What is the role of whistleblowers in a democratic market economy?
Whistleblowers play an important role in a democratic market economy. With highly complex structured contracts, specifically in the financial sector, there���s asymmetric information due to limited access. Shareholders cannot adequately monitor the behavior of financial traders who can take risks, which when materialized shareholders will not be able to repay. There���s also a lack of efficient monitoring on part of the regulators/government agencies due to resource constraints or revolving doors among the staff working at these financial institutions and regulatory agencies. Thus, whistleblowers play a critical role in exposing potential fraud within their organizations.