Should experts be required to disclose conflicts of interest? Sure. But Courtney Humphries writes in the Boston Globe that it doesn't actually do any good:
Cain, Loewenstein, and Moore conducted a series of experiments meant to mimic a situation in which a person in authority — such as a doctor, consultant, or real estate broker — is giving advice that influences another person’s decision. Certain study participants were required to make an estimate — evaluating the prices of houses, for instance. Meanwhile, other participants were selected to serve as experts: They were given additional information with which to advise the estimators. When these experts were put in a conflicted situation — they were paid according to how high the estimator guessed — they gave worse advice than if they were paid according to the accuracy of the estimate.
No surprise there: People with a conflict gave biased advice to benefit themselves. But the twist came when the researchers required the experts to disclose this conflict to the people they were advising. Instead of the transparency encouraging more responsible behavior in the experts, it actually caused them to inflate their numbers even more. In other words, disclosing the conflict of interest — far from being a solution — actually made advisers act in a more self-serving way.
“We call it moral licensing,” Moore says. “After having behaved honestly and virtuously, you then feel licensed to indulge in being a little bit bad.”
And what about the other side of the relationship? Do the people receiving information act more skeptically when they know about conflicts of interest? Not really. It turns out that sometimes they actually act less skeptically because they don't want to make it seem as if they now distrust the person sitting across the table from them.
Bottom line: disclosure may be a good thing, but by itself it doesn't do much good. We need regulations that change incentives, not merely disclose them.