By: Luca Dellanna
Date: April 21, 2020
In: Personal Blog
- Regulations tend to be optimized for everyday life.
- Not for emergency situations (such as the current pandemic).
- Need for circuit breakers.
- Alternative regulations that kick-in fast during an emergency.
- Fast, low-cost adaptation.
- Immediate interruption of normal procedures.
- Achieve maximum results when the costs for doing so are still low.
- Normal regulations may get you to the same place, but much slower (too slow).
- Similar to natural reflexes (when you touch something hot, hand “automatically” retracts).
- Based on leading indicators.
- Lagging indicators obviously result in circuit breakers being triggered much later.
- Clear and objective conditions.
- Execute the circuit breaker only when warranted.
- Easier to accept be costs of activating the circuit breaker in case of a false positive.
- Provide protection as needed, without the risk of any bureaucratic delay.
- Preserve accountability.
- Allow for fast, not reckless action.
- Relax regulations only when the cost of not doing so is high.
- Necessary and likely to have some false positives.
- High trigger sensitivity to avoid false negatives automatically leads to some false positives occurring (see “Testing – Sensitivity and Specificity“.
- Only works when the cost of a false negative is (much) higher than the cost of a false positive.
- Tail risks: when consequences are large enough to justify apparent “over-reactions” to false positives.
- If not the case, circuit breakers will be quickly opposed.
- Avoids permanent over-extension of the state.
- Circuit breaking measures are not permanently in place.
- Also avoids unnecessary side effects.
- More permanent relief bills likely stuffed with unwanted provisions.
- Effective government tool in situations of weak leadership and/or slow bureaucracy.
- Introduce circuit breaking regulations “when the scars” are fresh.
- Otherwise, will never happen.