Learning from Regulatory Disasters

Regulatory disasters are catastrophic events or series of events which have significantly harmful impacts on the life, health or financial wellbeing of individuals or the environment. They are caused, at least in part, by failures in, or unforeseen consequences of, the design and /or operation of the regulatory system put in place to prevent those harmful effects from occurring. Regulatory disasters are horrendous for those affected by them. Because of that we have an obligation to learn as much from them as we can, notwithstanding all the well-known challenges related to policy and organisational learning. The article focuses on five distinct and unrelated regulatory disasters which, although they occurred in apparently unrelated domains or countries, contain insights for all regulators as the regulatory regimes share a common set of elements which through their differential configuration and interaction create the unique dynamics of that regime. In the regulatory disasters analysed here, these manifest themselves as six contributory causes, operating alone or together: the incentives on individuals or groups; the organisational dynamics of regulators, regulated operators and the complexity of the regulatory system in which they are situated; weaknesses, ambiguities and contradictions in the regulatory strategies adopted; misunderstandings of the problem and the potential solutions; problems with communication about the conduct expected, or conflicting messages; and trust and accountability structures. * Professor of Law and Pro Director for Research, London School of Economics and Political Science. This article was given as the Sir Frank Holmes Memorial Lecture in April 2014 when the author was the Sir Frank Holmes Visiting Professor of Public Policy at the Victoria University, Wellington. I am grateful to those attending the lecture and participating in subsequent discussions for their comments and to Judy Kavanagh and Peter Mumford for their comments. All the usual responsibilities remain my own. This paper has been published in (2014) 10(3) Policy Quarterly 3-11.