Find the missing sentiment quiz

Here is a brief extract from the beginning of a staff discussion paper (pdf) on the regulation of the professions published by the National Competition Council in 2001. I think there’s something missing from it – do you agree and if so what do you think it is?

The challenge of reform, particularly in the context of National Competition Policy reviews of the governing legislation, is to:

  • ensure that regulatory restrictions relate directly to the achievement of the public benefit objectives; and
  • pursue the objectives of regulation at minimum cost to the public in terms of restrictions on competition or other matters.
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Damien Eldridge
Damien Eldridge
15 years ago

Nick,

Maybe they should have included: “To ensure that the regulation has actually been achieving its objectives”. This is potentially somewhat different from the first dot point. Furthermore, the second dot point is only relevant if the regulations actually achieve their objectives!!!

Regards,

Damien.

Damien Eldridge
Damien Eldridge
15 years ago

Nick,

A further addition that should probably be added is something like: “To ensure that the benefits of the regulation outweigh its costs”.

Regards,

Damien.

Fred Argy
Fred Argy
15 years ago

In my recent AI paper I argued that four questions need to be asked before deciding on the merits of a regulation. They are

– how effective is it in acheiving its own policy goals?

– does the regulation have adverse by-product effects on economic efficiency?

– are there alternative, equally effective, ways of achieving the desired goals more efficiently (e.g. through the budget)?

– if alternatives are not available, what are the relative costs and benefits of lowering or removing the regulation?

Ken Parish
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Ken Parish(@ken-parish)
15 years ago

What’s missing* is an explicit commitment to regulations which ensure that the public is as far as possible in a position to assess and make choices about the abilities, performance, reputation and ethics of members of all professions (and indeed tradespeople providing services). I guess that is conceptually a subset of economic efficiency, but I think it needs to be made explicit in its own right.

* I should qualify that I didn’t have time to read the paper, and I’m sure it had some things to say about ethics etc (it would be very surprising if it didn’t), but I’d be

pablo
pablo
15 years ago

I see a ‘grab all’ bit of gobbledeegook in the second objective designed to effectively nobble the the NCC’s ‘regulation of professions’ – the whole being worthy of a ‘Yes Minister’ plot.
To start with the objective states that restrictions on competition will continue but they will be pursued at minimum cost to the public.
Then there is the ‘other matters’ that the professions may be indulging in. Let’s be forensic and suggest that they may also be ‘restrictions’ of some sort which all the NCC are suggesting is that their costs be similarly ‘minimal’. So it is business as usual for the Council (and the professions) and the key word for any cynic like me is the ‘challenge’ that the Council suggest they face. Replace it with ‘problem’ and the whole goes into the ‘too hard’ basket.

Chris Lloyd
Chris Lloyd
15 years ago

Isn’t the objective to maximise benefits minus costs? This requires neither maximising benefits nor minimising costs. Fred’s fourth point got it dead right it seems to me. Look at the effect of a marginal reduction (or increase) in both benefits and costs, specifically the difference.