You have probably never heard of the Disclosurites. They sound like some menacing Old Testament tribe, but while Disclosurites are up to no good, they aren’t an ancient people. They are the contemporary policy wonks and politicians who insist that Americans must be given voluminous amounts of information prior to making decisions so that those decisions will be “fully informed.”

“Disclosurites” is not, of course, an everyday word. It is the term that the authors of More Than You Wanted to Know have coined for those who are responsible for putting us in the “kudzu-like” grip of information mandates. Professors Omri Ben-Shahar (University of Chicago) and Carl Schneider (University of Michigan) have written a thoroughly engaging book that makes this convincing argument: Mandated disclosure is not merely a failure because it seldom helps anyone make a better choice, but it can be counterproductive. With so much required information cascading down on them, consumers, patients, and others may miss the information that would actually matter to them. Nevertheless, for politicians across the ideological spectrum, mandated disclosure is an easy way to appear to be engaged in solving society’s problems. Republicans can claim that more information helps markets work better and Democrats can claim that disclosures help protect “the little guy.” Therefore, the mandates keep accumulating.

Costs and benefits / Disclosure mandates usually have their genesis in what the authors call a “trouble story” that attracts attention and makes politicians want to do something. Consider one of the many cases discussed in the book: the tragic story of Jeanne Clery, a Lehigh University student who was raped and murdered in her dorm room in 1986.

Once her murder became national news, politicians decided that part of “the solution” to campus violence was to require universities to disclose on-campus crime statistics. Ben-Shahar and Schneider explain, “Lawmakers treated the trouble story as a problem not of campus safety, but as an information problem to be solved by disclosure. A small federal agency publishes a large handbook—200 pages of instructions on safety reporting. Compliance may cost schools something—a typical disclosure is over 10,000 words and requires managing much information, but costs the government trivially.” The disclosures, the authors conclude, divert resources away from important campus needs (safety and otherwise), but have hardly any effect on either the targeted decisionmakers or the incidence of campus crime.

That story exemplifies the general truth about mandatory disclosure: it entails vastly more cost than benefit.

Why is disclosure almost always a failure as a public policy tool? The authors argue that, at root, it is because nonspecialists cannot make complicated and unfamiliar decisions that properly utilize the disclosed information. Requiring that, e.g., prospective mortgage borrowers sign off on a stack of disclosures that are supposed to help them avoid making a bad choice in home financing is unlikely to do them any good. Nor is requiring a person who is contemplating a medical procedure to read and sign a lengthy document informing him about all the procedure’s pros and cons apt to help him make the best decision for his well being.

Even if individuals understand the language put in front of them, which is rarely the case, mastering the pertinent concepts and sensibly applying them to the decision at hand is beyond the capacities and time constraints of nearly all of us. When people have to make important decisions, the authors observe, what they need is good advice, not a pile of words and data that usually make them go into “Whatever” mode.

Better disclosure? / Sometimes, the Disclosurites realize that their solution often does little good because most people can’t understand the material thrown at them. The Disclosurites believe the way to make all that information more digestible is through yet another mandate, requiring that disclosures be written in simple language. Thus, Congress passed the Plain Writing Act of 2010 and the Dodd-Frank Act insists that disclosures must give financial consumers “timely and understandable information.” But the simplification approach cannot improve matters, Ben-Shahar and Schneider explain. “At base, simplifying fails because the complex isn’t simple and can’t be made so. Simpler words mean more words and longer (hence harder) documents,” they argue. Putting disclosures into easier words does nothing to make difficult ideas more comprehensible.

Another simplification gambit is to reduce the disclosure to a “score”—e.g., the restaurant sanitation grades one often sees prominently posted. Disclosurites have touted this as proof of the success of their endeavors, crediting such scores with a decline in food-related hospitalizations. The authors, however, point to research done in New York and San Diego that found no discernible health benefits from the restaurant grades. Instead, the scoring system appears to have caused a misallocation of inspection resources. Digging further into this research, Ben-Shahar and Schneider discovered that there really is no way of accurately encapsulating all of the factors that go into food safety in a single score. Moreover, inspectors are not machines and score very subjectively. So, while the scores seem to be objective and useful to diners in deciding where to eat, in fact they are neither.

Mastering the pertinent concepts and sensibly applying them to the decision at hand is beyond the capacities and time constraints of nearly all of us.

Politics of disclosure / As with regulation in general, disclosure mandates have been subject to a ratchet effect. Lawmakers keep adding new ones and expanding old ones, but almost never is a disclosure pared down, much less eliminated. Ben-Shahar and Schneider observe that lawmakers face a collective action problem in that it is easy and uncontroversial for them to push for more disclosure, but if any one of them were to take a stance in favor of less, he would be attacked as an enemy of the consumer. The structure of our politics locks us into a bad, ever-upward trajectory.

Sometimes mandatory disclosure is used to further hidden agendas, intended not to inform people but to scare them away from choices that some lawmakers and interest groups object to ideologically. For example, disclosure requirements concerning genetically modified foods are less about informed decisions than about driving consumers toward supposedly healthier, more environmentally conscious purchases. Disclosures of that kind, however, don’t seem to have any more effect on consumer behavior than other mandates.

Faced with the criticism that their pet policy does little good, Disclosurites often retreat to making the argument that giving people more information can’t do any harm. Ben-Shahar and Schneider respond that overloading Americans with information is detrimental:

Mandates can do harm, harm that is disproportionately borne by exactly the people who most need protection. This harm is unintended and unnoticed, but harm it is—and in several forms: mandates can undercut other regulation, deter lawmakers from adopting better regulation, impair decisions, injure markets, exacerbate inequality, and in some important cases, cripple valuable enterprises.

They proceed to back up that indictment.

People are apt to think that because some transaction is accompanied by a lot of official disclosures, it must be all right. Information that might raise important doubts gets overshadowed or buried in the mountains of pages. For instance, sharp and ethically dubious practices by lenders that at least arguably should be dealt with through direct regulation have escaped judicial sanction simply because all the mandatory disclosures were made to the hapless borrower.

The simple time cost of mandated disclosures can be harmful and even fatal. Medical centers that require head-injury patients to sign off on disclosures intended to ensure that they make fully informed decisions about the pros and cons of a treatment often take an hour longer to deliver care than centers that do not put patients through the ordeal of informed choice. As emergency responders say, the first hour after an injury is the “golden hour” when treatment seems to have the greatest effect on a patient’s long-term outcome. Not surprisingly, one study of emergency medical disclosures concludes that “the resultant delay in starting treatment could be lethal.”

On the other hand, disclosure laws have been used as a sword by customers to inflict damage on sellers who failed to comply perfectly with every aspect of a disclosure law. Lawyers have come up with a term for this: the disclosure defense game.

Conclusion / After thoroughly exploring the failure of mandated disclosure to achieve any detectable improvement in the decisions Americans make and demonstrating its serious unintended side effects, Ben-Shahar and Schneider arrive at the point where the reader expects them offer a solution. If mandatory disclosure is bad policy, what would you replace it with? Their answer: nothing. Asking what to replace mandated disclosure with, they write, “implies that [it] was doing something that needs to be replaced. Our argument has been that it accomplishes so little that eliminating it would deny few people anything.”

The authors observe that we are surrounded by unbelievable amounts of information—often free—that people can and do utilize to make better decisions. Often they rely on trusted friends, consultants, and information aggregators (who do not need disclosure mandates to perform their services) when they have big decisions to make. Disclosure mandates waste a lot of time and paper, but are almost entirely irrelevant to people’s decision processes.