Need for Humility in Policymaking

Stefanie Haeffele, Anne Hobson

Regulations impact a wide array of market and social activities that influence our daily lives. Regulations are attempts to correct perceived market failures, caused by information asymmetries, externalities, and principal-agent problems, and to provide public goods, which would otherwise be underprovided. Government actors are responsible for identifying these issues, weighing the costs and benefits of intervention, and designing and implementating regulations to improve society. Good regulations help mitigate issues in the economy without inciting new problems and without the costs exceeding the benefits of intervention. This requires intensive analysis and an awareness of the complexities of social life. Our society is complex and dynamic where people face knowledge and incentive problems, whether in the market, politics, or civil society. By examining this complex reality, we can...