Senior fellow Charles Kenny's weekly article in Foreign Policy on regulation.
From the Article
Fatality rates on roads in many developing countries are hideously high -- an estimated 130,000 people die on the roads in India alone. Buildings in those same countries often collapse without even the provocation of an earthquake -- the result of substandard construction. Many of these deaths could be prevented with regulation -- speed limits, car safety standards, building codes. Surely, then, the answer is for legislatures and executives to put more regulations on the books?
Actually, no. Most of these deaths are associated with regulations already in place that are being ignored. That was the case with building collapse in the Haiti earthquake last year, for example: There were codes; they just weren't enforced. And this isn't a problem limited to poor countries. In the developed world, unenforced regulation is a major cause of bank collapse. Meanwhile, we license florists and hairdressers to no noticeable benefit. That suggests developing countries -- and probably developed ones too -- need considerably fewer regulations so that they can focus on enforcing the ones that really matter.
One big problem with regulatory enforcement in the developing world is that those charged with regulation are understaffed, undertrained, underpaid, and lacking in oversight. But the problem runs deeper than technical capacity. A lot of regulations in the developing world are used -- and often designed -- by politicians and bureaucrats to extract bribes or other favors rather than to actually make things safer. A survey of driving tests in India, which leads the world in traffic fatalities, found that only 29 percent of learner drivers took the mandated test before receiving their license, and 61 percent failed a subsequent surprise driving test. A linked experiment, meanwhile, found that those people who hired touts to help them get a driver's license were effectively exempted from the test altogether. Those unfortunate individuals who actually took the test -- even though they were on average better drivers -- often failed.