Monday, December 8, 2014

When the rules may be wrong


Much in the headlines involves rules and rulemaking and rule enforcement (or rule breaking). The conflicts and problems arise in the face of the arduous task of implementation, but at the origin is the age old debate between following the intent of the rules and the strict interpretation of the words (literalism). By my observation, rule makers seem to be responding by issuing even more rules (and you may substitute regulations if you wish). Missing is the rhythm of consolidation and rationalization.

Companies, institutions, and sometime even governments have always regularly revisited the naturally expanding landscape of rules and policies and procedures to try to make some sense for implementation. Under the name of rationalization or consolidation or streamlining; experts review and reduce and consolidate the volume of tasks, remove anomalies and simplify processes. This has always followed a rhythm – expansion then consolidation then expansion and a synthesis, often but regularly.

Recent history, for convenience just take this century, shows the rules keep expanding without rationalization.  The benefits of more digital storage seem to assist this proliferation, but implementation and oversight do not benefit. Critical voices appear to spot the single momentary issues but lose the big picture.  I suggest that everyone ask how recently and often the rules in question have been revisited.  If the answer is not often, I believe there is an automatic obsolescence making the desired outcome problematic.

(End note:  There is a rising literature on the issue of complexity that deals with this issue, often targeted to law or finance, but I am addressing a much simpler issue…the rhythm of revision. I also submitted a comment in the NY Times http://dealbook.nytimes.com/2014/12/05/basel-banking-chief-expects-fine-tuning-of-risk-rules/?comments#permid=13521432

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