jump to navigation

How to Pick the Regulators January 22, 2011

Posted by federalist in Regulation.

Paul Rubin explains why deregulation under Obama is not likely to happen, based on his years as a deregulator for Reagan:

The permanent staffs of the agencies were always interested in more regulation, either because of self-selection or because promotions and power increase in a larger agency. It also helped that we deregulators (generally economists) were not usually interested in permanent government positions, because reducing the power of the agency is a sure way to make enemies.

(For an excellent book on this problem pick up James Wilson’s Bureaucracy.)

It sounds like the executive branch needs something analogous to jury duty, where top regulators are pulled from industry. To the degree that their industry affiliations present a conflict of interest in deregulation, at least they will counterbalance the permanent regulatory staffs’ asymmetric interest in increased regulation.

One particular example recently brought to mind is Richard Bookstaber: A veteran of the finance industry who more than a year ago accepted a role as Senior Policy Advisor in the SEC’s Division of Risk, Strategy and Financial Innovation. (I was reminded of him because the uncannily prescient book he published four years ago is apparently still being plagiarized.)



1. Tim Harford - January 24, 2011

Tim Harford here, the writer you are accusing of plagiarism. I based my article on two books, neither of which were written by Richard Bookstaber. Charles Perrow wrote “Normal Accidents” in 1984, fully developing his theory with some of the examples I used in my piece. The first person I am aware of to apply the analysis of industrial accidents to finance was James Reason, in his 1997 book “Managing the Risks of Organizational Accidents”. I interviewed both men for my article and read their books in great detail – hence my acknowledging their work. I didn’t interview Rick Bookstaber and the ideas in my article are from Perrow and Reason, not Bookstaber.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: