41. Laurence Tai, Transparency and Media Scrutiny in the Regulatory Process, 10/2011.
Abstract: Transparency is thought to improve accountability in executive branch policymaking, but bureau-crats are also known to worry about negative publicity. This paper develops a model of the regulatory process in which media scrutiny can combat agency capture. An agent proposes a regulation with input from an interest group seeking the lowest possible level. Some agents incorporate this information in a way that mirrors the public interest, but others may accept transfers from the group in exchange for lower regulation. Greater transparency is modeled as an increase in the like-lihood of media reports alleging that the evidence supports a higher level of regulation than pro-posed. More transparency unambiguously benefits the public only if it causes no increase in incor-rect reports; otherwise, it can lower the public’s payoff by reducing the information coming from the media reporting process or by inducing agents to propose policies that provide the public less information about the optimal regulation. These results hold even though a principal aligned with the public interest sets the final policy. Among the policy implications is that transparency rules should be tailored to individual agencies rather than implemented in general terms.