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Why do regulation and public policy and legislative efforts too often fail to do their intended job?
For some time, I’ve argued that one reason is that the inputs are flawed and that there needs to be more inclusiveness in the decision making pool for legislation and regulatory initiatives.
In this article for Fortune I discussed the issue in a particular case related to control frameworks in the Sarbanes-Oxley implementation. http://money.cnn.com/2010/07/16/news/economy/COSO_SEC_flaws_Sarbox.fortune/
I have also written directly to the regulators at the FDIC and SEC about my concerns in this arena, encouraging them to draw in and expand the pool of resources they consult with — in order to combat regulatory capture and make better regulations.
Legislators need to do this also. When I attended a meeting at the Academy of Sciences a few years ago, a congresswomen told the green energy industry members in attendance there that if they hoped to succeed they would need to hire more lobbyists. Clearly, that is the antithesis of a free and open democracy.
In my letters to the regulators I have recommended making greater use of independent experts to supplement industry lobbying. I was pleased therefore to run across this recent working paper on regulatory capture by Professor Lawrence Baxter whcih advocates these ideas. http://scholarship.law.duke.edu/faculty_scholarship/2355/
The issue of how laws and rules are made is not a small issue and it should be of interest to everyone. Let’s hope when Baxter’s work is published, it will make a difference in encouraging more inclusiveness and as a result better legislation and regulation for all.
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Eleanor Bloxham www.eleanorbloxham.com
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