• Penny Clark-Hall

The law of unintended consequences

How public perceptions drive regulation that will drive costs of food up and increase pressures on urban housing.

"The law of unintended consequences, often cited but rarely defined, is that actions of people—and especially of government—always have effects that are unanticipated or unintended. Economists and other social scientists have heeded its power for centuries; for just as long, politicians and popular opinion have largely ignored it.” (Source Rob Norton, The Library of Economics and Liberty).

As much as democracy serves us it also leaves us vulnerable to the whim of public opinion. Popular opinion, often without merit, that forces the hand of government to regulate without adequate or even thorough investigation of the consequences beyond satisfying and securing voters.

We have seen this time and time again with the Resource Management Act, particularly around water and housing. Environmental regulation driving the costs of being compliant up for farmers, absorbing so much of their time that they have to hire someone to do their job while they spend their time engaging consultants to help them keep their farm operative. In some cases the regulation has devalued farm land and prevented sales from farmers who have had enough and would like to get out of the game. Preventing new energy and enthusiasm entering the industry and keeping increasingly tired and disheartened farmers in for lack of an alternative.  

We’re seeing the good intentions of the government in reducing and off-setting our emissions creating some real friction in rural communities. The One Billion Tree programme has got businesses investing in and buying up rural land to plant trees to offset their emissions and the potential consequences is that pastoral farmland will be taken over by forestry blocks, removing long-term and consistent employment from its community, driving the quality of its socio-economic status down. Further to this, if this does in fact become the unintended consequence, this would likely put further pressures on already struggling urban centres as more and more rural people sell up and move to the city. Who would blame them. 

Flow on effects (unintended consequences) of the above eventually lands on a reduced supply of food, export products and income. Increasing the need for imported food and potentially a rise in cost of feeding ourselves. Who knows? But the point is rushed and reactive regulation is hurting us. Of course there are positive unintended consequences but like the media coverage of the primary sector to date, the positives are not as interesting to talk about.

Another example, that is close to home for me is the Government’s intentions to decongest birthing units in hospitals by incentivising midwives to encourage women to give birth in their birthing units. Because midwives only get paid for all their hard work if a woman actually gives birth in their facility, there is unintended pressures (not always), stress and risk on mothers. The incentive, while reducing congestion in the hospitals shifts what should be the priority -  the wellbeing of the mother and child - to a conflict of interest and unfair repatriation of the great work midwives do, that pushes the boundaries on what’s safe and what would make the mother more comfortable.

What do we do? There’s nothing more annoying than someone who bemoans and laments on issues that doesn’t offer up any attempt at a solution. So what about a four year term government? To be more effective government definitely needs more time in the saddle to make informed  and meaningful solutions. A three year term only gives government one year in the middle, after a year of getting up to speed, to do anything meaningful before they’re back into a year of campaigning. Maybe an additional year would see more considered reform that doesn’t cut off one's nose to spite one’s face. Or do we empower communities and industry to build enduring solutions  that will outlast the whims and legacies of passing governments? 


© 2019 by Penny Clark-Hall of Social Licence Consulting. All rights reserved.

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