03/05/2014 10:15 am ET | Updated May 05, 2014

Howard's Daily: The Hidden Causes of Bureaucratic Paralysis

The Hill newspaper hosted a breakfast forum last week on the state of federal regulation. The panel consisted of former senators Blanche Lincoln (D) and George Allen (R), Susan Dudley at the GW regulatory center, Robert Weissman of Public Citizen, and me. The tone was generally moderate, and everyone seemed to agree that calling for wholesale "deregulation" is not useful. Most regulatory goals are unassailable--say, for worker safety or clean water.

But most agreed that regulation (as it's practiced in the U.S.) is a bureaucratic nightmare, and often ineffective. Some panelists pointed the finger at unaccountable agencies who, year after year, write the regulations. Robert Weissman focused on insufficient enforcement resources. I pointed to overly detailed statutes and regulations which become instantly obsolete when circumstances change. There seemed to be general agreement on the need for a mechanism to revisit old laws to see how they're working--such as a mandatory "sunset."

So far so good. But then, prompted by a question from the audience, the panel began discussing how regulations should be structured. The senators both felt that laws and regulations should provide "clear metrics" by which the success of the program should be measured. Robert Weissman pointed out, correctly in my view, that many public goals embody moral and qualitative choices not readily quantifiable. What is the metric, say, for a successful special ed program? The number of students helped? What if the quality of the program is lousy? Moreover, anyone familiar with cost-benefit analysis knows how easily the numbers can be fudged. Metrics can be useful as a tool of analysis but not as the sole lodestone of success or failure.

While Robert Weissman did not buy into the notion of clear metrics, he did seem to believe that compliance with rules was a key to regulatory success. He pointed out that in the recent West Virginia chemical spill, the company did not have the required "materials safety data sheet" showing how toxic the chemicals were. But rules are just a rigid metric and often poor substitutes for right and wrong. For example, "MSDS" safety sheets required by worker safety regulations don't leave room for judgment, so information on highly toxic chemicals is buried in thick notebooks containing sheets describing the perils of "Joy" dishwashing liquid and other benign chemicals. Yes, it would be harmful to chug a jug of Joy, but most workers probably don't have that urge. Almost no one actually reads the thick notebooks on MSDS sheets. It's too hard to find any pertinent information. By not leaving room for human judgment to decide which chemicals are likely to cause harm, the rule requiring MSDS sheets is just a version of the boy who cried wolf.

Regulation can be coherent only if humans have room to use their judgment. Safety sheets should be displayed only for chemicals likely to cause harm. Letting people use their judgment doesn't mean they can do whatever they want. Everyone is still bound to honor the goals and principles, and, if there is a dispute, there's always a court to complain to. But accepting the role of human judgment opens the door to an open field of common sense instead of a bureaucratic jungle. There's no need to tangle everyone up in legal vines--the 950 page Volcker Rule comes to mind--if we accept that regulation, like every other life activity, requires human judgment. Bureaucracy could be radically simplified if it focused on goals and guiding principles instead of rigid rules and metrics telling people exactly how to do their jobs.

I had this discussion almost 20 years ago with Joe Dear, the head of OSHA (the worker safety agency) under Clinton. I had been highly critical of OSHA in my book The Death of Common Sense, because studies showed that all its thousands of rules detailing exactly what kind of equipment to use, etc., had done almost no good. How could that be? It seemed that focusing on rule compliance had diverted attention away from the most important factor in safety--a workplace culture valuing safety training and attitudes.

Joe Dear turned out to be a remarkable public servant. He looked like a triathlete, and had an unusual willingness to question bureaucratic assumptions. He started encouraging regional managers to rethink how OSHA did its job. In Maine, OSHA entered into an informal arrangement with large employers to promote safety attitudes in lieu of mindless compliance with all the rules. Once the focus was on how workers did their jobs, instead of handing out fines for, say, having a railing of 38 inches instead of the required 42 inches, the workplaces became safer places. Letting humans use their judgment--both regulator and regulated--proved to be far more effective than focusing on compliance with thousands of rigid rules.

Last week on the Bloomberg ticker the news read that Joe Dear, who had become the Chief Investment Officer of Calpers, had died of cancer at age 62. What a great guy. What America needs, now more than ever, are public servants like Joe who are willing to buck the system by taking responsibility to achieve public goals.

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