The Need for Humility in Policymaking: Lessons from Regulatory Policy

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Regulations impact a wide array of market and social activities that influence our daily lives. Regulations are attempts to correct perceived market failures, caused by information asymmetries, externalities, and principal-agent problems, and to provide public goods, which would otherwise be underprovided. Government actors are responsible for identifying these issues, weighing the costs and benefits of intervention, and designing and implementating regulations to improve society. Good regulations help mitigate issues in the economy without inciting new problems and without the costs exceeding the benefits of intervention. This requires intensive analysis and an awareness of the complexities of social life. Our society is complex and dynamic where people face knowledge and incentive problems, whether in the market, politics, or civil society. By examining this complex reality, we can better understand why regulations arise and persist and the challenges of reform. We argue that this approach to policymaking and policy analysis requires humility; an acknowledgment of the challenges we face when intervening in our society. This volume intends to cultivate an appreciation for the complexity of human decision making and the incentives that drive human behavior. By examining specific policy changes, it will delve into the effects of and lessons learned from regulations in financial markets, computer and internet governance, and health care innovation and delivery. This volume will be of interest to students, scholars, and policymakers who seek to understand the complexities of regulation in a dynamic social world.

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Creating effective public policy is hard: Policymakers never have all the facts and they cant predict all the consequences. Thus, a dose of humility is essential in policymaking and the researchers in this timely volume show why through insightful examples ranging from economic development in Pennsylvania to state Medicaid waivers. Its an important book for policymakers and analysts alike. -- Adam Millsap, Assistant Director of the L. Charles Hilton Jr. Center at Florida State University and affiliated scholar at the Mercatus Center at George Mason University
The Need for Humility in Policymaking helps to remind students, scholars, and policy practitioners of our limited capacity to anticipate how people will react to changes in their incentives. This volume makes it clear that overlooking a relevant aspect of culture, a key social norm, or the importance of local knowledge when designing policies can have dire social consequences. -- Rosemarie Fike, Instructor of Economics, Texas Christian University

Author Bio

Stefanie Haeffele is Senior Research Fellow, Deputy Director of Academic and Student Programs and a senior fellow for the F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics at the Mercatus Center at George Mason University. Anne Hobson is a Program Manager for Academic and Student Programs at the Mercatus Center at George Mason University.