Regulatory Incentives

There was a wonderful article in the most recent Weekend Australian.  The article was a review of a book by Melbourne’s own Jason Murphy called Incentivology.  Here are the first few paras from the Oz article:

At the turn of the 20th century, the French colonial powers decided to bring civilisation to the Vietnamese city of Hanoi in the form of sewers. They began the engineering project, naturally, in the leafy European quarter, building tunnels to channel waste from their colonial mansions.

This, it turned out, was pleasing not just to the humans: the rats of Hanoi welcomed the palatial new habitat provided for them and began to reproduce in unprecedented numbers.

Fearful of disease, the colonial masters put in place an incentive scheme. They would encourage the locals to kill rats by paying for every tail presented as proof.

The plan was phenomenally successful, growing in one month from 1000 to 15,000 rats slaughtered a day.

Enterprising locals, having discovered this profitable new market, were now breeding rats to supply it. When the French discovered the rat farms, they shut down their incentive scheme, likely causing the release of thousands of now unsaleable rats into the city. Within months, bubonic plague came to Hanoi.

This tale came to mind when reading Scott Hargreaves’ (of the IPA) latest contribution to the Spectator mag – When regulators roam out of control:

… using world-leading AI techniques revealing the number of regulatory restrictions in Federal legislation has increased from about 2,000 in the late 1970s to 95,000 by 2015.

Timing is a wonderful thing and with that, ASIC yesterday released its latest corporate plan for 2019-2021.  This latest plan neatly over-wrote ASIC’s corporate plan for 2018-2022.  And within ASIC’s latest corporate plan are 17 pages of actions and 0 pages of review of the previous plan.  Planned actions included:

Launching a series of videos with influential and inspiring Australian women to encourage all women to have money conversations with friends and family.

But if you looking for results, don’t look at Royal Commission reports.  Look at ASIC’s self measures.  The only thing missing seems to be the number of likes.

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23 Responses to Regulatory Incentives

  1. Roger

    Pardon if I interrupt you while you’re blowing your own horn, ASIC, but do you realise there are c. 2 000 000 small businesses in Australia?

  2. Bruce of Newcastle

    engage verb
    en·​gage | \ in-ˈgāj , en-\

    6 a : to enter into contest or battle with
    //engage the enemy

  3. Behind Enemy Lines

    Which reminds me that despite our justified anger at individual politicians, the long-run solution probably lies in system-wide incentives.

    “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or it they try, they will shortly be out of office.”

    ― Milton Friedman

    For ‘political climate of opinion’, substitute ‘workable e-rat-ication incentives’.

  4. Chris

    I like the idea of assessing responsiveness, customer service, value for money by a certain Government Agency – to wit, WA Police’s firearms licensing services.

    Unnecessary obstruction, wasted months, abusive interpretation of legislation… what’s not to like?

  5. Nob

    Government sponsored trade missions are a particular gripe of mine.

    These useless beings go and swan around their foreign counterparts and deliver SFA value.

    I encountered one in Kazakhstan years ago when I’d already been there and made business.

    They had no idea about the sort of thing I was doing and trying to do and offered nothing of use to me.

  6. Nob

    Another favourite was a Western Australia delegation that turned up at an offshore oil show in Norway or Aberdeen.

    I asked them if they’d been talking with (successful medium sized exporting technology company in Henderson. W.A.)

    He’d never heard of them.

    So I dragged him round to their stand and introduced him to the CEO.

    He started blabbing about WA govt being there to help etc so CEO said “OK , let’s talk about payroll tax.”

    Govt guy couldn’t get out of there fast enough.

  7. mem

    I’m not sure why but whenever I hear stories of rats I think of the Andrews government and its planning decisions relating to wind and solar farms. Here’s the latest sneaky decision that breaks its own rules. So tell me who is winning out of this. It will make no difference to the climate, will take prime agricultural land out of production and add to the cost of electricity in Victoria. Any one know who owns the company? https://www.stockandland.com.au/story/6349947/locals-savage-solar-decisions/?cs=4593

  8. …women to have money conversations with friends and family.

    WTF?

  9. Roger

    …women to have money conversations with friends and family.

    WTF?

    You can be sure that sentence was written by a woman.

    Verily, a committee of women.

  10. Howard Hill

    Launching a series of videos with influential and inspiring Australian women to encourage all women to have money conversations with friends and family.

    The ones I know are already doing this. They’re always complaining and discussing the increased costs of energy and are sick and tired of their ALPBC telling them lies about the costs coming down once we blow up the remaining coal powered electric car chargers.

  11. mem

    The ones I know are already doing this. They’re always complaining and discussing the increased costs of energy and are sick and tired of their ALPBC telling them lies about the costs coming down once we blow up the remaining coal powered electric car chargers.

    According to this summary of new findings it doesn’t look like the cost of electricity will be coming down unless we stop the roll out of renewables.
    “Some fresh new scientific papers are confirming that renewable energies, particularly wind and solar power, are not delivering what was promised – not by a long shot.

    They likely will become far more of a burden than a benefit.” “The authors conclude that their paper “proves that both income and risk of household poverty are directly linked with renewable energies, in both the short- and long-run” and that the shift from fossil fuels to renewable energy sources “has virtually doubled the price of electricity.” source https://notrickszone.com/2019/08/28/hitting-the-poor-hard-new-studies-show-renewable-energies-have-virtually-doubled-the-price-of-electricity/

  12. feelthebern

    ASIC regulations should be reduced by half.
    ASIC penalties should be increased 10 fold, with prison sentences being increased substantially.

  13. Mother Lode

    The only consolation in the midst of the fervid effort to bend, press, twist and mold Australia into their cartoon visions* is the certainty that their means of forcing change will be so clumsy and cack-handed that they will impress no one not already hell bent on the same silly retarded crusade.

    For example, in a free world the distribution of genders to profession is the result of individual responses to myriad considerations – tradition, interests, family, preferred emphasis on career, etc. The government just says “50% – because half and half is fair”. More women stay home to raise the family than men. They make that decision as a cooperative unit. They are living the choice they made. Government just says “Should be 50%”.

    And they think to manage the millions with an amateurish video with robotic script, and crappy graphics.

    You think the government is bad now? Imagine if they were competent in their agenda!

  14. Vagabond

    We will never have cheap or reliable power again in this country. Even if by some miracle governments develop the gumption to take on the luddites, stop subsidising “renewables” and build proper base load power stations, either coal, gas or nuclear, they will be delayed for years by protests and regulatory obstacles. They will take an excessive time to complete and cost much more than they should because of CFMMEU depredations. The deindustrialisation of the country is an inexorable process that has been started and cannot be stopped.

  15. Terry

    mem
    #3143474, posted on August 29, 2019 at 2:59 pm
    “wind and solar power, are not delivering what was promised”…

    …but very much what was intended.

  16. More women stay home to raise the family than men. They make that decision as a cooperative unit. They are living the choice they made.

    Imagine were it made mandatory for dangerous jobs like mining to be 50/50 men/women (if that ratio could ever be achieved) and women started dying in workplace accidents in the same numbers as men. What sort of hue and cry would ensue?

  17. mem:

    So tell me who is winning out of this. It will make no difference to the climate, will take prime agricultural land out of production and add to the cost of electricity in Victoria. Any one know who owns the company?

    Owner schmoner.
    Drones can be used for other purposes than lifting a bloke out over the water to fish.
    If the Greens can do their civil disobedience schtick, then so can others.

  18. Bruce

    I remember “incentivation”, a term contributed to Australian political discourse by Jackboot Johnnie and for which he was ruthlessly mocked by the usual suspects.

    It is a word that seems to have managed to survive in other political realms.

    Probably no worse that the appalling linguistic abominations that pass for informed opinion across most of the body politic in this antipodean s**thole.

  19. Anonandon

    Bruce, I remember it differently – incentivisation – and it was a tough sell for Johnny. Now there was a man with resilience.

  20. Eyrie

    Chris, WAPOL and CASA. Both arseholes.

    As for ASIC, a close relative worked in the Perth office. Once asked what they actually did. Got told they investigated fraud and malfeasance involving companies – 12000 a year in their office and most of the claims had merit. So I asked how many got prosecuted – about 20.
    One in 600 odds. I figured any con man would take those odds.

  21. JC

    Eyrie

    12,000 seems overblown. To those no-hopers being late with an ASIC fee is considered fraud.

  22. Eyrie

    It was 12000 complaints from members of the public.

  23. Walter Plinge

    Incentivology is late to the party. Stephen Kerr identified the concept in his seminal 1975 paper, On the folly of rewarding A, while hoping for B..

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