Comments on: Regulation – once more

By: Nicholas Gruen

Nicholas Gruen — Fri, 08 Jun 2007 02:48:00 +0000

Will post with pleasure – and I agree with your analysis. Unfortunately the idea of ‘regulatory budgeting’ is sometimes promoted in a pretty crudely economistic way – as if one can have much of a grasp of the real quantitative effects of what you’re doing. But I agree with your formulation. There needs to be some opportunity cost of regulation.

By: stephen bartos

stephen bartos — Fri, 08 Jun 2007 02:11:04 +0000

the increase in regulation is driven as much as anything by the lack of a rationing mechanism – there is no discipline on Ministers or governments to cut regulation, and it remains the easiest option by which to demonstrate activity when faced with a need to be seen to do something about a problem.

Often the regulatory response is a simple, kneejerk reaction – eg faced with a CCC inquiry focusing on Brian Burke, the WA government introduces quite comprehensive regulation for the registration of all lobbyists (whether you agree with the move or not, it is new regulation).

The RIS process does not help with rationing. It only assesses case by case whether a new regulation is net positive or negative. the problem here is that even if one specific proposed new law is a good thing (considered in isolation) it does not mean that 1000 such new laws are a 1000 times better. The cumulative effect is never considered.

For some time now I have been a convert to the idea of a regulatory budget, which like the fiscal budget would require proposals for new regulation to be considered together, a ranking to be developed, and only the most necessary or desirable to proceed into actual law. Am in the process of writing a paper on this at present, which I’ll send to Nick to post (if he likes) on Club Troppo.

By: Dave Bath

Dave Bath — Thu, 07 Jun 2007 07:59:51 +0000

There was an article about a year ago in The Economist about red tape. If public servants are paid reasonable wages, lots of red tape correlates well with a good economy (e.g. the nordics). If public servant wages are unlivably low, each bit of red tape is a chance for a petty official to ask for a “tip” to expedite things.

So, iff there is good governance, as someone on Yes Minister said “Red tape holds the country together”