Regulators as Guardians of Trust? The Contingent and Modest Positive Effect of Targeted Transparency on Citizen Trust in Regulated Sectors

Abstract

Targeted transparency has become an essential tool for regulation. Through information disclosure, regulatory agencies try to get regulated companies to improve their practices and comply with regulations. In the past, regulation was associated with distrust in regulated sectors. Recent research suggests that regulation, especially targeted transparency, may also increase citizen trust in regulated sectors. However, empirical evidence on whether transparency as a regulatory tool undermines or decreases trust in a sector is lacking. We contribute to this debate by investigating the effect of targeted transparency on citizen trust through a large-scale representative survey experiment (n = 5,303). We used 12 transparency frames in three regulated domains in the Netherlands (consumer rights, healthcare safety, and nuclear plant safety). Our findings suggest that, in general, targeted transparency does not undermine trust, but has a positive effect on trust in regulated sectors. However, this effect is small and contextual, depending on the regulatory domain and type of transparency frame.