Associate Professor Haines analysed the regulations introduced after the 1998 Longford gas plant explosion in Victoria, the collapse of insurer HIH and the 2001 attack on the Twin Towers in New York in her research for the recently published book, The Paradox of Regulation: What Regulation Can Achieve and What it Cannot.
Her findings showed that many responses to disaster either did not directly address the fundamental issues that gave rise to them, or promised too much in terms of protection from future harm.
Whether in response to disasters such as floods or bushfires, terrorist attacks or financial crises, Associate Professor Haines said regulation designed to avert disasters is caught in a bind, often rendering it ineffectual.
“On one hand, politicians, much of the media and the wider community are anxious about increasing levels of regulation, fearful that a ‘nanny state’ is blunting growth and innovation.
“But on the other hand, we demand more and more regulation to protect us from perceived risk, particularly in the wake of major crises. Tease apart this paradox and you find that regulation is designed to solve political problems that limit its ability to anticipate and address future risks.
“Regulation is increasingly political, the outcome of a contest between political parties to show that regulation can make communities, environments and finances ‘safe’ from future harm,” she said.
“Lurking in the background, too, is government fear that regulation will scare away investment. But as a consequence of being pulled in two different directions – to keep the economy going and make people feel safe – regulations that have been subject to intense lobbying and parliamentary processes often fail to live up to expectations.”
Associate Professor Haines argues that genuine expertise capable of helping reduce the risk of future disaster is most vulnerable to this political process.
“Regulators are also constrained, unable to employ the necessary expertise to good effect. As a result of the politics that surrounds regulation, addressing the cause of disasters to make sure they do not happen again gets lost,” she said.
“Effective regulation to combat risk involves three distinct elements: it must do its job without damage to the economy, must reassure people about their identity and a safer future, and must not irreparably damage political legitimacy. Regulation-making can minimize risks of future harm, but only when the full richness of the political, social and actuarial task is appreciated,” she said.
For interview: Associate Professor Fiona Haines 0419 530 625
Contact: Katherine Smith – University of Melbourne Media Unit
M: 0402 460 147
T: 8344 3845