BY: Stephen Masty

Inspired by Mother Nature we might be able to construct a self-propelled mechanical shark, a self-financing agency incentivized to devour government’s waste, counter-productive regulations and needless paperwork. How might it work?

Mexican regulatory reforms may point the way. Drowning in needless red-tape, Mexico’s government in 1988 took the bold step of appointing a deregulation czar. Other countries tried it before and failed, but this was different. The deregulator had support and access right up to the president, so his decisions could only be over-ruled at the highest levels. There were time limits for bureaucratic responses and tough penalties for non-cooperation. The World Bank reports that he listened to the needs of everyone including the powerless and under-privileged. But those weren’t main reasons for his thumping success.

He held the burden of proof. When he challenged a regulation, its bureaucrats had 30 days to respond and defend it, in which case there was an evaluation and adjudication process, or else it was gone—presto! So unless an objection was filed the regulation ceased to be: no hearings, no press conferences, no paperwork, no muss, no fuss. Just a tiny new piece of freedom unhampered by government.

His team launched dozens or even hundreds of deregulation challenges a month, intentionally more than the overworked civil servants could hope to defend. So each department’s bureaucrats had to choose which very few regulations they really prized, defend them as best they could, and bid farewell to the rest. Mountains of harmful regulations turned rapidly into dust. Reversing the usual burden of proof meant that any and all civil servants could no longer drag their heels, lobby politicians behind the scenes, leak complaints to the media, propose half-measures that kept their handiwork alive, etc. In some cases they took one look at the towering pile of regulatory challenges and raised the white flag.

That is the first of two key components in our mechanical shark. She must retain the burden of proof, henceforth remaining as relatively safe from bureaucratic escape tactics as a real shark munching on an already half-eaten grouper.

Next, a real shark has incentives; in return for tidying up the ocean she gets fed. A mechanical shark needs similar incentives, not just to eat but to keep on eating—and not eat the taxpayers by incurring more costs. So when our mechanical shark identifies wasteful projects, regulations or paperwork, and she challenges their department and wins, she deserves some of the taxpayers’ money that she saved. This may be a one-off bonus or surely temporary, but the mechanical shark could cover her operating costs and still hire more waste-hunters, the equivalent of natural sharks breeding a whole school of hungry baby sharks. She could also raise salaries, attracting the smartest and most ambitious young women and men, but also seasoned former bureaucrats—defectors who know where the real treats are hidden. The natural equivalent is a more manoeuvrable hunting fish that drives others out of their protective coral reefs and into the open seas that the hungry sharks patrol.

The numbers must be crunched: initial staffing costs and a temporary budget until the savings roll in, estimates of how long it will take to identify the unnecessary and/or duplicative programmes as prey, how much that may save the taxpayer and what size of bonuses will be prudent but effective in sustaining reform and breeding new sharks.

It could be tested modestly, on even a very small-scale. Rather than begin by building a slavering Great White, we could start with a smaller and cuter nurse shark and see how she hunts.

But perhaps by imitating Mother Nature’s use of incentives we might solve a governmental problem that, so far, humans just cannot overcome.

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