A Factor for Paralysis in Regulation & Legislation

A common complaint today in the United States is that nothing gets done. We are frustrated by political leaders who can’t pass important legislation. We dislike how slow local governments are to update infrastructure, adopt new technologies, and make improvements in the places we live. Gridlock has become the norm, and the actions that governments take seem to be too little too late.

 

But is this criticism really fair? Is the problem slow governments, ineffectual legislators, and inept public officials? Daniel Kahneman in his book Thinking Fast and Slow highlights a basic aspect of human psychology that might be one of the major contributing factors to the paralysis we see in governance today, and it has nothing to do with the quality of officials and legislators, but instead is all about the structures and systems of incentives that elected officials and policy actors respond to. The precautionary principle, a side effect of our general tendency toward loss aversion and our general stance against taboo tradeoffs drives our paralysis, and it is a logical response to the structure of many of our governing institutions.

 

Governments are necessary parts of human society, helping us establish rules for how we will live, interact, and make decisions collectively. Governments make investments, determine safety and efficacy standards, and help allocate resources across populations. In each of these functions of governance there is a possibility for error, a possibility for failure, and risk involved in the decisions. This is where the precautionary principle comes in. Kahneman writes,

 

“In the regulatory context, the precautionary principle imposes the entire burden of proving safety on anyone who undertakes actions that might harm people or the environment. Multiple international bodies have specified that the absence of scientific evidence of potential damage is not sufficient justification for taking risks. … the precautionary principle is costly, and when interpreted strictly it can be paralyzing.”

 

When risk is involved in decision-making processes, elected officials and public leaders are held responsible for any the bad outcomes that come to pass. There will always be a chance that a government investment fails, and no public official wants that failure to reflect poorly on their decision-making. There is always the risk that allocated resources could be misused, and it is often the official who approved the resource allocation (as well as the bad actor themselves) who faces consequences. When there is a deliberate decision to trade-off some level of safety or to accept an increase in risk in exchange for improved economic performance, faster traffic flows, or reduced government spending, public leaders and elected officials are the ones who look bad when something goes wrong.

 

The way our governance operates today encourages the precautionary principle. Risk is incredibly dangerous for public leaders, so the safer and more costly approach feels like the right choice in each individual decision. Over time, however, the costs add up, the paralysis becomes suffocating, and the public becomes dissatisfied and cynical. The answer might not be to completely cut out the regulation and safety apparatus of the government (that didn’t work well for President Trump who eliminated the NSC directorate for global health and security and bio-defense). The answer will be new structures for governance, new ways to allow government to take risks, and new ways to understand the risks that we all take in our lives. None of these are easy or simple transitions, but it is likely what we need in order to survive in a more complex and turbulent world.

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