The effectiveness of regulatory disclosure policies

TLDR

Regulatory transparency—mandatory disclosure of information by private or public institutions with a regulatory intent—has become an important frontier of government innovation. This paper assesses the effectiveness of such transparency systems by examining the design and impact of financial disclosure, nutritional labeling, workplace hazard communication, and five other diverse systems in the United States. The authors evaluate user and discloser embeddedness in eight major transparency policies through detailed case analyses and compare these findings with prior studies to test predictions about effectiveness. We argue that transparency policies are effective only when the information they produce becomes “embedded” in the everyday decision‑making routines of information users and information disclosers, and that this double‑sided embeddedness is the most important condition for transparency systems' effectiveness. © 2006 by the Association for Public Policy Analysis and Management.

Abstract

Abstract Regulatory transparency—mandatory disclosure of information by private or public institutions with a regulatory intent—has become an important frontier of government innovation. This paper assesses the effectiveness of such transparency systems by examining the design and impact of financial disclosure, nutritional labeling, workplace hazard communication, and five other diverse systems in the United States. We argue that transparency policies are effective only when the information they produce becomes “embedded” in the everyday decision‐making routines of information users and information disclosers. This double‐sided embeddedness is the most important condition for transparency systems' effectiveness. Based on detailed case analyses, we evaluate the user and discloser embeddedness of the eight major transparency policies. We then draw on a comprehensive inventory of prior studies of regulatory effectiveness to assess whether predictions about effectiveness based on characteristics of embeddedness are consistent with those evaluations. © 2006 by the Association for Public Policy Analysis and Management