“The rules don’t apply to me,” is a favorite maxim of toddlers, narcissists, and government officials. This is especially true of the legislative branch, which frequently exempts itself—and its 30,000 employees—from federal laws that apply to the rest of us.
But just as often government at all levels simply ignores laws it finds too burdensome to comply with. A recent study published last month in the American Journal of Political Science titled “When Governments Regulate Governments” found that “compared with private firms, governments violate [the U.S. Clean Air Act and Safe Drinking Water Act] significantly more frequently and are less likely to be penalized for violations.”
Researchers David Konisky and Manny Teodoro viewed records of more than 3,000 power plants, 1,000 hospitals and 4,200 water utilities. Some of their findings include:
- Public power plants and hospitals were on average 9 percent more likely to be out of compliance with Clean Air Act regulations and 20 percent more likely to have committed high-priority violations;
- Public water utilities had on average 14 percent more Safe Drinking Water Act health violations and were 29 percent more likely to commit monitoring violations;
- Public power plants and hospitals that violated the Clean Air Act were 1 percent less likely than private-sector violators to receive a punitive sanction and 20 percent less likely to be fined;
- Public water utilities that violated Safe Drinking Water Act standards were 3 percent less likely than investor-owned utilities to receive formal enforcement actions.
Why do government entities pollute our water and air more often than private entities? Because, as they researchers point out, government has both the incentive to ignore regulations and the ability to get away with it:
We argue that government agencies have greater incentives than profit-maximizing firms to shirk regulation and/or seek regulatory relief through political channels. The result is a political theory of regulation, in which the ultimate effect of regulatory policy turns not on the regulator’s carrots and sticks, but rather on the regulated agency’s political costs of compliance with or appeal against the regulator, and the regulator’s political costs of penalizing another government. One implication of this theory is that public agencies are less likely than similarly situated private firms to comply with regulations. Another implication is that regulators are likely to enforce regulations less vigorously against public agencies than against private firms because such enforcement is both less effective and more costly to the regulator.
Despite clearly documenting these failures of government, the solution the researchers propose is more government—more power to help the government force their regulations and more money to help them pay for it.
But this has already been tried and found to be ineffective. A better approach would be to simply level the playing field between public and private entities. If government-run companies in a particular industry do not comply with regulations or pay fines then private should also be given this same tacit exemption. For example, if a state-run government hospital refuses to pay their fines then no other private hospital in the state should be required to pay similar fines. If we take the rule of law seriously then we should apply it equally to all.
That would also level the playing field and make privatization both more attractive and more functional. The result would even be a cleaner environment. After all, if we have regulations to protect us from polluters, then we should allow those entities less likely to pollute (i.e., private firms) to provide more of our goods and services.
