Week 15 Reflection -- Regulation and Influence

in #gradnium2 years ago

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I thought that Dr. Davies gave a good presentation on how it is difficult for governmental coercion to work as intended very often, and how cooperation is often a better solution. But there were a couple of points in his presentation that I had a hard time accepting.

Something that I think Dr. Davies neglected to fully address was the objection that central planners should just write better regulations. He countered this objection using the analogy of the regulations on driving in Mexico City, saying that if the central planners simply banned people from buying second cars in addition to preventing them from driving cars with certain license plates on certain days, then you would end up with more issues than there were previously, because people would drive to different cities to buy second cars. This is true, but what if the central planners wrote better regulation not be adding more regulation, but instead by writing a different kind of regulation altogether that could achieve their desired outcome? For example, what if the central planners of Mexico City only forced people who have access to public transportation to work to not drive to work? I feel like this regulation would result in have more people take public transportation to work, and even if some are willing to buy a second "clinker" car, most who have access to public transportation would simply take it.

I also felt like Dr. Davies' explanation that the wasted funds on the war on poverty was caused by regulatory capture was inadequate (or I did not understand it). It is true that the government has wasted trillions of dollars on poverty programs, but I don't see how that could have been caused by regulatory capture. In regulatory capture, a political entrepreneur approaches the government with an offer of payment to have a desired outcome on those their policies concern, so that the profit from putting regulations and fees on citizens can go towards the entrepreneur. I don't see how this can apply to poverty, because how could the government make money off of helping poor people get their own money, and then how could the entrepreneur make any profit off of that? (I'm not an economics major, be nice plz)

Upon further reflection, it's possible that the entrepreneur could start an organization with the displayed goal of giving to the poor. The organization could accept donations from rich individuals and corporations, but then the organization might take a large portion of these donations directly into its own funds to "sustain the organization," or get the entrepreneurs who started it rich off of goals to feed the poor. But notice how the government was barely involved in that example. It's easier for me to imagine entrepreneurs swindling rich donors in this way than capturing the regulators, but I would have to do research on how poverty programs are funded and where their funds go in order to know for fact.