More to the point at hand, the theory holds when the public pressures (or the law requires) politicians to disclose their financial conflicts of interest. A study by, among others, Harvard's Andrei Shleifer—once embroiled in a big ethics scandal of his own—collected data on political rules for conflict-of-interest disclosure in 175 countries. "Although two thirds of the countries have some disclosure laws, less than a third make disclosures available to the public. Disclosure is more extensive in richer and more democratic countries. Disclosure is correlated with lower perceived corruption when it is public, when it identifies sources of income and conflicts of interest, and when a country is a democracy."
And it is that public trust that economists are really seeking to restore. Frederic Mishkin, for one, the economist filleted in Inside Job for his work on Iceland, has thrown his support behind the new ethics codes. He told the New York Times this week, "I strongly support having the A.E.A. clarify standards for disclosure, because increased transparency would benefit the public and the economics profession."