Double Aspect

This post is co-written with Akshaya Kamalnath

New Zealand has plans to address an ‘over-regulation’ problem. Wow – the little country has punched above its weight again. One of us has already discussed a component of these plans, a proposal for a Regulatory Standards Bill. Here we turn to another scheme, which, while less comprehensive, can also do good.

The government’s press release says, in part:

The Red Tape Tipline is an online resource where the public can make submissions on regulation that affects them.

…

We want to hear from tradies, farmers, teachers, chefs, engineers – every person doing productive work. If there’s red tape in your industry that needs cutting, we want to know about it. The Ministry might not be able to resolve every issue that’s brought to its attention straight away, but we are keen to understand more about experiences with regulation.

If red tape is holding you back, it’s likely holding back others. We want to avoid imposing unnecessary costs or restrictions on New Zealand businesses and workers.

Feedback will help flush out bad regulations that need to be removed, prioritise future regulatory reviews, and identify legislation that needs change.

This is a great initiative because it shows that the government knows, or that is our reading anyway, that it cannot anticipate how everything works on the ground and that the people to whom the laws apply have insights into what might be going wrong. This is the idea Hayek put forth in his ‘knowledge problem’ paper: information is dispersed, and authorities, no matter how well-intentioned they are, just don’t know enough about how the world works to be sure that the rules they make will do what they want them to. What is more, as the late James C. Scott argued in Seeing Like a State, even what the authorities think they know is often the result of an intellectual order they themselves impose on what is actually a far messier underlying reality ― with the consequence that this supposed knowledge leads them astray.

These ideas are behind the proposal one of us put forth (in a book on diversity in corporations): company management should use exit interviews and other workplace surveys to glean what problems might be affecting the firm in question and then come up with firm-specific solutions. But as was also argued there, if management then does not address the issues that were reported, employees will lose confidence in the exercise and will simply not participate next time around.

These concerns hold true for the government tipline too. So, its success will depend on how much the government follows through after the reports are made. Since this is a matter of public confidence, transparent reports about which issues reported through the tipline have been dealt with and which have not (and, ideally, explaining why) would be useful. (Indeed, this is an approach that would be taken under the proposed Regulatory Standards Bill.)

We can be no more than cautiously optimistic. The tipline plan can easily enough devolve into a gimmick or an empty promise. But we are nonetheless encouraged by the fact that, for a change, a government is trying to not to silence or indeed destroy the local knowledge available to individuals, as the administrative state all too frequently does, but to gather this knowledge and so to improve itself.