{"id":828,"date":"2011-05-19T14:11:59","date_gmt":"2011-05-19T18:11:59","guid":{"rendered":"http:\/\/www3.law.harvard.edu\/journals\/hlpr\/?p=828"},"modified":"2015-10-02T15:57:05","modified_gmt":"2015-10-02T15:57:05","slug":"disclosure-is-not-the-cure-all-liberals-want-it-to-be","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/lpr\/2011\/05\/19\/disclosure-is-not-the-cure-all-liberals-want-it-to-be\/","title":{"rendered":"Disclosure is not the cure-all liberals want it to be"},"content":{"rendered":"

Anthony Kammer\u00a0<\/span><\/em><\/p>\n

Disclosure rules have become a kind of last resort for policy makers looking to reduce institutional corruption.\u00a0There have been proposed disclosure rules for\u00a0economists<\/a>, particularly those who had strong\u00a0ties to the financial sector<\/a>.\u00a0Others have called for general transparency for any academics\u00a0who receive private funding for their research<\/a>\u00a0or\u00a0who testify before Congress<\/a>.\u00a0The Affordable Healthcare Act imposed new disclosure requirements for\u00a0physicians<\/a>, and Dodd-Frank requires increased transparency into\u00a0executive compensation<\/a>. And\u00a0until recently<\/a>, disclosure had reasonably broad\u00a0bipartisan support<\/a>\u00a0as a partial fix to the torrent of campaign spending that was opened up by the now infamous\u00a0Citizens United<\/em>\u00a0decision.<\/p>\n

<\/p>\n

The motivating idea behind all these proposals is that by revealing funding sources and other conflicts of interest, corruption will become apparent and the most egregious activities will be driven from the marketplace. Politically, these regulations probably owe much of their support to the fact that they\u2019re generally viewed as consistent with free market principles. Recently, even that has come into question.\u00a0Conservatives and industry insiders have expressed worries that disclosure rules add costs and stymie speech. There\u2019s\u00a0plenty<\/a>\u00a0to read<\/a>\u00a0about<\/a>\u00a0that debate<\/a>, but it basically boils down to the fact that Republicans benefit more by keeping disclosure rules lax.
\n<\/span><\/p>\n

Before Democrats go on championing disclosure laws as the solution to all forms of institutional corruption, however, they should recognize its limits. While transparency is a crucial element of anti-corruption regulations and is necessary to police many of our public and private institutions, it would be a terrible mistake to stop pursuing substantive conflict of interest regulations and accept disclosure as the solution to all forms of corruption.<\/p>\n

As\u00a0Cain, Moore, and Loewenstein\u00a0phrased it<\/a>, that there are times \u201cwhen sunlight fails to disinfect.\u201d\u00a0Treating disclosure as an end-in-itself requires a misplaced faith in the ability of markets to answer all of society\u2019s problems. And there is emerging\u00a0empirical support<\/a>\u00a0that disclosure rules often fail to accomplish their purported goals. I\u2019ve tried to separate out at least two reasons\u00a0to be skeptical about disclosure\u2019s ability to eliminate conflicts of interest:<\/p>\n

1) Because disclosure often comes into play when there are significant information\u00a0asymmetries,\u00a0more information does not enable policymakers, voters, or consumers to make better decisions. If a patient goes to a doctor who says he met with a drug rep before prescribing a certain medicine, the patient is not able evaluate whether or not to take the medication. He\u2019s not going to ask another doctor or know how to assess the risks involved. Similarly, when an economist is testifying during a financial crisis before the Senate, how is a Senator to properly discount testimony that has industry support? The element of duress makes the ineffectiveness of disclosure rules even more pronounced.<\/p>\n

2) Disclosure in many ways legitimates conflicts of interest by telling politicians and professionals, in effect, \u2018so long as you told everyone what you\u2019ve done, whatever questionable activity you engaged in was presumably acceptable.\u2019 It might even be making behavior worse.\u00a0As research by Cain, Moore, and Loewenstein\u00a0revealed<\/a>, disclosure seems to give experts the impression that they have dealt with the ethical problems posed by their conflict of interests and can sometimes exacerbate the extent to which expert statements become self-serving.\u00a0As Courtney Humphries at the Boston Globe\u00a0noted<\/a>, policymakers may be treating disclosure as a panacea and refusing to address the conflicts of interest that are the real source of corruption.<\/p>\n

Beyond this, disclosure reinforces the patently false norm that markets self-regulate. And naively supporting disclosure legislation risks lending weight to the deregulatory ideology that has already produced so many harmful conflicts of interest at the core of our political and financial systems. There are certain arrangements, that no matter how transparent, are simply incompatible with good government or a stable financial system.<\/p>\n","protected":false},"excerpt":{"rendered":"

Anthony Kammer\u00a0 Disclosure rules have become a kind of last resort for policy makers looking to reduce institutional corruption.\u00a0There have […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false,"_members_access_role":[],"_members_access_error":""},"categories":[2],"tags":[],"class_list":["post-828","post","type-post","status-publish","format-standard","hentry","category-blog"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/peZQka-dm","jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/posts\/828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/comments?post=828"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/posts\/828\/revisions"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/media?parent=828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/categories?post=828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/lpr\/wp-json\/wp\/v2\/tags?post=828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}