Red tape reduction is an incentive problem

Darcy Allen and I have a new piece out in The Spectator Australia: “Cut the red tape!”

Attempts to systematically measure and then cut red tape date back to at least the 1990s. So we now know a lot about what works, and what doesn’t.

In fact, the Albanese government could just draw on the experience of the last decade for policies. Almost every government this century has launched an anti-red tape campaign. But very few of these campaigns have actually worked. As we argue:

But we have nearly three decades of experience about what works and what doesn’t work to reduce red tape in the economy. And the results have always been a bit disappointing.

They tend to fail on two grounds: measurement and incentives.

We detail the many ways governments have tried to measure the burden of overregulation. But the fundamental problem is incentives:

Ultimately, all of these approaches assume that politicians want to reduce red tape in the first place. Right now, the Albanese government does. But all reform takes time – especially regulatory reform, which requires a granular attention to detail as departments slowly sift through the stock of regulation to see which are causing the most harm.

Few politicians ran for Parliament because they were keen on auditing old law. They all want to pass new ones. And the demand for new regulations is constant. Whenever anything goes wrong there is a public drumbeat that ‘there oughtta be a law’.

But it can be done! We conclude the piece by discussing a case study that we’ve done quite a lot of work on: the example of British Columbia which managed to nearly halve its measured red tape and got significant economic benefits as a result.

The piece is available at Spectator Australia and will be at chrisberg.org in the future.

And you can read more from Darcy at his Substack too.