Below is this week’s column.
It raises the issue of regulation to combat wrongdoing – and the paradoxical results it often brings about.
Regulation generates lots of debate between the right and left. The left often argue for regulation at least where it is putatively directed against various unfortunate outcomes of markets – externalities being a classic example.
The right rail against some of its palpable absurdities. As a result, beginning with Stigler in the 1950s a general scepticism to regulation has grown up.
Around the OECD world this perspective has been built into regulatory review agencies which exist as regulatory gatekeepers. Their function is to prevent regulation which does not meet certain quality standards from being enacted. Sadly (and I intend to develop this in subsequent posts and/or writing) this has been one of the least successful areas of economic reform.
Though regulation review agencies are supposed to be gatekeepers of quality, a range of factors prevents them from being particularly effective.
They are poorly resourced and have low status in the bureaucratic pecking order. Further their function is conceived as a (central agency) economic reform function rather than a regulatory function. The people in these agencies do not have a lot of experience in regulation. They are typically economists from central agencies spending some time in the reg review office.
I think economists and the perspective that they bring are a very valuable in the process of regulation, but I doubt these offices will do much good until they are seen as a kind of uber-regulator rather than a policeman. Indeed at present reg review is a kind of regulation for regulators and the reg review offices become the regulators. Ironic huh?
I think I have a way of improving things a little, but I haven’t been able to get business to fund me to do it. In the meantime the column’s over the fold!
Comments appreciated on the piece, but it doesn’t try to show how a better system could be developed. I’m still hanging out to get someone to pay me to cough up the goodies!
Security got nailfile but didn’t get joke
With results ranging from funny to tragic, regulation to detect or prevent wrongdoing often imposes mounting inconvenience on the public whilst leaving wrongdoers completely untouched.
Last week, 24-year-old Duncan Shephard from Caboolture was fined $750 plus court costs and given a 12 month good behaviour bond.
His crime? Telling a joke.
Shephard was at Canberra Airport travelling back to Queensland and joked that he had guns and cocaine in his luggage. He’s in good company. Groucho Marx was detained by customs officials after filling in a form giving his occupation as “smuggler” and asking his wife loudly what she’d done with all the opium after they’d inspected his luggage.
This newspaper reported police saying that jokes at airports occur far too often. My sentiments entirely though we shouldn’t forget all those jokes made outside airports. Even as you read this, jokes are being told. Several every second can amount to hundreds, even thousands every hour. And that’s just in Greater Brisbane. And jokes are just the tip of the iceberg. Research indicates that so called ‘quasi-jokes’ are even more common wry routines, animated asides, sardonic shrugs, risible recollections, frivolous frippery.
This problem, of compliance burdens that are substantial enough to inconvenience the public but not to stop wrongdoing is replicated in most of our dealings with authorities.
Take the regulation requiring banks to do ‘100 point’ ID checks on account holders. It’s certainly cumbersome. Why doesn’t a passport count as 100 points? Obtaining one involves close scrutiny and (we hope) a thorough check against birth records. Still the system requires something more. I guess the reasoning is that a criminal might forge a passport, but they’ll never forge a credit card bill.
Yet at the same time you can get a referee of suitable standing quite unknown to the bank to vouch for your ID, a process that must be routinely used by those wishing to rort the system. I’ve signed those forms as a referee and never once been rung for confirmation of my identity. And if one bank has gone through this rigmarole, why can’t it confirm your identify to other banks?
Most regulatory problems are usually there in spades in the tax system. Remember the early days of the GST when the requirement for oodles of information on Business Activity Statements was justified in part as fighting avoidance. Reasoning: You might lie in one box on the GST, but you’ll never lie in two.
But what more fitting, what more tragic place to ram home the farcical nature of some approaches to regulatory compliance than our old friend airport security? I recall a time when a few coins and/or a small belt buckle triggered a personal inspection with hand-held metal detectors. Not any more.
A friend of mine carried a nail-file onto a plane in his suit coat. No problems! Coming home with the nail-file in his briefcase it was detected and confiscated. When my friend asked why he had been given metal cutlery with his airline meal security officers called it wryly, one life’s little ironies. After a brief absence post Sept 11, metal cutlery on board is making a comeback in response to customer complaints about plastic.
Airport metal detectors no longer react when I walk through them with the following load:
1. A key-ring with a logo on a metal plate with more metal than a 50 cent piece.
2. my clunky Holden key with metal at one end and security electronics at the other.
3. My house key.
When I complain to security officers they tell me that the detectors are set to the regulated standard.
One official told me with lordly disdain that the machines detect the kind of metal used and terrorists don’t use that kind of metal. Terrorists may train in cells for months, but they’ll never figure out how to make weapons from the lightweight metal used in my house-key.
I wrote to Minister Anderson’s department asking what was the point of security screening that would allow someone on a plane with box-cutters (the weapon with which September 11 was perpetrated).
The official who drafted the reply was up to the task, writing that “The Government has set national, industry-wide standards . . . based on international criteria. . . . 1etal detectors must be calibrated for each installed location to ensure that set standards for metal detection are achieved. Screening authorities are required to test and document equipment calibration regularly and the Department of Transport and Regional Services audits compliance with these standards.”
Two more paragraphs of similarly exquisite vacuity followed and then a big thank-you for bringing the matter to the Minister’s attention. It’s a joke.
Government regulation may not stop terrorists getting onto our planes, but it sure is reassuring to know that it can stop anyone joking about it.
Well anyone except the regulators that is.