First, let's define success. Much of what government does involves getting people to behave in a certain way that enhances the overall well-being of the community. "Regulation" is kind of a misnomer, as it is just one means to the ultimate end — that people comply with an established behavior, norm or rule. We call this "compliance."
There is more to the bottom line, however. Not only do we want people to comply, but we want compliance to cost as little as possible. This includes the cost of the burden on the complier as well as the cost to government of making sure people comply. So, the bottom line is maximizing compliance and minimizing cost.
Using a definition like this opens the door to creative possibilities. Historically, we have used regulation to achieve compliance. It involves promulgating a rule or law, inspecting behavior and penalizing non-compliance through some sort of due process. This approach is both necessary and expensive.
If we could complement expensive enforcement with getting people to comply voluntarily, it would improve the bottom line. Look at the pictures below. Each demonstrates an important principle for raising voluntary compliance while reducing cost.
But you have to do a little translating to make this work. I'm not suggesting that you replicate these examples exactly. Rather, understand the principle that makes them work in one setting and apply that principle in your own compliance setting.
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This speed sign, in Sweden, has another twist. It photographs your license plate and, if you are within the speed limit, it automatically enters you in a lottery.
Another principle: If compliance is rewarding, people will raise their compliance. This is distinct from and complementary to the principle of punishment that underlies traditional regulation.
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OK. These things are cute. But, how about some examples from a higher-risk compliance function, such as transportation security?
Pictured below are some happy travelers participating in the Transportation Security Administration's new "pre-check" program. Through this experimental program, frequent flyers who register through their airlines get to use a special line at airport security. They need not take off their belt and shoes, nor take their laptop out of their bag, nor display their toiletries. And the line is very fast.
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One of the highest-risk government compliance functions is regulation of the nuclear power industry. This is an area where we cannot afford non-compliance. Yet the Nuclear Regulatory Commission is pioneering another compliance principle called "performance-based regulation."
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Many of those procedures have now been replaced with performance standards. For example, there might be a performance standard that says cooling-water pipes need to be able to withstand so many pounds per square inch of pressure.
This form of regulation does two things. First, and foremost, it makes the plants safer. We no longer rely on welding procedures and pipe construction procedures — instead, we focus on the safety bottom line.
But there is another benefit. In some cases compliance may be less expensive — for NRC inspectors, testing pipe-pressure standards is simpler than inspecting all the procedures. Nuclear-plant operators are now innovating ways to meet the performance standards, and they are learning from one another. Sometimes they can lower their burden of compliance. This dynamic has the potential to create a learning system whereby we are continuously finding better ways to build and operate nuclear-power plants.
These are a few promising best practices. With a little imagination and creative engineering, you can deploy these principles to win voluntary compliance in a wide range of functions. You cannot and should not eliminate enforcement; some people simply defy the expectations. Yet you can raise total compliance and reduce the cost to government and the burden on the complier.