A Better Path to Local-Government Regulatory Reform

For cities, protecting public health and safety doesn't have to come at the expense of jobs and economic development. A new online tool can help in building sensible regulatory frameworks.
by | November 26, 2013

Few services provided by governments -- local governments in particular -- are more important than regulations that protect the public's health and safety. But the modern reality is that creating jobs and opportunities for entrepreneurship are just as important.

Thanks to technology, those two goals no longer have to conflict. Working with American cities and with funding from the Smith Richardson Foundation, the Harvard Kennedy School's Ash Center for Democratic Governance and Innovation is building an online inventory of best practices called "Regulatory Reform for the 21st Century." The project aims to help local governments streamline their regulatory processes while at the same time supporting local and regional economic development.

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Too often, regulatory frameworks grow over time without challenges to their underlying rationale. And too often the result is a rule-bound, cumbersome and expensive process that is unrelated to accomplishing the regulation's original purpose. Even worse, it's not unusual for regulatory processes to be captured by existing businesses trying to fend off competition by creating unnecessary barriers to others wanting to enter their markets.

One thing local governments can do improve their regulations is to set up licensing or inspectional regimes that favor good actors -- those who don't break the rules. Just as the Transportation Safety Administration allows select frequent flyers to receive expedited screening, why not create a streamlined certification process for businesses with stellar records?

Another way to favor businesses that play by the rules is to help drive consumer decisions by making more information widely available to the public. For example, providing restaurant inspection grades and information on consumer-fraud reports to a website like Yelp can guide consumers toward the good guys, which can help to reduce the pool of bad actors.

Technology also allows government to pursue bad actors in a much more targeted fashion. The New York City fire department, for example, realized that it was futile to try to keep up to date on all its building inspections. Instead, the city identified four metrics on which inspectors should focus. According to Mike Flowers, director of New York City's Policy and Strategic Planning Analytics Team, inspectors saw a five-fold increase in the uncovering and remediation of risky conditions after they began to focus on buildings whose owners haven't paid their property taxes, those in foreclosure, buildings constructed before the 1938 implementation of modernized codes, or ones located in neighborhoods with specific socio-economic characteristics.

By harnessing the vast information they collect, governments can use regulation as a tool to incentivize good behavior and economic growth - while ensuring that more bad guys get caught.

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