Unintended Consequence: 1 On, 2 Off

  • Unintended Consequences of Red Tape Reduction

Many government programs in reducing red tape have a 1 On,  2 Off or One-for-One rule. The UK, Canada and NSW have all embraced the idea that each new regulatory or legislative instrument should be matched by the repeal or removal of one or more regulations.

It doesn’t take much to see what sort of unintended consequences could follow from this.

Gaming the system for convenience and avoidance of embarrassment immediately suggests department managers should bank no-impact regulations as a pool to repeal when implementing new regulation.

Otherwise every new regulation – and there are always new regulations – would cause major effort under short timelines to find repealable regulation with minimal impact.

When there are Repeal Days – as are increasingly common – the possible pool of repealable regulation is reducing. This provides further incentive to bank regulation for later use.

None of this includes the problem that Repeal Days removing ‘dead’ regulation have no meaningful impact on economic behaviours. ‘Dead’ regulation provides no incentive or disincentive – removing it is fundamentally a tick-box exercise in delivering big numbers.

Nor does it include the problem that it is an unprincipled policy. That it is an arbitrary number is clear from the fact that NSW seeks 2 off for every 1 on, while the UK promotes the idea of 1 off for 1 on. Arbitrary policy is an invitation to gaming.

Regulatory reform deserves better.

 

 

 

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