scheme, allowing Denmark to make the comparison, draw from the lessons learned and take a sound decision.

2 A SYSTEM OF KEY REGISTERS – CONTOURS, PRINCIPLES AND FINANCING MODELS

Essence: When designing the financing arrangement for a System of Key Registers, essentially there are three (non-exclusive) options: (a) the data holder charges the entity that registers and updates the data; (b) the data holder charges the user; or (c) the data holder is paid from the State budget. Getting to grips with this ‘financing trilemma’ requires some basic insight into the contours of a System of Key Registers and its underlying principles.

2.1 Contours and principles of a System

of Key Registers

The rationale for establishing a System of Key Registers is the notion that it is in fact infrastructure that is indispensible for fulfilling governmental policy ambitions and societal needs in the context of the evolving (digital) relationship between a government and its citizens and companies. This is based on a set of five underlying principles governing this relationship, being that a government should: - not ask for what is already known; - offer quick and good services; - not allow itself to be misled; - know its facts; and - feed the community with confidence. Likewise, the four benefits are self-explanatory: Chart 1: the Dutch System of Key Registers

- a direct reduction of the administrative burden imposed on citizens and the business community;

- a structural cost reduction within the government due to streamlining of data management, leading to a more lean and effective government;

- more governmental efficiency where enforcement and supervision of compliance of rules (e.g. combating fraud) becomes easier; and

- socio-economic gains since governmental services can be provided proactively and tailored to the needs of citizens and companies.

Using the Dutch System of Key Registers as a point of reference, it currently connects 12 Key Registers (including the five ‘basic’ ones, being: the Trade Register, the Cadastral registrations, the Municipal Basic registration (Citizens), the Topographical map and the Key Register of Buildings and Addresses) through so called ‘shared services’

The five core registers of the system

Dutch Danish

BGT (a similar) Danish collection of topographical maps

BAG BBR (Building and Dwelling Register)

BRK Cadastral Map and Register

NHR CVR (Central Business Register)

GBA CPR (Civil Registration System)


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

10

2.2 The costs of a System of Key

Registers

Establishing and running a System of Key Registers will require financial resources, which can be divided into three categories: 1. funds needed to cover the costs of the

program to design and implement the System;

2. funds needed to cover the initial investment to build the infrastructure and connect the Key Registers to the System; and

3. once up and running, funds needed to cover the operational costs of the System, including depreciation costs of the System, and costs related to maintenance of the shared services and provision of services to the users.

The first category can be regarded as one-off cash needs, financed from the general budget, and should best be left out of the equation – at least that is what the Dutch did – once the System was established. The second category requires extensive cash up-front and would blur the political business case if fully

activated as costs in the profit and loss account in the first year. Rather, it should be regarded as an investment (covered by a loan or other State financial arrangement), leading to a yearly depreciation cost (and possibly some interest costs), to be included in the last category. This last category is in fact the challenging one, bringing up the question of who should cover the costs thereof. This category is therefore at the heart of this article.

2.3 The financing trilemma

So running a System of Key Registers will require resources that need to be paid for. This brings up the question of how these resources need to be financed. Before getting to the framework of weighing the options available, we first need to establish what the various options are: what kind of financing facilities can be relied on when establishing a System of Key Registers. Briefly put there are essentially three (non-exclusive) options available, as illustrated in Chart 2.

Chart 2: the three financing options: registration fee, user fee, State budget


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

11

a. the data holder charges the entity that registers and updates the Key Register This option is traditionally imposed as a fee for new registrations or changes in the registration. Such charges can also be imposed on users inside the government reporting modifications or mistakes in the Register. So in essence, the financing model connects to the front end of the business process of the Register, i.e. where data come in or are updated. A Danish example is the Cadastre (Matriklen) that imposes a fee for changes in the cadastral registration. b. the data holder charges the user of the Key Register In the second option the data holder relies on charging users of the data. This means that the data holder determines a price, or a range of prices, for the various quantities and formats of data delivered. Such prices can differ between types of users. Many of the Danish Key Registers follow this charging model. This includes the Central Business Register (CVR), the Civil Registration System (CPR), the Cadastre and the topographical maps/data. However, the charges (and use conditions) imposed on users inside the government are different from those that users outside the government (like banks and insurance companies) are required to pay. Regardless of the user (public or private), this financing model hooks on to output of the data holder, allocating the costs over those that need or want to avail themselves of the data (either under a public task obligation or for the sake of re-using those data in their business processes). c. the data holder is paid from the State budget Finally, there is the option to facilitate direct financing from the State budget. As such there is no direct relation between the budget and the input and output of the data holder, but

rather on a regular (yearly) assessment of cash required to run the operation. The costs are not passed on to the entities registering or updating registrations or to the users of the data, but are divided among all tax payers. No charge is imposed for the use or re-use of the data – neither on public users nor on private sector re-users. This model is currently only applied to few of the Danish Key Registers in a limited way. For example: - The Building and Dwelling Register (BBR) is

financed by a fixed payment by the municipalities (local governments) under an agreement with the central government whereby a fee is paid on the basis of a national scheme. As this payment is mandatory, the incentives are similar to a scheme where costs are covered under the State budget, ensuring that data is available free of charge for public and private use and re-use.

- The National Survey and Cadastre has introduced a subscription scheme based on fixed payment for public sector use. This allows state agencies, the regional authorities and the municipalities to utilize the products/data (for instance cadastral and topographical maps) without further charging. It is still regarded as a user charge, but the incentives for public use are to a large extent comparable to financing from the State budget.

- Traditional financing by appropriation by the Financial Act are also seen, primarily as partial funding.

Brought back to its essence: given the Danish policy ambitions, the characteristics of a System of Key Registers and the three financing options available, what is, objectively, the best financing arrangement to put in place? For that we need a framework of reference, which we accordingly look into in the next section.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

12

3 THE REFERENCE FRAMEWORK – ON WHAT TO BASE THE DECISION?

Essence: From a purely economic perspective, a System of Key Registers is best financed through general taxation from the State budget, as opposed to charging the users. This is because of the peculiar economic characteristics of public sector information (PSI-conomics). Furthermore, there are other strong arguments for State budget funding, one being the proposal for a new PSI Directive (advocating a maximum charge equal to marginal costs) and the mere essence of a System of Key Registers, seeking the widest use possible. Possibly this financing arrangement could be complemented by a registration fee, although this would only apply to those Key Registers where the registrants conceive the registration as a benefit, turning the registration fee into a retribution, rather than a taxation. Today, the Danish business model is a mix, with significant financing from registration fees and user charges. Following the logic of PSI-conomics, there is a challenge calling for a fundamental change.

3.1 Introduction

In the previous section we have seen that there are basically three options to finance the operation of a System of Key Registers: (a) charging those that register and/or update the data, (b) charging the users of the data, and (c) using tax payers’ money from the State budget. In the following paragraphs we will seek economic points of reference to decide on what to base the decision. Accordingly, these points of reference centres the underlying assumptions of economic theory: productive resources are scarce and have alternative uses, forcing economic actors (consumers, companies and governments) to choose between these alternatives in a rational manner to maximise benefits. Apart from the arguments deriving from PSI-conomics, there are other, non-economic issues and developments that should also be taken into account when taking a decision on the financing arrangements. In that context, the last paragraph looks at the policy actions coming from Brussels, directly affecting this dossier, as well as the very essence of having a System of Key Registers, which should also be a point of reference.

3.2 The challenging paradigm of PSI-

conomics

3.2.1 PSI characteristics

Public sector information (including data from Key Registers, which is public sector information par excellence) is an informational good, a good produced by the public sector

and consumed both within and outside the public sector. These features cause ‘classic’ economic laws to work very differently, in comparison with a physical product produced and sold by a company. The differences in economic ‘behaviour’ of public sector information are caused by two characteristics: non-rivalry and non-excludability. Public sector information is non-rivalrous, meaning that it can be consumed by one person without detracting from the consumption benefit enjoyed by any other consumer. In other words, use of public sector information by one is not to the detriment of the others. Furthermore, by their very nature, informational products are, in principle, non-excludable: it is difficult to include one user while excluding others. Where providers of information try to do so, they tend to rely on limiting access, exercising of intellectual property rights and charging. Obviously, this comes at a cost, since information, by its very nature, seeks to disperse. Preventing and controlling this will consume economic resources. If a good is non-rivalrous and non-excludable, the private sector is not likely to produce an adequate supply of such goods. Herein lies the rationalization for public provision of these goods, especially where they also have recognized social value and positive externalities. Public broadcasting, national defence, lighthouses and, of course, Key Registers, are perfect examples of such public goods.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

13

Justification for charging of public goods is usually based on the so-called benefit principle: public services are charged for in a way that those who benefit (more) pay (more). This principle encourages those who benefit to appreciate that there are resource costs involved and it decreases the taxation burden on those who do not benefit. It takes the detrimental effects into the bargain: some users lose out as they do not want to pay the price. So in essence the dilemma is: what is more important: equity considerations, which require the beneficiary to pay, or efficiency considerations, where all taxed pay and where the underutilization of the service needs to weighed against the distortions associated with general taxation. These characteristics have significant implications when considering the financing model for Key Registers and of course a System of Key Registers.

3.2.2 Economic implications

a. The invisible hand does not work In economic theory the allocation role of prices requires that they be set equal to marginal cost to achieve economic efficiency: a producer of a good will continue to increase production as long as the increase in returns exceeds the costs for producing an extra unit. Accordingly, prices move to the level where they equal the marginal costs and maximize the efficiency. Interestingly, a key feature of public goods is that for any level of production, the cost of providing it to an additional consumer – the marginal production costs – is (close to) zero. This implies that charging for them is never economically efficient, since some users are prevented from enjoying the good even though their consumption of the good would not generate any extra (marginal) cost. Accordingly, goods are not purchased and, as a result, they do not provide benefits to society and lead to wasteful overproduction. b. Pricing lacks factual basis According to neoclassical economists, by allowing prices to move freely the supply of

any given commodity will ultimately match demand. Accordingly, (a) prices determine what goods are to be produced and in what quantities, (b) they determine how the goods are to be produced, and (c) they determine who will get the goods. Following these assumptions, economic actors would respond to lowered demand by increasing the price per unit (and vice versa), by lowering production, and thus increase efficiency. However, in real life, and in particular where it concerns production of Key Register data, publicly produced public goods and services are not subject to market forces. The government is a monopoly supplier and demand is generally inelastic. Thus, user charges cannot truly reflect demand, since the governmental offer cannot be refused. If market oriented pricing does not work, one can also rely on cost-benefit pricing. Cost-benefit pricing is based on the analysis whereby the equivalent money value of the benefits and costs to the community of a certain project are compared in order to ascertain whether it is economically worthwhile to pursue. However, one of the problems is that although the computation of many components of benefits and costs is intuitively obvious there are others for which intuition fails to suggest methods of measurement. Likewise, assigning costs and benefits for the production of public goods, setting up and using a System of Key Registers included, is burdensome and largely arbitrary. So, as a consequence, if the information for setting efficient charges is not available, the yardstick for taking well-founded decisions is not available, which makes it impossible to assess whether the ‘right’ decision has been taken. c. Cost structure calls for mass production Producing information features a radically different cost structure than for physical goods. First, information is costly to produce and cheap to reproduce, featuring high ‘first-copy costs’ but low ‘second copy costs’, since the variable cost of the production and


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

14

distribution of an extra unit, in particular in a digital and networked environment, does not increase, even if it concerns large amounts. So, generally speaking, the cost per extra unit sold is fairly stable irrespective of whether 2 copies or 2 billion copies are made. Further, the (large) fixed costs of information production are regarded as so-called ‘sunk costs’. Sunk costs are costs resulting from past decisions and cannot be recovered if production is halted. Accordingly, they can be ignored when making new decisions about production, since they no longer represent meaningful alternatives. The impact on data from Key Registers is evident: they have been produced already (sunk costs), second copies and distribution thereof hardly lead to extra costs. Accordingly, economists argue that the greatest social benefit is achieved when such goods are priced at marginal cost because there is little or no incremental cost in disseminating information widely. d. Charging comes at a cost First, charging users entails transaction costs, being out-of-pocket costs to the seller and the buyer, since it requires recording and collecting and recording and payment, respectively. Second, charging only works if the free flow of information is disabled, as otherwise buyers will pass on the information to subsequent buyers, underselling the original provider. Where providers of information try to do so, they tend to rely on limiting access and/or exercising intellectual property rights (copyrights and data base rights in particular). As these barriers only

work if rights are enforced, this requires monitoring and policing, creating an extra overhead. Third, setting up and running such charging arrangement represents opportunity costs where those involved might be able to use the resources consumed in another way, yielding other benefits. In other words: charging is costly. e. Marginal cost and zero cost pricing makes sense Where does this lead us? Chart 3 visualizes the supply and demand curve and cost structure in a monopolistic market for governmental information goods. ‘Normal’ (non-governmental) monopolists would seek “point a” (quantity Qm, against price Pm) on the demand curve, maximizing profits, but causing a deadweight loss (equal to the size of the triangle abc and representing the allocative inefficiency that occurs since the equilibrium where demand meets supply is not matched). Governments, however, will likely seek “point d” (quantity Qr, against price Pr, breaking even, reducing the deadweight loss to the size of triangle cde) or even “point c” (quantity Qc, against price Pc, where the marginal costs are equal to the average costs, eliminating the deadweight loss all together, but no longer fully covering the average costs, requiring some tax money to subsidize the losses). Where the marginal transaction costs (sending bills, monitoring payment, etc.) are relatively high, governments may decide to drop charging all together (Po), moving to zero costs charging and covering all costs from general taxes.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

15

Chart 3: supply and demand and cost structure in a monopolistic market for governmental information goods. f. Collateral damage is limited Where the consequence of following the efficiency principle is in fact that public goods are priced at the level of marginal costs, which in a digital environment equals zero, obviously such price setting would heavily affect the position of competitors in the upstream market (see chart 2).

There are certain public sector information domains where we witness this, for instance in the field of geographic information, whereby Open Street Map and Google Maps offer alternatives for governmental topographic information. Arguably, if the public sector information provider is under the legal obligation to underprice, this will have detrimental effects on companies competing with the public sector body in the upstream market. Interestingly, however, looking at upstream services like Google Maps they (also) come for free, or at least are based on income models other than selling the content. In any case, in the field of production and maintenance of data from Key Registers there appears to be no upstream competition, since it is considered to be in the core of the public

task, essential to a proper functioning of government. Accordingly, dropping user charges for use of Key Register data would not cause any collateral damage. g. Downstream effects of third-party re-use Increasingly, governments are deciding to ban internal charging (on the grounds described above), but appear to be more hesitant about not charging for re-use3 outside the public sector. Applying such user charges governments tend to rely on intellectual property rights. Since the data are (partly) disallowed from flowing freely downstream, or rather from networking, effects are limited. Looking more closely at the re-users, for about two years now, new kids on the block are knocking on the door (the low-end market

3 ‘Re-use’ is a term taken from the European PSI

Directive, being the use of public sector information, mostly by an organisation other than the data holder and mostly outside the public sector. Use of public sector information by public sector bodies other than the data holder – the main reason for creating a System of Key Registers – is therefore not considered re-use, but simply use, since it concerns exchange of information between public sector bodies within the framework of their public tasks. Therefore, when speaking of market potential and use outside the government, the term ‘re-use’ is justified.

Symbol(s) explanation

D Demand curve

MC Marginal costs curve

AC Average costs curve

MR Marginal revenue curve

Qm, Pm Price and quantity a monopolistic supplier would normally offer, creating a deadweight loss of the size of triangle abc

Qr, Pr Price and quantity a governmental monopolistic supplier would offer, in search of breaking even, reducing the deadweight loss of the size of triangle cde

Qc, Pc Price and quantity a governmental monopolistic supplier would offer, eliminating the deadweight loss all together, but requiring some cost recovery from the State budget (taxes)

Qo, Po Price and quantity a governmental monopolistic supplier offers when it considers the economic benefits from zero pricing higher than from charging any price, fully relying on the State budget


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

16

re-users). These new re-users are fundamentally differing from the ‘old’ re-users (the high-end market re-users), as Chart 4 demonstrates. The high-end market typically consists of re-users that provide their public sector information based services to professional clients. Substantial value is added by re-users

serving the needs of specific professional clients. A typical example is a meteorological company that provides very detailed weather forecasts to oil rigs, based on its own high-tech forecast models. The high-end market services are highly targeted, the number of clients is relatively low and yet the value of each transaction is high.

Chart 4: High-end and low-end re-use markets

Conversely, in the low-end market, business models are based on reaching out to large volumes of (generally non-professional) consumers who use high traffic web services and apps on mobile devices. Typically, these re-users merely mash up the public sector information with other free content and integrate it into services, not adding much value, other than distributing it widely. The re-users’ revenues come from third-party advertisements, not from its users. Recent studies acknowledge that re-use, and in particular the low-end market, features enormous socio-economic benefits through their so-called long-term effects, representing the consumer surplus ready to be cashed in

on.4

The link with data from Key Registers is evident: due to their high quality and

4 MEPSIR 2006, OECD 2006, Vickery 2011, POPSIS 2011,

see list of sources for official references.

comprehensive nature Key Registers have significant potential to serve as a basis for private sector players – in particular those on the low-end market, able and willing to open up dormant consumer surplus – to use Key

Register data for new services and apps.5

Charging and (consequently) applying intellectual property rights will likely hamper such development and comes at a social cost where extra tax returns and employment are missed out on. h. Liberalized re-use regime effects on own exploitation are marginal Obviously, when a Key Register data holder lowers its charges to the level of marginal costs, also towards private sector re-users, this will impact the revenue stream generated by its own exploitation. This particularly plays a role when such data holder is adding value

5

Obviously, this re-use potential can only be cashed in on where it concerns Key Registers that are legitimately re-usable, thus excluding those registers holding personal data (like the Key Register of Citizens).


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

17

to the data itself in the downstream market in competition with private sector players. Quite often the data holder has become reliant on these incomes, that is, it is cross-subsidizing its commercial activities with its public task activities. In such cases, the data holder will try to charge high prices for its raw data allowing it to cut prices in the added value market. From an economic perspective, such a setup is inefficient. Breaking this deadlock will require transitional funding since moving to lowered charges will affect the cash position of the data holder as it will get returns only later. Furthermore, these will accrue mostly outside its accounts (since they will substantiate within the tax authorities, through increased tax returns). Recent studies confirm however that re-use-related revenues of public sector bodies range from relatively small to extremely small when compared to the full budget concerned, further underlining the point of moving to marginal or zero cost charging.6 i. Registration fees require a clear cost-benefit relationship So far we have largely focused on the dilemma of user fees versus funding from the State budget. However, there is a third option – turning the dilemma into a trilemma – being charging those that register and update the data. In essence, a registration fee is a specific tax levied by a government in return for a service rendered to an individual (citizen or company), as opposed to general taxes that do not feature any (direct) performance in return. This is the legitimacy of retribution: payment corresponds directly to a benefit acquired. Accordingly, the question is whether the (often compulsory) registration in Key Registers provides a title to levy retributions. One could argue that quite often this is the case: registration in the company register allows this company to take part in business transactions, registration in the cadastre gives legal protection of property and so on.

6 Vickery 2011, POPSIS 2011, see list of sources for

official references.

However, the charging level is not unlimited; rather, it needs to cover the costs of providing the benefits, so that the registration fee can never be turned into a ‘cash cow’ financing the full operation of the System of Key Registers. Another point of consideration is whether the act of levying registration fees is in fact efficient. When the population of persons on whom the levy is imposed (almost) coincides with a population that is already subject to other forms of taxation (like income tax for citizens or corporate taxes for businesses), then one can wonder whether it makes sense to have these retributions, instead of including them in the existing general tax streams. However, apart from these two general observations, there does not seem to be a principle-based argument against levying such retributions. This of course does not apply to governmental organisations availing themselves of the Key Register data. If they are charged for reporting back (updating) mistakes or omissions – essential for quality maintenance – this will represent a rather perverse incentive, discouraging such behaviour. They should rather be rewarded for their efforts of ensuring the quality of the data and for enhancing the functioning of the System as a whole. In summary, a registration fee could be a source for funding but can only apply to those Key Registers where the registrants conceive the registration as a benefit, turning the registration fee into a retribution. Charges should not be levied on updaters with the public sector, as this would contradict the rationale of having a System of Key Registers and will affect the data quality.

3.3 Other (non-economic) factors to take

into account

Apart from the arguments related to PSI-conomics, there are two other important points of reference: the initiative to further legislate public sector information re-use at a European level and the very essence of having a System of Key Registers.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

18

3.3.1 The European policy context

Connecting to the Open Data movement, it is the intention of the European Commission to further legislate re-use of public sector information. To that end it launched a proposal for a new PSI Directive7 as part of the Digital Agenda for Europe (key action 1c) and the Europe 2020 Strategy aiming for smart, sustainable and inclusive growth.8 In this context, the amendment of article 6 ‘the principles governing charging’ (see Chart 5 listing the old and new text) is of importance. It holds that where charges are made for re-use, they should in principle be limited to the marginal costs incurred for reproduction of documents and their dissemination, unless exceptionally justified according to objective, transparent and verifiable criteria

Chart 5: the old and newly proposed article 6 of the PSI Directive

7 European Commission, Proposal for a directive of the European Parliament and of the Council amending Directive 2003/98/EC on the re-use of public sector information of 12 December 2011. 8 http://ec.europa.eu/information_society/digital-agenda/index_en.htm.

According to Recital 12 of the proposal, such exception could apply to those public sector bodies that would go out of business when implementing the marginal charges regime, as they are covering a substantial part of their operating costs from the exploitation of their public sector information. The burden of proving that charges are cost-oriented and comply with relevant limits should lie with the public sector body charging for the re-use of documents. Still, the new proposal does not – as the existing directive – allow public bodies to refer to the need for “a reasonable return on investment” when charging. The Directive only applies to re-use, being, in principle, use by non-governmental entities (mostly companies, seeking to base their business on the data). Accordingly, it does not affect the charging potential within the government. External charging, however, is affected, since the new proposal, if adopted, will limit the revenues that can be generated through charging for external re-use. This means that, if one opted for charging user fees, this charging maximum has to be taken into the equation when setting the budgets.

3.3.2 The essence of being a System of Key

Registers

a. Increased use is the perspective, so why create barriers Finally, there is an argument inherent to the essence of creating a System of Key Registers. As we saw above, a System of Key Registers aims to enable the government to be efficient, to respond swiftly to the needs of citizens and companies, to know the relevant facts and, accordingly, does not allow itself to be mislead. The essence of the System and rationale for its establishment is the widest possible use and the sharing of Key Register data. Such sharing is the entire point of creating it and this is why internal use within the government is made compulsory. Hence, any threshold that discourages such wide use is contrary to the very essence of creating a System of Key Registers.

Article 6 - 2003 PSI Directive

1. Where charges are made, the total income from supplying and allowing re-use of documents shall not exceed the cost of collection, production, reproduction and dissemination, together with a reasonable return on investment. Charges should be cost-oriented over the appropriate accounting period and calculated in line with the accounting principles applicable to the public sector bodies involved.

Article 6 - 2011 proposal for a PSI Directive

1. Where charges are made for the re-use of documents, the total amount charged by public sector bodies shall be limited to the marginal costs incurred for their reproduction and dissemination. 2. In exceptional cases, in particular where public sector bodies generate a substantial part of their operating costs relating to the performance of their public service tasks from the exploitation of their intellectual property rights, public sector bodies may be allowed to charge for the re-use of documents over and above the marginal costs, according to objective, transparent and verifiable criteria, provided this is in the public interest and subject to the approval of the independent authority referred to in Article 4(4), and without prejudice to paragraphs 3 and 4 of this Article. 3. ... 4. The burden of proving that charges comply with this Article shall lie with the public sector body charging for re-use


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

19

Obviously, charging requires the user to give up resources to avail itself of the benefits of the System. Accordingly, the user will be inclined to limit its use of the System, where its resources are scarce. Therefore, user charging is contrary to the objective and potential effects of having a System of Key Registers in place. Furthermore, wide use of Key Register data has another interesting effect: it turns into a self-propelling quality control mechanism as users will notice if data do not match reality and will accordingly report back to the Key Register holder (or the shared service), requesting that the mistakes encountered are appropriately addressed. On the same note, charging for registration (or updating of this registration) does not stimulate users or those (to be) registered to actually register and update the data. In particular, public sector bodies noticing mistakes in the Key Register should not be discouraged from reporting errors, as they turn out to be the quality controllers of the System. In fact, one could consider rewarding these users, as they enhance the quality and allow the data holder to (partly) outsource this task. In this context, it is essential to appreciate that quality is the key element for the proper and sound functioning of a System of Key Registers. Without that, trust in the System will deteriorate rapidly, and users will be tempted to evade compulsory use and will

instead set up shadow repositories of data, making the System useless and a waste of governmental resources. b. Speed and comprehensiveness ask for simplicity The basic concept behind the notion of a ‘System’ is that it will absorb the various data sets of the, previously isolated, Key Registers blurring the demarcation lines and sharing information resources. Accordingly, the business cases for individual Key Registers will fade, where users will need to avail themselves of data from various Registers in the form of one transaction. Having separated and differing charging mechanisms will not serve clients’ needs, as they are looking for transparency and above all simplicity as opposed to heavy and complicated internal charging mechanisms, which may need to be updated regularly where consumed quantities may differ over time and due to technological developments.

3.4 There is a clear business case for free

use and re-use

Returning to the trilemma, Chart 6 captures the main conclusions. Fullstop symbols are placed by the use of registration fees within public sectors and user fees in general. Registration fees for private sectors can be used in certain situations. In general, only State budget financing creates the wanted incentives.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

20

Chart 6: assessment of the three financing options: registration fee, user fee, State budget If we take the macro economic and social welfare of society as a whole as the starting point, then financing a System of Key Registers from general taxation appears to be most beneficial for welfare, as it distributes benefits across society efficiently. Cost-recovery does not; it raises extra costs and disallows the benefits from flowing freely. This financing arrangement could possibly be complemented by a registration fee, although this would only apply to those Key Registers where the registrants conceive the registration as a benefit, turning the

registration fee into a retribution, rather than a taxation. Apart from the PSI-conomics’ arguments there are other vectors pointing in the same direction. First, the EC initiative to propose a new PSI Directive which, as a rule disallows public sector bodies from recovering more than their marginal distribution costs. Second, the mere essence of the System is the widest use possible: any threshold discouraging such wide use is contrary to the rationale of creating a System of Key Registers.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

21

4 THE CONSEQUENCES – THE WAY AHEAD, HOW TO MAKE IT WORK?

Essence: Setting up a System of Key Registers requires a revised financial structure since the business cases of the, previously isolated, Key Register data holders (should) no longer prevail. This revised structure calls for a rechanneling of cash streams, requiring transitional financial arrangements to be put in place by the Treasury. Simultaneously, where the traditional budget holders (the users) lose their financial power to call the shots, this vacuum needs to be addressed through a new governance structure and model. In such a setup, a strong coordinating role should be given to the Treasury in collaboration with the Agency running the shared services. Users should define service levels and Key Register data holders should be fully transparent as to their operational costs and budgets, which should be monitored and controlled by the Ministries responsible.

4.1 A System of Key Registers calls for a

revised financing structure

In the previous section we saw that if one takes the proper functioning of the System as the key goal, then one needs a financing model that supports this objective. The specific laws of PSI-conomics advocate funding from the State budget, possibly complemented by retributions to be paid by those that register. Accordingly, revising the financing arrangements will be a major and crucial requirement for the establishment of a System of Key Registers, since the business case of the, previously isolated, Key Registers are turned upside down. The usage (in terms of users and in terms of intensity) is likely to increase significantly, where agencies must rely on one (external authentic) source, and can no longer use their own ‘copies’. Furthermore, the new users will include users ‘behind the first layer of users’, drawing data packages and pricing conditions out of their traditional context. Moreover, when building and maintaining shared services, the ‘overhead costs’ incurred need to be covered, bringing up the issue of allocation of those costs. Not harmonizing the conditions for use – leaving the divergent pricing and usage schemes intact – will impact the inclination of users to avail themselves of the System despite obligations to do so, not only affecting the business model but also the quality of the System (and underlying data). This gives the matter a sense of high urgency. The prospect of having to drop user charges seriously affects the main source of income of Key Register data holders and will likely cause

them significant concern, as they will not be able to recover their operational costs elsewhere. Possibly, this could affect their good spirits and deter them from contributing to the sound development of the System, which, from a micro perspective looks fairly rational. Since the establishment of the System requires a full buy-in from the Key Register data holders (next to others, in particular the users), procrastinating this decision is likely to backfire soon and without mercy.

4.2 Rechanneling money streams

requires transition funding

Accordingly, the Treasury becomes a very important partner in the start-up phase, since the cutting of user charges will need to be compensated from the State budget from the outset, since the returns of this operation (more efficiency, higher tax returns) will materialize later. This requires a ‘transitional arrangement’, allowing for the cross over. Based on a rough assessment of the current income streams of five highly relevant Danish Key Registers, the entire refinancing operation would entail an annual amount of 168 million Danish Krones (see Chart 8 Annex 1, being the sum of the incomes from private sector use (81 million Danish Krones) and public sector use (87 million Danish Krones)) to be funded by the Treasury at least in the first year (and likely to diminish in the years to come). Within the context of the current economic climate and the budgetary constraints, it will likely be best (and politically most feasible) to gradually phase in the changes needed. However, there


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

22

are no purely economic arguments to postpone the change in the funding scheme. Drawing the parallel, the Dutch have adopted a scheme whereby the internal charging for public use will be dropped first in 2013 (this should be budgetary neutral), followed by free external use planned in 2016. Of course this only applies to those Key Registers where such wide re-use is legitimate (exempting for instance the Key Register of citizens) and where a the business case can be made. To that end, a further impact assessment is foreseen as likely in the course of this year. The deficits incurred are to be structurally covered by the Treasury through the budgets of the Ministries responsible for the different Key Register holders. For the time being, registration fees remain untouched and the need to adapt or stop them will be assessed later. Obviously, this calls for full transparency of the costs and subsequent charges, reducing the risk of overcharging and cross-subsidizing. Possibly, the Danes may want to follow the same route.

4.3 New financing structure calls for new

governance structure

Where financial streams are diverted, existing governance structures will need to be adapted to the new situation. Within their context, the Dutch made the following analysis. Most importantly, the current users lose their position as data purchaser and the associated position of budget holder. This decline of power will need to be compensated, since the user and its needs must remain the yardstick for data quality, quantity and the functioning of the System. Hence, a collaborative framework needs to be put in place whereby Key Register data holders, users and the Agency running the shared services jointly establish the service levels needed. The

Ministries responsible will retain their monitoring and supervisory role, guarding the proper execution of the public task and the sound spending of resources by the Key Register data holders, obviously requiring full transparency. To ensure proper coordination and overall control, a Program Committee for the System of Key Registers is to be put in place in close collaboration with the Agency responsible for the running of the shared services. Representatives of the users need to establish a user board that is part of the Program Committee and that plays a crucial role in the Committee. Within the Program Committee, the Ministries responsible for the Key Register data holders will need to be fully accountable. Obviously, the Danish situation may differ; however, it is likely that the main elements would also apply there.

4.4 Final observations

Setting up a System of Key Registers is in essence comparable to the creation of extensive infrastructure. Problematically, investments are high and up-front and returns will emerge only later and may be hard to assess monetarily. However, the sheer impossibility of imagining not having them – electricity, water works, railroads – makes the needs and socio-economic benefits self-explanatory. Embarking on this mission calls for a head start. Where money makes the world go round, dealing with the financial challenges up-front and consistently will be a first and important step forward. Remembering their joint victory in the Battle of the Sound some 350 years ago, the Dutch will be happy to assist the Danes wherever and whenever they can!


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

23

ANNEX 1: COMPARISON FUNDING KEY REGISTERS IN THE NETHERLANDS AND DENMARK

Introductory remarks on the figures The Charts 7 and 8 below provide an overview of the funding of essential core Key Registers in the Netherlands and Denmark. It should be noted that the Dutch as well as the Danish figures are an illustration of the financial aspects and the relations between registers. The figures are an overview and not suitable for detailed investigations of the register budgets. Definitions of terms used - Registration fee: income generated by a fee charged by the Key Register holder to the entity

registering or updating the data, like a company registering in the company register so that this company can perform economic activities.

- Income public sector use: income generated by the Key Register holder under its public task by charging the public sector users for the use of the Key Register, like the Tax Office relying on data from the business register when levying corporate taxes.

- Income private sector use: income generated by the Key Register holder under its public task by charging the private sector users for the use of the Key Register, like civil notaries that rely on extracts from the cadastral register when transferring property.

- Income own re-use activities: income generated by the Key Register holder through its own commercial activities on the market, outside the public core task, like the business register holder selling bulk data to direct marketers.

- State budget: income from the general State budget, basically sourced directly from tax returns

Tables A. Netherlands

Key Registers Registration fee Income

public sector use

Income private

sector use

Income own market

orientated re-use

activities

State budget

Total Budget

Business registers 67,0 6,0 42,0 5,0 0 120,0

Cadastral registers 130,0 15,0 35,0 30,0 0 210,0

Topographical maps 0 9 0,5 0 14,0 24,0

Addresses 0 0 0 0 4,0 4,0

Totals 197,0 30,5 77,5 35,0 18,0 358,0

Chart 7: Dutch figures on funding of core Key Registers for 2010 (* 1 million euros)9

9 These figures are taken from the report ‘Wie van de Drie?’ (‘Who out of three?’ – referring to the trilemma described – which was drafted under an assignment of the Dutch Ministry of the Interior in September 2011)


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

24

B. Denmark

Key Registers Registration

fee

Income public sector

use

Income private

sector use

Income own market

orientated re-use

activities10

State budget

Total budget

Central Business Register (CVR)11

0 6,4 17,0 -- 0,0 23,4

Civil Registration System (CPR)12

0 44,6 43,4 -- 0,5 88,5

Cadastral Map and Register (Matriklen)13

29,5 10,5 12,9 -- 0,8 53,7

Topographical maps/data14

0 25,6 6,2 -- 3,0 34,8

Building and Dwelling Register (BBR and OIS), including addresses15

0 0,3 1,5 -- 24,0 25,8

Totals 29,5 87,4 81,0 -- 28,3 226,2

Chart 8: Danish figures on income of relevant Key Registers for 2010 (* 1 million Danish Krones, 1 Krones equals approximately 7,5 euros)16

10 ‘Income own market orientated re-use activities’ cannot be separated from income from public and private sector use, but is probably of limited size. 11 The Central Business Register (CVR) is fully financed by sales of CVR-data to public and private users. However, the public sector has free access to CVR data if used internally within the governmental organisations. The public sector organisations makes a yearly payment for the access, which corresponds to 30% of the costs in running the register. 12 The Civil Registration System (CPR) is with minor exception financed by sales of CPR-products to public and private users. 13 The Cadastral Map and Register (Matriklen) are financed by various sources: a registration fee; sales of products and distribution of measurement data to public and private users; a fixed yearly payment from state agencies, the regional authorities and the municipalities (the payment is placed under ‘public sector use’ but has similarities to ‘state budget’ financing as in many ways it is mandatory); an appropriation at the Danish Finance Act to the National Survey and Cadastre. The figures do not include income from military use. 14 Topographical maps/data are financed by various sources: sales of products to public and private users; a fixed yearly payment from state agencies, the regional authorities and the municipalities (the payment is placed under ‘public sector use’ but has similarities to ‘state budget’ financing as in many ways it is mandatory); an appropriation at the Danish Finance Act to the National Survey and Cadastre. The figures do not include income from military use. 15 Building and Dwelling Register (BBR and OIS). The BBR is financed by a fixed and mandatory yearly payment from the municipalities under an agreement with the State (this payment is placed under ‘state budget’) and an appropriation at the Danish Finance Act. The OIS is financed by an appropriation at the Danish Finance Act and payments for large data-transaction from public and private users. 16 Sources of these data are: ‘Annex 5.3 concerning description of dataset’, Danish Agency of Digitalisation of 28 November 2001 and personal information from the authorities with respect to the Cadastral Map and Register, the Topographical maps/data and the Building and Dwelling Register.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

25

BIBLIOGRAPHY

The books, articles and reports listed below are the main sources on the economic aspects surrounding use and re-use of public sector information. While drafting this report, a substantial amount has been consulted. 1. Aichholzer, G. and P.Tang (2004), Harnessing public sector information for general accessibility:

Austria and the UK, in Aichholzer G. and H. Burkert (Ed.), Public Sector Information in the Digital Age: Between Markets, Public Management and Citizen’s Rights, Cheltenham UK: Edward Elgar.

2. Alani, H. (Ed.) (2007), Unlocking the potential of public sector information with semantic web

technology, Lecture Notes in Computer Science, 4825, 708. 3. Allan, R. (2009), The Power of Government Information. In J. Gøtze and C. B.

Pedersen, (Ed.), State of the eUnion: Government 2.0 and Onwards, AuthorHouse. 4. Amos J. W. (1999), Freedom of Information and Business, Appendix on USA and FOIA Agency

case study, The Constitution Unit, University College London. 5. Arrow, K. J. (1984), Information and economic behaviour, Collected Papers of K. J. Arrow, Vol. 4,

The Economics of Information, Cambridge MA: Harvard University Press. 6. Arrow, K. J. (1979), The economics of information, in Dertouzos, M.L. and J. Moses, The Computer

Age: A Twenty Year View, Cambridge MA: MIT Press. 7. Barr, R. and I. Masser (1996), The Economic Nature of Geographic Information: A Theoretical

Perspective, Proceedings of the GIS Research UK Conference. 8. Berenschot/Netherlands Economic Institute (2001), Welfare implications of different pricing

models for public sector information (Eindrapport Welvaartseffecten van verschillende financieringsmethoden van elektronische gegevensbestanden), Berenschot and NEI, Utrecht: Berenschot.

9. BETA University of Strasbourg (2011), The reuse of PSI – An economic optimal pricing model, Agence du patrimoine immatériel de l'État.

10. Bing, J. (1998), Commercialisation of Geographic Information in Europe, Norwegian Centre for Computers and Law.

11. Bird, R. M. and T. Tsiopoulos (1997), User Charging in the Federal Government - A Background

Document, Ottawa: Treasury Board. 12. Blomquist, S. and V. Christiansen (2005), The role of prices for excludable public goods,

International Tax and Public Finance 12 (I).

13. Bundesministerium für Wirtschaft und Technologie (2008),Chancen für Geschäftsmodelle deutscher Unternehmen im europäischen und globalen Geoinformationsmarkt, MICUS Management Consulting GmbH.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

26

14. Cabinet Office (1998), Crown Copyright in the Information Age (Green Paper), London. Stationery Office, United Kingdom.

15. Centre of Land Policy and Valuations of the Universitat Region of Catalunya Politècnica de Catalunya (2007), Study of the Economic Impact of the Spatial Data Infrastructure.

16. Corbin, C. (2003), New Issues for the European GI strategy: Public Sector Information, Sheffield: University of Sheffield, GINIE (Geographic Information Network in Europe).

17. Corbin, C. (2007), Public Sector Information – Financial impact of the PSI Directive: Pricing and Charging.

18. Corbin C. (2010), Public Sector Information: Economic Indicators & Economic case study on charging models, ePSIplatform.

19. Craglia, M. and K. Evmorfopoulou (1999), Geographical data infrastructures four European case studies, Department of Town and Regional Planning, University of Sheffield.

20. De Vries, M., (1999), Initiatives in EU Member States in respect of dissemination and exploitation of Public Sector Information.

21. De Vries, M., Van de Velde, R., Dekkers, M., and Polman, F., (2006), Measuring European Public Sector Information Resources, on behalf of DG Information Society, European Commission.

22. De Vries, M., Kappf, L., O’Connor, J., Negreiro Achiaga, M., Wauters, P., Osimo, D., (2011) Pricing of Public Sector Information Study, on behalf of DG Information Society, European Commission.

23. De Vries, M., Lundqvist, B., (2011) Missing the Link? Interpreting the Terms ‘Business Activities’ and ‘Exclusive Rights’ in the Swedish Act on Re-use of Public Sector Information, Against the Background of the EU Directive on Re-use of Public Sector Information, on behalf of the Swedish Competition Authority

24. Donker, T. W. (2007), Access to and Re-use of Public-sector Environmental Data and Information. Policy Developments with a Focus on the European Hydro-Meteorological Scene, Polish Academy of Sciences Geographica Polonica, Vol 80, No 2.

25. Dutch Ministry of the Interior and Kingdom relations (2000), Towards optimum availability of public sector information, The Hague.

26. European Commission (2003), Directive 2003/98/EC, European Parliament and Council directive of 17 November on the reuse of Public Sector Information.

27. Evans, P. and T. Wurster (2000), Blown to bits: How the new economics of information transforms strategy, Harvard Business School Press.

28. Hadi, Z. A., and N. McBride, (2000), The Commercialisation of public sector information within UK government departments, International Journal of Public Management 13 (7).

29. Hall, M. (2003), Spatial Data Infrastructures in Australia, Canada and the United States, Leuven: K.U. Leuven & M. Hall consultant. Report elaborated in the context of a study commissioned by the EC (EUROSTAT & DGENV) in the framework of the INSPIRE initiative.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

27

30. H. M. Treasury (2000), The Economics of Government Information, in Cross-Cutting Review of the

Knowledge Economy, Part 5 London: HM Treasury, United Kingdom.

31. H. M. Treasury (2002), Selling Government Services into Wider Markets: A Policy Note for Public Bodies, London: HM Treasury, United Kingdom.

32. Hookham, C. (1994), The Need for Public Sector Policies for Information Availability & Pricing, Cambridge Computer Consultants (UK) Ltd.

33. Katz, R. W. and Murphy, A.H. (1997), Economic Value of Weather and Climate Forecasts, Cambridge, Cambridge University Press.

34. Lazo, J. K. and L. G. Chestnut (2002), Economic Value of Current and Improved

35. Weather Forecasts in the US Household Sector, In Report prepared for the National Oceanic and Atmospheric Administration by Stratus Consulting Inc. Boulder, Colorado.

36. Lind, M. (2003), Reliable Address Data: Developing a Common Address Reference System, National Survey and Cadastre Denmark.

37. Lind, M. (2008), Addresses as an infrastructure component: Danish experiences. National Survey and Cadastre Denmark.

38. Lind, M. (2010), The value of Danish address data: Social benefits from the 2002 agreement on procuring address data etc. free of charge,” Danish Enterprise and Construction Authority.

39. Loenen, B. (2006), Developing geographic information infrastructures. The role of information policies, Delft, DUP Science.

40. Longhorn, R. and M. Blakemore (2004), Re-visiting the Valuing and Pricing of Digital Geographic Information, Journal of Digital Information, 4(2).

41. Mayo, E. and T. Steinberg, (2007), The Power of Information: an independent review.

42. MICUS Management Consulting GmbH (2008), Assessment of the Re-use of Public Sector Information (PSI) in the Geographical Information, Meteorological Information and Legal Information Sectors.

43. National Research Council (2003), Fair Weather: Effective Partnerships in Weather and Climate Services, Committee on Partnerships in Weather and Climate Services, National Research Council of the National Academies, National Academy Press.

44. Newbery, D. (Ed.) (2008), Models of Public Sector Information Provision via Trading Funds, Cambridge University.

45. Nilsen, K. (1997), Social Science Research in Canada and Federal Government Information Policy: the Case of Statistics Canada, Dissertation. University of Toronto.

46. Nilsen, K. (2001), the Impact of Information Policy: Measuring the Effects of the Commercialization of Canadian Government Statistics, Westport CT: Ablex.


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

28

47. Nilsen, K. (2007), Economic Theory as it Applies To Statistics Canada: A Review of the Literature,

PhD, University of Toronto.

48. Office of Fair Trading (OFT) (2006), The Commercial Use of Public Information (CUPI), DotEcon Ltd.

49. Office of Fair Trading (OFT) (2006), The Commercial Use of Public Information, Annexe G: Economic value and detriment analysis.

50. Pas, J. and B. Vuyst, de (2004), Re-establishing the balance between the public and private sector: regulating public sector information commercialization in Europe, Journal of information Law and Technology.

51. Pettifer, R. E. W. (2008), Towards a Stronger European Market in Applied Meteorology, Meteorological Appl., Vol 15.

52. Pira International Ltd., University of East Anglia, and KnowledgeView Ltd. (2000), Commercial Exploitation of Europe's Public Sector Information, European Commission, Directorate General for the Information Society.

53. Pollock, R., D. Newbery and L. Bently (2008), Models of Public Sector Information Provision via Trading Funds, BERR (commissioned by HM Treasury and BERR).

54. Ravi Bedrĳvenplatform (2000), Economic effects of low entry accessibility to public sector information (Economische eff ecten van laagdrempelige beschikbaarstelling van overheidsinformatie), Amersfoort: Ravi.

55. Richard M. Adams, R. M., L. L. L. Houston, R. F. Weiher (2004), The Value of Snow and Snow Information Services, Report prepared For NOAA’s National Operational Hydrological Remote Sensing Center.

56. Robinson, D., (Ed.) (2008), Government data and the invisible hand, Yale Journal of Law and Technology, 11, 160.

57. Saulles, de, M. (2005), e-Government and the Re-use of Public Sector Information in 5th European conference on e-government: University of Antwerp, Belgium.

58. Stiglitz, J. E. (1999), Knowledge as a Global Public Good, Washington: World Bank.

59. Stiglitz, J. E. (2000), Economics of the Public Sector, 3rd ed. New York: W. W. Norton.

60. Stratus Consulting Inc. (2002), Economic value of current and improved weather forecasts in the U.S, SC10050.

61. Uhlir, P. (2009), The Socioeconomic Effects of Public Sector Information on Digital Networks: Toward a Better Understanding of Different Access and Reuse Policies: Workshop Summary.

62. UNESCO (2004), Policy guidelines for the development and promotion of governmental public domain information, Uhlir, P. (CI-2004/WS).


The

Du

tch

exp

eri

en

ce in

a D

anis

h c

on

text

29

63. U.S. Departments of Commerce and Transportation (2006), Benefits of the New GPS Civil Signal: The L2C Study, Leveson Consulting.

64. U.S. Department of Labour (2004), Geospatial Technology high growth industry profile, Employment and Training Administration, Business Relation Group.

65. Vickery, G. (2011), Review of recent studies on PSI re-use and related market developments, Report for the European Commission, 41 pp.

66. Weiss, P. and P.Backlund (1997), International Information Policy and Conflict: Open and Unrestricted Access Versus Government commercialization, in Kahin, B and C. Nesson, (Ed.), Borders in Cyberspace: Information Policy and the Global Information Infrastructure, Harvard Information Infrastructure Project, Cambridge MA: MIT Press.

67. Weiss, P. (2002), Borders in Cyberspace: Conflicting Public Sector Information Policies and Their Economic Impact, Summary Report, Washington: National Oceanic and Atmospheric Administration/National Weather Service, Department of Commerce.

68. Weiss, P. (2003), Conflicting International Public Sector Information Policies and their Effects on the Public Domain and the Economy, in Esanu, J. M. and P. F. Uhlir, Role of Scientific and Technical Data and Information in the Public Domain, Proceedings of a Symposium, Board on International Scientific Organizations, Washington: National Academies Press.

69. Weiss, P. (2004), Borders in cyberspace: Conflicting government information policies and their economic impacts No. 17, in Esanu, J. M. and P. F. Uhlir, Open Access and the Public Domain in Digital Data and Information for Science, Proceedings of an International Symposium, Board on International Scientific Organizations, Washington: National Academies Press.

70. Zevenbergen, J., (Ed.) (1998), Free Accessibility of Geo-information in the Netherlands, the United States and the European Community, seminar proceedings, TU Delft.

Documents

Funding of a System of Key Registers Mbbl-2012