Local Meanings of Targeted Transparency

Abstract

Targeted transparency has become a popular regulatory instrument, but its effects are fuzzy because disclosure does not always lead to better compliance. To understand this fuzziness, it is necessary to study the meanings managers attribute to disclosure systems. An empirical analysis of disclosure systems for food safety in Denmark and for environmental safety in the Netherlands confirms that the range of managerial reactions is broader than expected on the basis of rational-choice theory, but can be explained by focusing on local meanings. The article illustrates the shortcomings of a homogeneous approach to targeted transparency policy. Regulators should adopt a bottom-up rather than a top-down approach and develop differentiated policies based on a more nuanced understanding of the meanings managers attribute to targeted transparency.

Organizational arrangements for targeted transparency

“…As such, it is also referred to as 'targeted transparency' [7,8,19]. Targeted transparency can be defined as imposing disclosure requirement on a market sector with the objective of enabling consumers to consider information about compliance in their decisions to buy products or services.…”

“…On the other hand, these respondents say, the elaborate demands that derive from these rules may hold back 'innovatively communicating' organizations (R11, 16,18,19,20,24).…”

“…[7,11,20]). Disclosure requirements mean that government enables consumers to act as 'regulators' [19,20].…”

“…Disclosure is seen as a relatively cheap and 'soft' policy instrument [6,19]: it does not impose sanctions or rewards upon certain behaviour but assumes that actors will behave rationally and according to the policy makers' wishes when they have the right information. Prior research on targeted transparency focused on its effectiveness of a disclosure system at large [8] or on the degree to which companies comply with the law due to disclosure [20].…”

“…Some investigations focus on the responses to signals from consumers but little is known about the way companies translate legal obligations to provide information in organizational arrangements for the production of consumer information (see [19] for an exception).…”