Visitors Now:
Total Visits:
Total Stories:
Profile image
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

Principles-Based Regulation

Wednesday, May 30, 2012 18:22
% of readers think this story is Fact. Add your two cents.

(Before It's News)

When we think of regulation, we think of specific rules that spell out the boundaries between what is approved and what is forbidden. For example, requiring credit card issuers to give 45 days’ notice prior to a rate increase. I call this bright-line regulation (BLR).

What I want to propose is an alternative approach, called principles-based regulation (PBR). With PBR, legislation would lay out broad but well-defined principles that businesses are expected to follow. Administrative agencies would audit businesses to identify strengths and weaknesses in their systems for applying those principles, and they would punish weaknesses by imposing fines. Finally, the Department of Justice would prosecute corporate leaders who flagrantly violate principles or who are negligent in ensuring compliance with those principles.

The fundamental flaw in BLRs is that they pit regulators against market actors, to the benefit of the latter. Bankers, for example, have regularly proven their adeptness at outmaneuvering regulations, keeping to the letter of the law while mocking its spirit. PBRs would do much to address this issue.

Full Arnold Kling post worth reading.

Read more at John Goodman’s Health Policy Blog



Source:

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.