Balkinization  

Monday, May 08, 2006

Who's Afraid of the Dark?

Ian Ayres

The drive for more transparent democratic institutions continues. But Saul Levmore long ago realized that the "Anonymity Tool" could deter corruption and further other democratic values.

Tony Blair's leadership has been threatened this spring by allegations that "secret political payments were rewarded with seats in the house of Lords." The traditional response is to simply require disclosure, but in a recent oped in the Financial Times, Bruce Ackerman and I argue that mandating anonymous contributions is a more powerful means of insulating the political sphere from uneven distribution of wealth in our economy.

Barry Nalebuff and I in a recent Forbes column argue that the anonymity tool can also help us make progress with CEO compensation consultants. If compensation consultants aren't told which company they are representing, but instead are asked to rank a group of CEOs, it will be a lot harder for them to say that the entire group is above average.

Several people have argued in the campaign finance arena that the costs of anonymity are too great -- especially the cost of depriving citizens of "voting cues." But in a forthcoming University of Chicago Law Review essay, Bruce and I argue that it is feasible to combine elements of disclosure and annomity in a single system. Under what we call "The Secret Refund Booth," contributions are immediately disclosed but contributors have a 5 day cooling off period to request a refund. The public gets a complete and accurate list of everyone who has tried to influence a candidate, but the candidate can't be sure whether any individual contributor actually paid the price.

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