Whenever someone is entrusted with advancing other people’s interests, enhancing the public good, or resolving conflicts between other people, there is a concern that instead of doing these things, she may advance her own interests. This is the much-studied agency problem, which, in extreme instances, may lead to corruption. According to common wisdom, transparency and accountability are the best cure to this problem. As Louis Brandeis famously claimed, ‘sunlight is said to be the best disinfectant.’ We agree. However, in our article, forthcoming in the Arizona Law Review, we argue that accountability and transparency also have their drawbacks, and that in the right circumstances, concealing the identity of the decision-maker may actually produce better outcomes. Anonymity can insulate the decision-maker from external pressures and temptations, thereby facilitating an impartial decision. Anonymity may also improve decision-making when the correct decision is expected to be unpopular.

Anonymity is already used in specific circumstances—most notably, in the United States, in the context of juries. Courts sometimes empanel anonymous juries, to protect the jurors from potential threats that might bias their decision-making. An example from the private sphere is the committee that periodically updates the makeup of the S&P 500 index—one of the most influential indices of stock performance of large companies listed on stock exchanges in the United States. The identities of the members of the Index Committee are kept secret. Another well-known application is academic peer review, where the identity of the referees is routinely concealed from the author.

We argue that keeping the identity of the decision-maker confidential may be advisable in many contexts where at present it is not yet used. For example, current rules of governmental procurements emphasize accountability: when a contract is awarded based on competitive proposals, unsuccessful bidders are entitled to receive information about the evaluation of their offers, a summary of the rationale of the award, and so forth. Without compromising the salutary effect of this accountability, keeping the identity of the administrators in charge of the decision confidential can improve the process by shielding them from corrupt offers by the bidders. To take another example, the choice between different vaccines against a virus that causes a pandemic, and the decision who is vaccinated first, should be made on medical and scientific grounds. Keeping the identity of the decision-makers anonymous may protect them from external commercial and political pressures and temptations. Here too, the grounds of the decisions may be announced without revealing the identity of the decision-makers. Importantly, as these examples demonstrate, anonymity and accountability are not necessarily incompatible. Elements of anonymity and accountability may be interwoven in complex ways, to produce best outcomes. Numerous other considerations and possibilities are discussed in detail in our article.

When considering the introduction of an anonymous decision process in any given context, the first question to be asked is whether such process would violate fundamental rights. If people who are affected by a decision, or the public at large, have an absolute right to know who makes a decision, then decision-makers’ anonymity is ruled out as a matter of principle. However, in most contexts (including decisions made by public officials) there appears to be no such right.

Then, just as transparency and accountability are no panacea for the agency problem, anonymity also has its own limitations and downsides. Basically, anonymity compromises the benefits of accountability. Since anonymity reduces the expectation that one will have to justify one’s decision, it is likely to result in less vigilant information processing.Anonymity may also have a disinhibiting effect in both individual and group behaviour settings—which may result in increased aggressiveness. This concern has been expressed in the contexts of jury decision-making and academic review of manuscripts, but is less relevant in other contexts, such as the decisions of the S&P 500 Index Committee.

In designing anonymous decision processes, it is important to distinguish between (1) cases where there is a conflict between the direct interests of the decision-maker (or people closely associated with him or her) and those of other people or entities, and (2) cases where there is a conflict of interest among other people or entities affected by the decision—who might, in turn, harm or reward the decision-maker. Generally speaking, anonymity is inappropriate in the former category of cases. Within the latter category, one important factor is whether the people or entities potentially affected by the decision are in a similar position in terms of their ability and motivation to harm or benefit the decision-maker. Anonymity works particularly well when the potential gainers and losers from a decision are similarly positioned in this regard. In such cases, decision-makers are less likely to reveal themselves to the gainers (in order to be rewarded for their decision), because once their identity is made known, they expose themselves to retaliation by the losers. The S&P 500 Index Committee is a case in point. 

In other instances, such as regulatory capture, while anonymity may make it impossible for special interests to interact with public decision-makers, there is a concern that public officials might reveal themselves to the special interest group in order to be rewarded for their decisions, without being overly concerned about retaliation by the general public. 

Interestingly, the choice between transparency and anonymity may affect not only the process and outcomes of decision-making, but also the ex ante selection (including self-selection) of decision-makers. Some people may refuse to assume decisional roles unless their identity is kept secret, whereas others, who like to be in the limelight, may be uninterested in undertaking anonymous roles.

Finally, anonymity can come in various forms. For example, a decision-maker might be anonymous to some people, but not to others, and the identity of the decision-maker may be kept anonymous indefinitely, or only for a certain period. It is also possible to provide the reasons for a decision without revealing the identity of the decision-maker. 

Belabouring Louis Brandeis’ metaphor: Sunlight is a powerful disinfectant. But sometimes, when (social) beings are exposed to sunlight they are not made for, they may be harmed. Keeping them in the shade may in such cases be better for society.

 

Eyal Zamir is the Augusto Levi Professor of Commercial Law at the Faculty of Law, Hebrew University of Jerusalem.

Christoph Engel is Director at the Max Planck Institute for Research on Collective Goods in Bonn.