Read more about the article The End of Net Zero
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The End of Net Zero

The first Insights blog of the new year continues to emphasise a central theme of earlier pieces: the dangers of taking an overly narrow view of policy challenges, whether that be the result of failure to recognise wider, salient features of a broader context, or of taking unduly narrow view of target outcomes in policy responses to the challenges. The same theme is to be found in earlier RPI critiques of ‘pixelation’ in regulatory assessment, grounded in an analogy with perceptions of a digital picture which are drawn to a relatively small bloc of pixels and focus disproportionately on it, to the neglect of all else. The blog contains a striking quotation from Keynes, who was ever unpixelated.

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Read more about the article Markets versus regulation?  Drop the ‘versus’!
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Markets versus regulation?  Drop the ‘versus’!

November’s pre-conference Insights blog is concerned with the meaning of the word ‘market’. The term appears often in economic and political discourse, usually accompanied by some other word: there are references to ‘free markets’, or to ‘oligopolistic markets’, or to ‘market failure’. But what is the nature of this thing that is ‘free’, or ‘oligopolistic’, or has ‘failed’, in the latter case usually claimed in the context of some call for a deus ex machina, in the form of a regulatory intervention, to ‘fix’ the problems.

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Read more about the article Routine and its Limitations

Routine and its Limitations

Routine and its limitations’ completes a short cycle of three blogs with a common, thematic root: dysfunctions in the division of labour within governmental systems. The focus in this case is on a temporal pattern that can be observed in the evolution of some regulatory agencies or systems. It adopts Daniel Kahneman’s metaphor of System 1 and System 2 thinking, but uses it to characterise institutional and organisational, rather than individual, thinking.

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Read more about the article Old spectacles for myopic governments: monasteries and speculae

Old spectacles for myopic governments: monasteries and speculae

The latest Insights blog is concerned with narrowness of vision in economic policy/regulation and the distraction that is a contributory cause of it. It is motivated by the question: how might better institutional design counteract distraction? Features of Monasteries, Plato’s Academy and Roman Watchtowers are cited as examples of ancient institutional innovations from which insights might be gleaned.

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Read more about the article The Insolence of Office

The Insolence of Office

The second in the new Insights into Regulation series of short blogs addresses the causes and effects of a highly dysfunctional ‘division of labour’ in government, with a focus on misdirection and distraction in the application of effort The title is taken from Hamlet’s soliloquy (“To be, or not to be …) and the notion of the insolence of officialdom was, at a later time, a repeated trope in the major works of Adam Smith.

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Read more about the article Climate policy – ‘Tain’t what you do, it’s the way that you do it.

Climate policy – ‘Tain’t what you do, it’s the way that you do it.

In a new series of short blogs under the thematic title ‘Insights into Regulation’, members of the Regulatory Policy Institute Research Group will highlight a particular insight, idea or perspective that is salient to some or other aspect of regulatory policy. Given the observed limitations of quantitative emissions reduction agreements, we explore the role of complementary science and technology approaches based on sharing of knowledge and know-how in mitigating relevant externalities.

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Read more about the article Covid-19: What have we learned about the importance of trustworthy statistics?

Covid-19: What have we learned about the importance of trustworthy statistics?

The Zeeman Lecture at the September 2021 Conference on 'Rethinking Regulation' was delivered by Ed Humpherson -Director General for Regulation, UK Statistics Authority. This is a transcript of that lecture. A couple of years ago, back when it was possible to travel freely without worrying about masks, infections and tests, I was on a train journey south from Edinburgh. As is the way with long train journeys in the UK, there was some horrendous disruption; and as is also the way, this disruption broke the invisible veil that holds British people back from talking to one another, and lots of conversations started – proceeding from the usual starting point of “bloody typical” to broader chats – where are you going, what do you do?

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Read more about the article Re-thinking climate change policies: A tale of two externalities

Re-thinking climate change policies: A tale of two externalities

In this short paper, Gerard Fox and George Yarrow argue that, in the context of climate change policies, the nature and significance of any potentially problematic economic externalities are functions of strategic policy choices: that is, they vary according to the particular policy strategy chosen. The traditionally identified externality – that the benefits of carbon abatement efforts by any one country are mostly enjoyed by other countries – comes from strategies that are conceptualised in terms of determining quantities (of carbon emissions or abatement), an approach to economic policy that was adopted in Soviet-style central planning. By leading to external effects that then call for difficult-to-achieve correction, in effect the quantitative planning system establishes self-created obstacles to attaining that which is desired. Science and technology policy approaches based on sharing of knowledge and know- how are shown to have very different implications for the nature and significance of any associated externalities. The development of the Oxford/AstraZeneca Covid vaccine is given as an example of the possible, alternative, strategic approaches.

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Read more about the article A Commentary on the Opening Chapters of ‘An Inquiry into the Nature and Causes of the Wealth of Nations’

A Commentary on the Opening Chapters of ‘An Inquiry into the Nature and Causes of the Wealth of Nations’

Adam Smith’s Wealth of Nations (“WoN”) is a foundational book in the social sciences and one of the classic works of human civilization, but like many classics it is rarely read. Its influence has been profound, but that influence has come largely via the work of Smith’s successors who, in their own writings, have frequently cherry picked the text in ways that have served their own, particular purposes in a range of different, later contexts. In consequence many of Smith’s own points have been lost or distorted...

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Read more about the article The challenge of removing a mistaken price cap

The challenge of removing a mistaken price cap

The UK Competition and Markets Authority in 2016 calculated a detriment of £1.4 billion–£2 billion in Great Britain’s retail energy market, attributed to weak customer response. The government in 2019 imposed a tariff cap until competition is effective. Stephen Littlechild argues that the cap was a mistake: there was no such detriment and there are valid reasons for customers not changing supplier. The market was not previously uncompetitive and inefficient as suggested. The cap has rendered the sector loss-making and led to supplier exit. The assessments of effective competition by the Office of Gas and Electricity Markets have been arbitrary and implausible. Some alternative ways ahead are noted, but latest government policy invokes behavioural economics to propose even greater intervention. A postscript discusses dramatic latest developments.

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