Saturday, January 21, 2012

LTA and regulatory capture? HSA are you listening?

A week ago in the Sunday Times Senior Correspondent  Christopher Tan write a nice article about the recent SMRT wayang and the LTA, raising the issue of a regulatory capture occurring between the transport regulator LTA and the transport industry.

The concept of regulatory capture is very much assocated with Economics Nobel Laureate George Stigler. It refers to the type of government failure when a public sector regulator has a cosy cosy relationship with the regulated service provider, to the extent that the regulator becomes a promoter of the regulated rather than a protector of the public needs.

Is the LTA a victim.... or are we, the public, victims of the regulatory capture between LTA and the transport industry.

This is actually not an isolated problem affecting the LTA, but can be seen to exist in many of Singapore's regulators.

The HSA (Health Sciences Authority) for example may be in such a predicament. Formed in the past from all the disparate MOH subunits in the Ministry of Health that the MOH wanted to decant from the Ministry, the functions of the various parts of the HSA range all the way from service provision, regulatory and promotional. Regulatory capture?...certainly many opportunities for this to develop in the HSA. Successive Board Chairmen and CEs have not made any attempt to deconflict all these functions, choosing instead to keep the easy and cosy relationships which made their work easier. However, unless this regulatory captures are dismantled, one has to question to what extent public needs are sacrificed to meed the needs of the industry.

By the way, George Stigler was also well known in medical circles for his attempt to optimize the daily recommended diet. Like all economic solutions, the result was totally unpalatable.


auntielucia said...

Hi Giga: Nian nian you yu! Have you ever considered that it's almost impossible not to have some "capture" or other in SG society given what a small group the "elite" is, esp the older generation right down to those in their 4os at least? While in the wider world, it's 6th degree of separation, in SG it's more likely to be 1.5! LOL!

gigamole said...

Hi AuntieL,
Lots of fish to you too! I trust you are keep well and in good health!

I don't think it is a matter of just there being a small number of experts to do the job. It is just that they refuse to acknowledge that conflicts of interests are inherent in the systems that have been constructed, largely because to dismantle the COIs is to costly an it is always easier to work when you don't have too many eyes looking at what you do. So just pretend the COIs don't exist.

auntielucia said...

Hi Giga: One presumes one is in good health when the medical reports say so, haha!

Btw, think u misunderstood what I was trying to say in my comment. It's not that we have small number of experts but because we are a v small country and there are more overlapping family, relationship, business, friendship, co-worker ties in a country of 3.5m residents than say in Australia or even Malaysia. Yet even in larger countries, it's normally the same-old same-old coterie taking centre stage in every act. So how to avoid some or any "capture".

Have a gr8 week-end n more yu tomorrow, ;)