3 Unintended Consequences For Regulators to Consider

26 Nov 2019, Posted in All Posts, Blog Posts
unintended consequences

Everyone makes mistakes, but regulators have a higher responsibility to be careful and deliberate. Institutional speed bumps help keep the pace slow, reducing the speed at which bad decisions can be made and forcing more deliberation over good ones. Some of these features like checks and balances or notice and comment allow other voices to critique and influence decisions.

When public safety is on the line, the right balance is essential between quickly implementing a safeguard to save lives and slowly settling on the best practice as not to harm economic activity or produce negative externalities. Policy and decision makers would do well to remember a few simple errors that can lead to bad outcomes. Keeping these examples in mind may provide some areas to consider before enacting a particular policy.

Today, we will examine three types of bad decision, each caused by a particular oversight. The first is decisions taken without consulting history. The second is acting with eyes set so far in the future that costs and effects in the present day are overlooked. Finally, we consider where people forget the underlying reason for policies and end up stopping good policies or implementing bad policies as a result. By reflecting on these types of mistakes, we can hopefully avoid unintended consequences.


Forgotten Knowledge

There is an old adage that those who forget history are doomed to repeat it. This warning is particularly relevant when an old issue rears its head. Whether successfully or in failure, our predecessors met this challenge before us, and it is our duty to learn from their experience.

Of course, as time goes on, contexts change and certain factors and conditions no longer align with the previous historical setting. That only means more careful review of history is warranted, not that it should be written off or overlooked. The moment we begin to believe we are more sophisticated or better equipped than our predecessors based solely on temporal relativity, we succumb to pride. And as we know, pride comes before the fall. True wisdom puts aside pride and allows lessons from the past or present to inform decision making. But it is not always pride, it can sometimes be genuine ignorance – just plain forgetfulness due to the passage of time.

The most explosive example that comes to mind is how a local government agency handled a beached whale incident on its shore. The lesson here is nothing more than the importance of institutional knowledge, review of history, and following and honing best practices. Leaders should ask if this problem has existed before, how it was handled, and what factors have changed. Then seek input before making a final call.


We Can, but Should We?

Perhaps this can be dubbed the Jurassic Park Problem: “Your scientists were so preoccupied with whether or not they could, they didn’t stop to think if they should.” This type of pitfall occurs when decision makers go live with something that needs more testing or experimentation. Perhaps in a regulatory sense, it needs more input or comment.

The challenge – how to combat mosquitoes. The solution – edit their genes so that lab-altered mosquitos will mate with the wild population, spread infertility genes, and decimate or destroy the wild ranks of mosquitos. The outcome – disaster.

The example explores good intentions, innovative thinking, and pushing the limits of what we’ve done before, where perhaps more study or even simpler solutions could achieve more effective and even cheaper outcomes.

The lesson for policymakers is to get the most input possible before trying something totally new, and thinking through all possible outcomes to assess the costs and benefits of the prospective policy. Where possible, the best way to regulate is to wait for private actors to try new things on small scale and when a best practice emerges, begin to codify it as a new baseline. Alternatively, policy begun at the most local level possible is ideal to allow lower-stakes case studies before unveiling policies to larger populations.

Forgetting the Purpose of Policy

Not unlike forgetting history, one area of policy malpractice is forgetting the underlying reason for things. Why do we do what we do, what are the benefits we currently reap that we have begun to take for granted and when we ax the policy we lose unexpectedly?

The example is preventing forest fires – seemingly a great good! But nature is better at forest management than humans are, so we would do well to remember and learn from it.

When Smokey the Bear came on the scene, the lesson was simple, you can prevent forest fires! So why do we manage forests? It’s obvious: to prevent forest fires. And how do we prevent forest fires? By managing forests!

Why does this sound so silly? Because there is a simple issue underlying the problem that the public seems to have missed. If we prevent all fires, all we do is stockpile fuel for the next big one. Unless there is such robust forest management that undergrowth is pruned and forests are thinned, the forests will be primed for a great disaster. The undergrowth can choke plant life by blocking sunlight, or simply be kindling for a fire later on. Natural fire cycles, revealed by history and tree rings burn off excessive undergrowth and younger trees, allowing stronger older trees to survive and even fertilizing the ground with the ashes.

The result of strong fire prevention is longer periods of peace, unblemished by small fires, with potential for enormous, expensive, and deadly fires fueled by thicker combustible undergrowth, pine needles, young trees, and more. It is absolutely desirable to prevent forest fires, which can get out of hand and harm lives and economic activity. But when we forget why we manage forests, and how to do it, we lose touch with the essential factors underlying our policies in the first place.

The lesson for policymakers is to carefully look at all the factors and benefits of policies, and remember why they were implemented in the first place. Before simply thinking a policy is obsolete, it is important to think about what will happen when it is ceased. In this particular example, the policymaker would consider what thwarting natural fires does. It is somewhat an inverse of the consideration, rather than stopping or changing a policy a predecessor implemented, it is implementing a new policy where predecessors allowed some natural course of action to take place. In each case, deliberate policymaking and robust input is essential before taking action. Then being willing to amend the course of action!



Written by Benjamin R. Dierker, Director of Public Policy


The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.