With the possible exception of Mother’s Day, there is no policy suggestion as widely admired and blandly unobjectionable than the idea that we should have “more transparency.” Libertarians love it because it can function as a substitute for more onerous regulation; liberals love it because the government is making companies play fair. It’s the one thing that everyone can agree on, which is why we’ve had a lot of recent regulation -- from displaying calorie counts to various health-care measures -- that aim to give consumers more information about the various folks they buy goods and services from.
It’s time for someone to take a brave stand against all that transparency. So I guess that’s up to me.
OK, maybe a not-so-brave stand: I like transparency, too. Who doesn’t? But transparency doesn’t always help, and in fact, it can backfire.
Take those calorie counts on menus. Seemed like an obvious win to mandate them for restaurants. Except that they don’t seem to accomplish anything. There’s some suggestion that maybe converting calorie counts into the amount of exercise required to burn them off might help, but so far, I can find only one study that supports this idea, and it is very thinly described and doesn’t seem to be available online.
Meanwhile, providing calorie counts does have actual costs. There’s the financial cost of devising them, which is not trivial. But there’s also the intangible costs to innovation and decentralization: Calorie counts are easiest to manage for chains preparing highly processed foods in a rigidly standardized way. Most of the people encouraging calorie counts on menus were probably not hoping that it would tip the scales toward more Applebee's and fewer smaller restaurant groups preparing artisanal foods from fresh ingredients.
And that’s just assuming that the effect of the transparency is neutral -- doesn’t help, doesn’t hurt. In fact, in one study of an actual calorie-count law, the information had the opposite effect: People consumed more, not less.
Nor is that the only case where transparency may have actually had the opposite of its intended effect. The Incidental Economist explains:
New York tracks and reports the mortality rates of heart surgeons. And great news: Operative mortality is going down! But is this because surgeons are ‘cherry picking’ only the least sick patients?
The idea behind public reporting of mortality rates was to allow patients to select the best doctors and to pressure doctors to improve their practice. How well did it work?
. . . Kolker provides several reasons to believe that New York surgeons are selectively avoiding the sickest patients.
Maybe that’s actually good, because those people are so sick that surgeons shouldn’t be operating on them. But that was the opposite of the idea behind the measure, which was to give patients better information for making choices -- not to have the surgeons make those choices for them. Moreover, one way that surgeons get better at operating on sicker patients is to, well, operate on sicker patients. It’s not clear to me that we want to throw a spanner in that process.
The point is not to advocate against transparency, but to caution against viewing transparency as that most elusive of all creatures: a cost-free public good. We should save that sort of thing for Mother’s Day.
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