Extracted Article:
In colonial India, free-roaming cobras posed a danger to the public. British government officials hit on the solution: Offer a monetary reward to any local who brings in a dead cobra.
It appeared to work: Many dead snakes were presented, and the reward money was duly given out.
But soon, the government found out that people were breeding cobras to get the reward - and it dutifully ended the programme. Left with worthless cobras, the locals released them into the wild.
The policy had cost a small fortune; and instead of reducing the cobra population, the bounty probably increased it.
Every policy or programme planned can have intended and unintended consequences.
Another example: In America, some states have what is called "three-strikes laws" - where individuals can be given a very severe prison sentence when convicted for a third time, even if the third offence is relatively minor.
Studies showed that instead of being a deterrent, enforcing three-strikes laws led to an increase in violent crime, especially against law enforcement officers.
This was because of an unintended consequence - those who already had prior convictions would fight violently not to be arrested, especially for a third time.
The true stories of cobras and criminals illustrate the fact that policies can lead to outcomes directly opposite to what was intended.
Or they may, at the very least, result in some unexpected drawback even when the intended goal was partially achieved.
ST ILLUSTRATION: MIEL
Take, for example, a social security policy that enforces savings for retirement. Its mandatory nature means the goal is achieved to some extent. But that enforced savings may lead to an inflated sense of security in many who then save and invest less for the long term.
The problem is compounded when the policy has multiple objectives.
In Singapore, people can use Central Provident Fund (CPF) money to fund a property purchase. When they retire, they may not have enough CPF savings to live on in their old age, unless they can convert their property from asset to cash.
One can say that one unintended consequence of liberalising the use of CPF for property purchases is poorer retirement adequacy for CPF members.
Having unintended outcomes does not mean that the policy is flawed or should not be implemented.
The larger point here is that translations from policy intent to content to outcome are often not straightforward.
The outcome may be different from, or opposite to, what was intended. Nor are unintended negative consequences the result of poor planning: They can happen even when policymakers are competent and cautious.
So what are policymakers to do, to try to reduce unintended consequences, and respond to them when they do crop up?
First, dispel the myth that unintended consequences from policies cannot be anticipated.
When unintended consequences arise, it is easy to blame changing and complex circumstances beyond one's control.
Policymakers do indeed operate in an uncertain and complex environment. But unintended consequences can also result from internal factors.
Ensure conditions of experimentation can be realistically replicated
It is possible to anticipate and try to prevent negative outcomes from happening, and help bring about positive ones, even though policymakers do not have full control over them.
It is in this spirit of responsibility and rational optimism that we can examine the potential unintended consequences from the policies and plans in Budget 2017, including their design and execution.
Take, for example, the plan to create more space for innovation through regulatory sandboxes in various areas, where boundaries are set within which some rules can be suspended.
This forward-looking idea is now being applied to financial technology and testing of self-driving vehicles on roads in specific zones.
With more regulatory sandboxes to be implemented in different areas, policymakers should ensure that the conditions of the experimentation can be realistically replicated in the target situations to which the experimental results are intended to apply.
These include the resources and support provided to facilitate effective functioning in the sandbox. Otherwise, the ostensibly successful findings from a regulatory sandbox that, in fact, is not representative of the real-world situation, will misinform policy decisions on what regulations to retain, revise or remove.
INADEQUATE COORDINATION AND CONFIRMATORY BIAS
In the public policy context, unintended consequences often arise due to some common factors.
One is inadequate coordination across agencies. The public service is organised into distinct agencies, but people's problems and lived experiences are not similarly compartmentalised. So policies need to be developed holistically, rather than in an issue-specific manner, and supported by all agencies so that they cohere.
It is impor
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