Ineffective, Minus 5 Regulations
Mark Jenner, Ph.D.
Poorly written federal regulations
do more harm than good. They erode the right to
own and use private property and are an inefficient use
of public and private resources. Economic growth
is impeded if regulations add more costs than benefits.
Such rules fail from lack of design.
There is no standard process for
grading regulations, but one can be assigned. On a
scale of 1 to 10, with a score of “10” being transparent
and effective and a “1” barely providing a net benefit,
counter-productive rules score a “minus 5.”
This paper describes how economic and scientific factors
influence whether a regulation will work as intended –
or scores that minus five.
Most people learn to respect each
other’s property without needing a law. Laws and
regulations have been established to moderate the damage
to everyone from the bad actions of a few individuals
(like robbers and murderers) and protect the right to
own and use private property. Regrettably, these
punitive laws have become the ‘tool of choice’ for any
issue that policymakers dislike. Short run
political gains create heavy long run burdens on
economic growth.
Laws, regulations, research,
education and incentives broadly define public policies
that influence resource use in the production of food
and fiber. Public policies can only be effective
when they address real gaps between the behavior of
individuals and science, as we now know it.
Science and Technology Facts. Farmers and
ranchers must respect the laws of nature to be
successful. They work daily with biological,
chemical and physical facts such as:
- Crops and livestock cannot grow without water
and nutrients.
- Wildlife carries disease and, unless separated
from farm property, will infect and prey on farm
crops and animals.
- People need wholesome, healthy food to live.
In a perfect world, everyone would understand these
natural laws. The shaded circle on the right
represents all of science (known and yet-to-be
discovered).
Cultural, Economic and Behavioral Facts. We do
not operate on perfect information though. We have
access to very detailed information that we may not
fully understand. Other times having only a few
scientific facts, and too much fear of the unknown, adds
more confusion than not having any of the facts.
Choices are made based on limited information.
When the economics and human behavior (dashed circle
on right) are added to the science there is some
overlap. The overlap represents the choices people
make when they have solid scientific facts.
Behavior without a basis in science lies outside the
science circle.
Science that has yet to be discovered lies outside
the dashed circle.
Laws, Regulations, and Policies. Our laws,
regulations, and policies provide the framework to
assist morally challenged people in avoiding choices
that impinge on the rights of others.
Over the years, the regulatory framework has been
expanding. The result has been the generation of
many costly, ineffective rules.
The diagram on the right shows how the collection of
all the possible laws, policies and programs interact
with all the science facts and behaviors.
It is possible to have laws based on science that
have little to do with behavior. It is also possible to
have laws that reflect human behavior, but not science.
Relative Truth. These three circles represent
all the scientific knowledge, all of human behavior
(rational or not), and all the laws and regulation
designed to help everyone respect private property
rights.
Areas ‘A’ and ‘B’ form a zone of ‘relative truth.’
This is where effective policies naturally exist.
The Area ‘A’ represents the laws that provide a
greater benefit relative to cost. Not all the laws
and policies in Area A will be equally effective.
Examples of effective policies are our national
animal health programs, regulations on feedstuffs, and
also those that lower the cost of doing business.
These rules provide benefits that are greater than their
costs.
Area ‘B’ represents behavioral choices that respect
the rights of others without the need for a law.
Minus-Five Regulations. There are plenty of
current laws and policies that fall outside of Regions A
and B. Because such rules are not based on the
best available information, any change they might affect
will cost more to implement than any benefit that is
gained.
Laws and policies that do not capture the desired
behavior, that do not originate in sound science, and
those that miss both the behavior and scientific facts
are candidates for scoring a minus-five.
A rule that falls outside Region A such as Point C,
is based on good science, but fails to affect the
desired behavior. A great example of this is the
very detailed labels distributed with prescription and
non-prescription medication. There is so much
technical information contained on the labels that no
one reads them.
A minus-five rule that falls at Point D is not based
on science and interferes with achieving the desired
outcome. Examples of such rules are those used to create
the federally mandated Water Quality Inventory Report.
Some states collect very good data on impaired water
bodies. Other states do not. When all the
data is mixed together, even the good data is
confounded. In recent years efforts have been made to
improve the underlying science.
These are minus-five rules because they create more
costs than benefits.
Conclusion. Policy design, and the degree they
reflect economic and scientific factors, determines
whether a rule works as intended – or whether it scores
a minus five. Regulations will fail from poor
design when they do not reflect the best information
available. Only laws and regulations that
effectively integrate science and human behavior, have a
possibility of providing a net benefit.
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