Regulation 2.0 – hopefully NOT Regulation 1.0 (squared)

Regulation 2.0 will be shaped as a direct response to the shortcomings of existing regulatory regimes, the potential of emerging technologies and the desire to incorporate state and non-state actors into regulatory regimes.
Regulation 1.0 is based on prohibitions defining the wrong things in society rather than encouraging people to do the right thing. Part of Regulation 2.0’s foundation will be based on providing positive incentives for the right behavior rather and Regulation 1.0’s approach to prohibiting behavior. This can be seen in recent legislation establishing ‘cap and trade’ systems for carbon emissions, tax policy on so called sin goods such as alcohol and tobacco and entitlement programs are all example of a behavioral approach to policy issues.
Policy makers see creating incentives that “allow market forces to work.” Raise the cost of sin goods and you will lower their consumption, raise the price of pollution and people will pollute less. However, these same policies create alternative markets for these goods fueling an alternative economy that in turn demand increased resources for law enforcement – creating an escalating cycle of legislation and enforcement.
If Government 2.0 is all about engaging citizens and their self-service, then regulation 2.0 should be able engaging citizens and their self-enforcement – right?
Emerging technologies will give regulators unprecedented opportunities to gather information and apply it to behavioral policy. I first came across this idea in Frederick Pohl’s book, The Cool War (1983) where every senior citizen is given a video camera to capture ‘illegal’ activities. Those video cameras are now in just about every cell phone and there are now more than 300,000 Closed Circuit Television (CCT) cameras in the UK capturing the average person walking through London more than 300 times a day.
Regulatory regimes are based on the notion of jurisdictions. Non-state actors pose an accountability challenge, particularly those working across national and international jurisdictions. It should come as no surprise that these groups resist direct legislation as much as anyone. This creates an environment that goes beyond concerns of “who is watching the watchers” to ‘how to you hold someone accountable who is not an accountable part of our system.”
Non-state across pose a particular challenge given the fragmentation of media and the proliferation of communications channels that give these groups asymmetric powers – where a few people have a disproportional influence in public debate and actions. In the face of such a torrent of opinion, policy makes can easily turn inward to rely on established political and social elites further isolating the rule makers from those expected to follow the rules.
Combine behavioral policy with information, communications and cameras and you can see regulation 2.0 becoming a new version of a society of informants. People will be doing their patriotic duty by informing the authorities about what their neighbors will do and providing rich media voice, video, GPS and time stamped proof of your crimes against the society.
Regulation 2.0 should create a framework for thoughtful policy rather than a simple reaction to what has not worked in the past. Such regulation would involve:
• Creating a regulatory environment that protects society as well as promotes innovation and investment.
• Taking a hard look at the root causes of past failures, the future motivation of those in power and finally one that recognizes that people who take prepared risks are sources of future growth and innovation, not the enemy.
• Initiating a new basis for policy dialogue using communication technologies to create debate rather than to mobilize sides, create division or mock each other via derision.
• Using information to assess the effectiveness of policies and regulations and use that information to trigger objective review and reforms of policies and regulation.
Regulation 2.0 seeks to be proactive through grafting traditional policy approaches onto current social and technical realities. Some groups would argue that we are already living in such a society. However, this outlook or even less coercive versions of it are not a foregone conclusion provided that Regulation 2.0 leverages these factors toward a different end – personal and corporate responsibility.
Recent columns by Mark McDonald

• Regulation 2.0 — hopefully NOT Regulation 1.0 (squared) – Part One
• Defects: Muda in IT matters
• Creating IT business value based on hearsay
• CIOs see the future clearly strategically and operationally