Local Meanings of Targeted Transparency: Understanding the Fuzzy Effects of Disclosure Systems

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.