Because of the extensive business and investment involvements of President Trump and his cabinet nominees, the press has been concerned about conflicts of interests. An understanding of psychology is required to appreciate why conflicts of interests are a serious moral problem.

Conflicts of interest occur when people make decisions that are biased by their personal goals, in neglect of obligations to others. Such conflicts arise in government but also in many other situations: when medical researchers are funded by pharmaceutical companies, when psychotherapists try to treat opposed family members, and when professors have personal relationships with selected students. In all of these cases, people can neglect their professional duties because they are furthering their own interests rather than the people to whom they are obliged.

But why should conflicts of interest be a problem? People should simply be able to declare their conflicts of interest and make their decisions in accord with their professional duties rather than their own personal and financial goals.

There are serious problems with this suggestion. Experiments have shown that disclosure of conflicts of interest can actually increase bad behavior rather than reduce it. People seem to think that once they have disclosed they can proceed appropriately, not understanding that there are subtle ways in which judgments can be biased even by disclosed interests. A good understanding of cognition and emotion shows why conflict of interest can be a major moral problem even after disclosure.

The brain is not compartmentalized enough for people to be able to separate out their personal interests from their professional duties. According to a popular view of the brain, it divides into an ancient set of emotion areas called the limbic system and a more modern set of cognitive areas in the prefrontal cortex. But decades of brain scans have shown that all of these areas are tightly interconnected, for example when the ventromedial prefrontal cortex interacts with areas important for emotion such as the amygdala. There is no such thing as emotion-free cognition, and emotion usually takes into account cognitive appraisals of the current situation as well as physiological responses.

These interconnections explain why motivated inference is so prevalent. Professional decision-makers might think that they are carrying out their responsibilities, but all people are subject to the bias that we tend to remember, look for, and apply information that serves our personal goals. So even when government officials, scientists, professors, or therapists think that they are behaving scrupulously, there is a good chance that they will be led astray by motivated inference deriving from cognition-emotion connections in the brain.

So, what can be done about conflicts of interest? The best strategy by far is simply to avoid them, by having professionals completely steer clear of situations where they have to juggle their legal responsibilities against their personal goals. For government officials this means divesting themselves of monetary interests outside their official responsibilities, or at least placing their assets in a blind trust so that they do not know what their financial interests are. Disclosure of conflicts of interest is only a minimal step for making them visible to the public, who can then be wary of the conclusions drawn and actions made by people who will inevitably be biased.

References

Loewenstein, G., Sunstein, C. R., & Golman, R. (2014). Disclosure: Psychology Changes Everything. Annual Review of Economics, 6(1), 391-419.

Thagard, P. (2007). The moral psychology of conflicts of interest:  Insights from affective neuroscience. Journal of Applied Philosophy, 24, 367-380.

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