Red tape: hit or myth

http://www.rsspieces.com/m/blogs/miamism/mythbusters.jpgI was intrigued to find that when the Public Service Commission launched into the project of tackling red tape, they found they were beset by myths. Just like Lateral Economics said in its report on Regulation and Innovation for the Victorian Government:

The finer points of much regulation for instance protections against spam, privacy, ensuring sufficient information is provided to consumers make it virtually impossible to comply with the regulation by simply ensuring that one behaves commonsensically and with integrity and propriety.

Each firm must have their processes vetted by lawyers . . . It is easy to imagine such regulation taking a heavy toll of a culture of continual improvement within a workplace.  . . . [I]t is not difficult to imagine that many simple ideas for improving processes may not be considered, and indeed that a culture develops in which change is frowned upon as being too much trouble.

Often when [businesspeople are] asked to cite chapter and verse what the business person has claimed is not quite accurate and some course of action they claimed was prohibited by regulation turns out on closer inspection to be permissible at least in some circumstances.

This phenomenon might be attributed to ignorance or hostility to government. But there is also another explanation. Many urban myths about regulation circulate within the highly regulated industries. In retail mortgage lending for instance where an error is made in documentation, this will frequently involve substantial delays as entirely new documentation is drawn up where a simple letter of understanding might also suffice.

Our understanding is that the UCCC is not so prescriptive and would permit this. Yet many officers within large organisations justify their existing procedures with claims that they are required under the UCCC. It is easy to imagine such urban myths being a powerful ally of the status quo, and an enemy of the culture of commonsensical and continuous innovation.

And so as it sets about trying to reduce red tape in government, the Public Service Commission has found it necessary to put out a special document entitled Reducing red tape: Dispelling some myths in Australian Government administration (pdf).

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