Mandated disclosure reigns triumphant. Disclosure requirements appear everywhere: tort law (“duty to warn”); consumer protection (“truth in lending”); bioethics and health care (“informed consent”); online contracting (“opportunity to read”); food law (“nutrition data”); campaign finance regulation; privacy protection; insurance regulation; and more. Corporate scandals and financial crises ceaselessly spawn new disclosure laws: the Securities Act of 1933; the Truth-in-Lending laws of the 1960s and 1970s; the Sarbanes-Oxley Act of 2002; and the Dodd-Frank Act of 2010.
We are often asked what should replace mandated disclosure given that it doesn’t work. Our answer is that nothing necessarily needs to replace something that doesn’t work. If mandated disclosure does not work, nothing is lost in abandoning it – and perhaps something, like lessened frustration and distraction, can be gained. It is important to recognize that not only is mandated disclosure not a panacea, but so too are other promised easy and simple solutions. Sometimes the policymaker will just need to bite the bullet and consider which social problems actually need meaningful regulatory responses and then seriously assess what kind of response will actually help ameliorate the problem.