Rowman and Littlefield International

The Need for Humility in Policymaking

Lessons from Regulatory Policy

Edited by Stefanie Haeffele and Anne Hobson

3 Reviews

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.

Hardback ISBN: 9781786611345 Release date: Aug 2019
£85.00 €119.00 $130.00
Paperback ISBN: 9781786611352 Release date: Aug 2019
£29.95 €41.95 $44.95
Ebook ISBN: 9781786611369 Release date: Aug 2019
£29.95 €41.95 $43.99

Series: Economy, Polity, and Society

Pages: 330

Monograph

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.

Introduction by Stefanie Haeffele and Anne Hobson

Chapter 1: Economic Flaws in Computerized Socialism by Joseph Kane

Chapter 2: Reading Between the Lines: Rulemaking Discretion in the Federal Railroad Administration by Stephen Jones

Chapter 3: Williamsport Revisited: Applying an Austrian Lens to the Lumber and Fracking Booms of Williamsport, Lycoming County, Pennsylvania by Erika Grace Davies

Chapter 4: The Fable of the Packets: A New Institutional/Market Process Approach to Network Neutrality by Nicholas Krosse

Chapter 5: Community Broadband, Community Benefits? An Economic Analysis of Local Government Broadband Initiatives by Brian Diegnan

Chapter 6: Entry Regulation in Hospital Markets: The Impact of Certificate of Need Laws on Hospital Concentration by Ariel Slonim

Chapter 7: Section 1115 Waivers: An Increasing Part of the Medicaid Program by Kelly Ferguson

Chapter 8: Monetary Policy After the Crisis and Alternative Systems for Macroeconomic Stability by Chris Kuiper

Chapter 9: Failed Interventions: The Increasing Ineffectiveness of Monetary and Fiscal Policies in High-Debt Environments by Katelyn Christ

Chapter 10: Risk-Based Capital Regulation and Bank Asset Allocations by Kristine Johnson

Chapter 11: Legal Entity Identifiers as Public Goods and Regulatory Management of Financial Risk by David Rann

Chapter 12: Economic Effects of the “Volcker Rule”: Restrictions on Banking Activity and their Consequences for Economic Stability by Derek Thieme

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.

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3 Reviews

Creating effective public policy is hard: Policymakers never have all the facts and they can’t 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. It’s 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

Economists, even after the Financial Crisis of 2007, haven’t exactly fostered a reputation for policy humility. This is primarily because mainstream economic models often do not fully incorporate concerns for knowledge and incentive problems in policy implementation. Thus, most policy advice proffered by economists implicitly assumes that policymakers, and the economists advising them, have both the adequate information and the proper incentives to make precise interventions in complex economies. The lack of concern for these real-world policy challenges makes policy interventions seem much more simplistic than they actually are. This in turn emboldens policymakers to undertake interventions without due humility. That lack of humility often leads to unintended consequences that, in at least some cases, are worse than the problems the policy was intended to address. In The Need for Humility in Policymaking, Haeffele and Hobson bring together twelve case studies of policy, ranging from telecommunications to banking policy, detailing the economic consequences of hubris in policymaking. Collectively, these chapters make a compelling argument for both economists and policymakers to embrace humility when it comes to policymaking.

Daniel J. Smith, Director, Political Economy Research Institute at Middle Tennessee State University

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