Transparency Is Overrated

In a representative democracy, data only goes so far—and knowledge is no substitute for real regulation.


Transparency is the Vitamin C of politics. It does some good under some limited conditions, but can cause harm if used as an alternative medicine when real treatments are needed. Though always popular, transparency has been much in the news recently as the solution to that which ails us. The real treatment is more regulation.

The cost of healthcare is rising? The ACA requires hospitals to publicly report how much they charge for each item and procedure in the hope that consumers will use this information to “buy” less costly treatments. Supreme Court decisions like Citizens United opened the floodgates for the flow of contributions by interest groups to politicians’ campaign chests? Anti-corruption supporters have latched onto the ruling’s upholding of political-spending disclosure requirements as the best means of keeping special interests in check. NSA surveillance programs are viewed as overreaching, ensnaring millions of Americans and tapping the personal cell phones of the leaders of friendly nations? The Obama Administration has promised to be more transparent about why these programs are needed and how they really work.

Transparency has long been hailed as the foundation of democracy. As kids are taught in civic classes, if voters cannot find out what the government is doing—either because its actions are concealed or shrouded by the release of misinformation—how are they to judge its programs and vote them up or down during the next election? Supreme Court Justice Louis Brandeis famously declared, “Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”

There is some truth in these claims, but much less than appears at first blush. The main reason transparency is vastly oversold is that it rests on a popular—but highly naïve—theory of how our democracy functions: Namely, that it operates as a direct democracy. This theory assumes voters can learn about the ins and outs of the numerous programs the government carries out; evaluate their effectiveness and costs; and determine which they favor or are keen to change or discontinue.

The problem with this theory is that most people are busy making a living, maintaining a family and a social life, watching TV, and nursing their six-packs, and thus have limited time and energy to devote to following public affairs. And, as recent studies reviewed in Nobel Laureate Daniel Kahneman’s bestselling book Thinking Fast and Slow show definitively, people do not have the training necessary to parse and evaluate the mountains of data. This is particularly true given the complexities and nuance of the available information. For example, some hospitals have rather low mortality rates, but it turns out that they achieve these good results by transferring dying patients to hospices. And how is the public to determine who is behind the donations a politician collects from innocuously named political action committees such as “All America,” “America Works,” “America’s Foundation,” and “American Dream.” Could anyone reasonably infer that the first two groups are linked to the Democratic Party while the second two are tied to Republicans?

Moreover, transparency, itself, requires the kind of coercive government regulation that proponents claim it is supposed to replace. Without government-mandated disclosure, most corporations and government agencies have little reason to release information about their inner workings, and, above all, ensure that this information is reliable, comprehensive, and readable. For example, many online companies are required to disclose their privacy policies to users. But these policies—crafted by lawyers to give the company as much leeway as possible—tend to be extremely difficult to understand and so lengthy that it would take the typical person roughly 250 hours to actually read through all the policies they encounter each year. This sort of “transparency” provides users with the illusion of security while actually serving to obfuscate.

Most important—and completely ignored by the champions of transparency—is the fact that even the most conscientious citizens, dedicated to following public affairs, have but one vote to weigh in on myriad issues. Most of the time, citizens cannot vote up or down any specific program. Exceptions include some local or state initiatives, such as bonds for schools or referenda on social issues like gay marriage. However, most of the time, especially at the national level, voters cannot be in favor of, say, much more funding for climate change, only a little more funding for ocean exploration, and less funding for bombers (or any such other combination). Rather, all they can do is vote up or down their representative, who, in turn, votes on many scores of programs.

To put this objection in the language of political science: Our government is—and must be—not a direct democracy, but a representative one. All we can do is judge whether, in general, taking into consideration all the various votes our representative has cast, we approve or disapprove. Most of us are not even free to give him or her any specific instructions. Indeed, even keeping up with the numerous positions he or she has taken is beyond the capabilities of most people. We judge our elected officials based upon whether we find them to be, in general, aligned with our public philosophy. Or, they are judged regarding their position on a few, select issues that we care about most: abortion, Social Security, Israel, or the invasion of Iraq.

In most cases the only effective way we can hope to get a handle on that which plagues our public life is if our representatives choose to either ban the problematic behavior (e.g., smoking in public) or regulate it (e.g., ensuring Wall Street will not again take risks that will lead to taxpayer bailouts)—which is to say that these problems cannot be solved by merely releasing information and leaving it to the public to take action.

Just like with Vitamin C, there are situations in which mere transparency can help; some evidence suggests that pollution-disclosure requirements result in reduced emissions. But most times we need the real thing: positive government action in the form of regulation.