“Performance Principles for Regulators”

New from Don Moynihan:

In recent decades governments have tried to instill a culture of excellence in public services by turning to performance management techniques. This turn to performance-based approaches extends to regulation. Regulators have been encouraged to use performance metrics to move from inflexible command-and-control approaches toward less adversarial relationships with regulated entities based on shared goals.1 But there is little empirical evidence on the success of performance-based regulation. What lessons can we learn for regulatory excellence from the broader governmental experience with performance management?

I won’t offer a full critique of the concept of performance metrics for regulators (e.g, see the debate about incentives for regulators), but beyond defining performance metrics, two problems remain:

  • Multidimensionality
  • Weights

Is there such a thing as a social welfare function?

Debates about performance metrics often say more about the body selecting the metrics than society’s goals.