Institutional design and information revelation: Evidence from environmental right-to-know

Abstract

How governments design institutions for the revelation of information depends on how the costs and benefits are distributed across affected groups. In this study I examine the incidence of different kinds of constituencies and how governments give citizens access to information that affects them. A number of important studies have sought to understand the effect of such rules on the revelation of private information and policy outcomes, but we know little about the sources of those rules. Do the rules coincide with constituencies that benefit from their existence? Are they absent when strong constituencies can avoid bearing the costs of the rules? Using data on community "right-to-know" protections regarding environmental hazards, I compare the incidence of the benefits and costs of these design choices in the context of rules that reveal information and charge the cost of information revelation to the regulated community. The models show that the incidence of right-to-know protections depends on the presence or absence of constituencies that would enjoy their benefits or bear their costs. However, organizational costs limit the ability of affected constituencies to obtain institutional designs that reflect their interests.