The Law of Unintended Consequences

January 24, 2008 1:35 PM

Economist Alex Tabarrok writes, for the Marginal Revolution blog, to describe just what the law of unintended consequences entails:

"The law of unintended consequences is what happens when a simple system tries to regulate a complex system.   The political system is simple, it operates with limited information (rational ignorance), short time horizons, low feedback, and poor and misaligned incentives.  Society in contrast is a complex, evolving, high-feedback, incentive-driven system.  When a simple system tries to regulate a complex system you often get unintended consequences."

There are plenty of examples in his post - and throughout the British public services.  Understanding the law of unintended consequences is central to understanding why so many policies fail.  Our politicians need to understand it and, as Tabarrok suggests, be humble.

Economist Alex Tabarrok writes, for the Marginal Revolution blog, to describe just what the law of unintended consequences entails:

"The law of unintended consequences is what happens when a simple system tries to regulate a complex system.   The political system is simple, it operates with limited information (rational ignorance), short time horizons, low feedback, and poor and misaligned incentives.  Society in contrast is a complex, evolving, high-feedback, incentive-driven system.  When a simple system tries to regulate a complex system you often get unintended consequences."

There are plenty of examples in his post - and throughout the British public services.  Understanding the law of unintended consequences is central to understanding why so many policies fail.  Our politicians need to understand it and, as Tabarrok suggests, be humble.

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