5 Examples of Unintended Consequences of Regulation


People sometimes support measures that sound beneficial to society but can often end up affecting the same group of people that they were intended to help. One example is price controls that sound beneficial to certain sectors but in the end can cause unemployment or shortages. The author explains five examples in which the policies intended to solve a problem ended up creating a worse scenario, they are the following:

  1. There is a regulation that tries to protect endangered species by putting restrictions on how landowners can use their property if it is discovered that their actions can damage wildlife. This policy sounds good and definitely has positive intentions but it violates property rights and produces perverse results because people might not end up tell authorities if they discover an endangered animal in their property, they might even choose to kill the animal so they don´t get involved in that law.
  2. The law that makes you use seat belts can go against individual liberty of choice, wearing a seatbelt definitely helps you survive an accident but studies have shown that because people feel safer, they decide to drive more recklessly so the number of car accidents increases in places where that law is mandatory.
  3. In the US some states imposed higher requirements on cars sold to reduce contamination, but this turned out to simply raise the total cost of vehicles while doing little to reduce the total US emissions.
  4. There was a city planning which consisted on intersperse apartments with shops so that owners could keep an eye on their business and on their children at the same tine as some sort of “natural surveillance” but this turned out to cause more violence in those neighborhoods.
  5. Finally, there was a law in 1994 called “Three Strikes and You´re Out” where if someone was convicted of a third felony that person would get a sentence of 25 years to life. The problem is that many acts are not considered that threatening and empirical studies of Los Angeles data suggest that more police officers have been killed because of this effect.

In conclusion, the author talks about a problem that people have to consider when supporting a policy, they need to fully understand their effects and policy makers need to think through the full consequences of a policy, they have to consider its externalities and not just focus on its direct consecuences.

Bibliography: Murphy, Robert P. “5 Unintended Consequences of Regulation and Government Meddling | Robert P. Murphy.” FEE, Foundation for Economic Education, 15 July 2015, fee.org/articles/5-unintended-consequences-of-regulation-and-government-meddling/.