An Evolution, the Next Generation Logic of Public Sector Regulations

Seed Infotech Ltd., accessed 3/3/2018

The following is a framework for potentially regulating different industries with minimal government expense, yet maximum effectiveness. It comes from the findings of Casari and Plotts' work on humans regulating common pool resources, such as natural or agricultural ones, to the shared value of any given industry and company.

 

Based on Casari and Plotts' research in resource management (from Elinor Ostrom's book, Understanding Institutional Diversity), a more effective way to regulate markets could be to determine the rules in advance, and let the competing companies pay for surprise inspections of their competitors with costs increasing for each request within a certain timeframe. That way, government officials only would need to know if there is evidence of rule breaking, not the intricacies of a given industry or market, and the companies get to spy on each other with limited trolling abilities. The government may initiate its own surprise inspections at cost on the industries. This may save government money and effort in regulating the economy, and decentralize power to the private sector to effectively police themselves under agreed upon rules and legal frameworks to protect citizens and the environment. Let penalties be strong enough to cripple initially, but with a path for redemption under a long statute of limitations. Sanctions get worse as they are continuously violated.

It should be noted that developing and defining the regulations does need an intimate knowledge of the industry, how companies work together, what is needed and expected, and what is considered reasoned and fair in light if evidence on and from the environment, economies, and the society itself. This is the field of the independent applied social scientist and empirical economist. Human societies, if they value their cohesiveness, do not accept or tolerate their truly antisocial individuals getting real influence in the society.

The key ingredient here in this mix is that the authority responsible for enforcing the law needs to be seen as legitimate and acceptable. Law enforcement becomes significantly difficult without cooperation from the community you are trying to look after. Therefore, lawmaking and the application of law needs to be felt as honestly legitimate and worth preserving by the people who need the laws and law enforcement strategies the government can provide. People need to be included in the processes of government and governing in significant and meaningful ways, and this connection must be kept up and continuously reaffirmed in order for it to be successful.

If enough people don't respect the law or the lawmakers, then the authorities have the challenge of winning the legitimacy of all other actors in society to prevent the rebellion from becoming a socially broad-based revolution. For example, the Bolsheviks, Viet Minh, Iranian clerics, and Chinese Communists each were able to join together with other elements of society against the genuinely unpopular governments. Unless the rebels can successfully unify the other elements of society against the authorities in question, they will ultimately be able to only get a possible stalemate, if that from the government. For example, the Whiskey Rebellion in the US fizzled because the government was seen as a legitimate authority, and was thus able to make a show of force to disperse the rebels. If the government plays an even and genuinely kind, yet forceful hand with the rebels, the movement be less likely successful. If those disconnected rebels succeed in taking over government, they'll be less likely seen as legitimate authorities if the government had maneuvered itself successfully. If those rebels then do poorly at governing, they will not likely last (as was often the case during the French Revolutions and their fallout periods).

Therefore, we have both a proposed new framework for making regulations with industries for society's and the environment's ultimate benefit, and the reasoning and evidence behind it. By encouraging competitive companies to have an share in regulating themselves, with government acting as a fail-safe in case of collaboration by all companies, we may be able to get more efficient and effective regulation in key industries if we're able to sow enough distrust and disunity among the competitive companies in the private market.