Stupid rules: How red tape is making society less effective

“Rules, I have come to believe, can be stupid. Rules are stupid when they prevent us from delivering what we are supposed to get done,” writes Professor Natasha Hamilton-Hart in her new book Stupid Rules: Reducing Red Tape and Making Organisations More Effective and Accountable.

It may be an odd time to be arguing for fewer rules and more authority, admits the Business School academic, but, she says, as strange as it may seem, authority is what we need more of.

“Nobody wants to be governed by a deranged dictator or to work for a tyrannical boss, and rules beckon as a safeguard, a way of holding the powerful to account. The problem is that rules themselves don’t hold anyone to account.

“Authority is what allows us to get rid of stupid rules and have more autonomy.”

Stupid rules, says Hamilton-Hart, are prevalent in all areas of society; red tape restricts councils trying to do good by the environment, hotel managers specify the exact number of seconds housekeepers can hold eye contact with a guest, and senior leaders find themselves unable to progress projects due to cumbersome processes.

All too often, she says, modern organisations are structured along lines of responsibility and reporting, where those higher up actually lack the authority to get the important things done.

“If leaders can’t make decisions about who is part of their work team, for example, or about how they will do their work – if they lack the authority to assess work performance according to their own estimation of what is or is not adequate – then they lack crucial authority.”

The purpose of the book is to show that authority is necessary if good rules are to work, she says.

“Getting rid of rigid, restrictive, stupid rules requires us to accept a greater role for authority. This actually creates space for more freedom, as well as more efficient and accountable ways of getting things done.”

Authority is also necessary, Hamilton-Hart writes, if we want people to have accountability for their decisions.

“A person hemmed in by rules acquires immunity from real accountability. This explains why, despite often grumbling about excessive rules, people sometimes resist initiatives that give them greater decision-making authority.”

For more than 20 years, Hamilton-Hart mostly studied systems of government and business in Southeast Asia: from bureaucracies to patrimonial systems.

After returning to New Zealand, she began looking into “supposedly developed countries” and how their rules and laws operated. She says despite scoring highly on measures of the rule of law and democracy, countries such as New Zealand seemed to be visibly struggling.

“After some years of living in God’s own country, it dawned on me that we had evolved rulebooks to provide legal cover for practices that were widely recognised as corrupt in the countries of Southeast Asia. But we didn’t call it corruption, because it was all perfectly legal.”

In the following 95bFM interview (edited for clarity), Professor Hamilton-Hart discusses her new book in more detail.

Q: Tell us about the book’s premise?

A: It’s about rules that cripple people and progress. The book argues that some really bad things happen if we actually try to make managers and people in organisations just follow the rules. Things get really inefficient, and paradoxically, we have less accountability and less democratic control.

Q: So you're arguing that some rules within the workplace are creating not only more work, but they're kind of crippling the system itself?

A: That is my argument. We've got these rules generally because of good intentions; we want to regulate businesses to prevent them, for example, from polluting the water, etc. So we think, hey, let's have some rules. But what happens is, if you overextend the rules and prevent managers and others from using their own judgment, the rules become increasingly complex and burdensome.

A trivial example I use in the book is the dress code for a large corporation - General Motors. It apparently got to be 10 pages long, telling people what they could and could not wear at work. And then the new CEO came in and said, “This is ridiculous, let’s replace this 10-page document with two words, and that is, ‘dress appropriately’”.

This means employees have to decide for themselves what is appropriate to wear. But then, because not everybody is going to get it right, the manager is going to have to say, on occasion, “No, that's not appropriate to wear at work.”

And apparently, when the CEO brought this in, some of the General Motors managers were like, “Hey, I'm not sure I can do this.” Pretty bizarre when you think about it. And the quote from the CEO was something like, “Well, if your managers cannot handle ‘dress appropriately,’ what can they handle?”

Q: If the management itself isn't adequate, it seems like we create all these rules to kind of make up for the lack of proper management?

A: Generally, we get a tightening and a proliferation of rules when something has gone wrong, somebody's made the wrong decision, done something bad, that kind of thing. Typically, wanting to deal with that is a good thing.

But what often happens is, rather than dealing with the specific instance of what has gone wrong; somebody didn't dress appropriately, the manager harassed a subordinate at work, for example, they go, “Okay, we need to have a whole lot of processes and policies and rules to prevent this from ever happening again.”

The problem is, not only does that burden everyone with a whole lot of paperwork and compliance, it actually doesn't prevent similar things from going wrong. Because if the problem is that the managers are no good, you're still stuck with them.

This also bleeds into the public sector; there's also a whole bunch of rules that come along with interacting with councils and government.

A: Yeah, and a lot of these are frustrating, and some of our political parties have taken this up and said, ‘Okay, let's just deregulate everything. The burden of red tape is hideous. It prevents us building houses for young people who need housing. It makes businesses spend a lot of time and money completing paperwork. So let's just have a bonfire of regulation to get rid of everything.’

The problem is that’s not possible. I mean, we'd all love to get rid of 900 pages of the Resource Management Act and replace it with something a whole lot less intrusive and burdensome. But you need some kind of planning capacity. You need some kind of authoritative capacity that says, ‘Yeah, you can build here, and no, you can't build there,’ because if you left it to people completely by themselves, I mean, what you get is a mess.

An example in the book is, if you're planning housing, you need not just houses, but sewerage systems etc., as Auckland and Wellington know too well. And in the early days, without actual authority, public authority, the sewerage systems literally did not link up.

So if you're going to have housing, you need sewerage, you need electricity, you need all of this infrastructure, and that can really only efficiently be delivered if you actually empower some kind of authority to say, “You know what, we're going to build a town here. It's going to need this much sewerage capacity. It's going to need water coming in. It's going to need electricity,” all of these things. Because if you just leave it to individual developers, it won't get done.

Q: I guess you're saying we could strike a happy medium between absolutely no rules and too many stupid rules by empowering the authorities that mandate them?

A: Yeah, and you don't always want to give them free rein, because you want to keep some levers for democratic accountability and control. But paradoxically, if you cripple your authorities so much, they can't actually deliver what you want them to deliver.

And there's a quote I have in the book from an official down in Christchurch, down in the red zone, where they're trying to restore part of this land that can no longer be built on into a nature reserve. And they're running into problems because of the Resource Management Act, like everybody wants this nature reserve, but the official says, ‘This is a case where the rules intended to protect the environment are preventing us from actually doing it.’

Q: How did you come to publish a book like this, and what kind of research have you done in your academic history?

A: Well, it's kind of bizarre because my academic history has mostly been based on working on countries in Southeast Asia and East Asia, which largely don't suffer from these stupid rules. And I only really kind of realised what was going on when I came back to New Zealand after a long time away, and I'd been studying these quite efficient, in some cases, state systems like Singapore, where stuff gets done.

I came to New Zealand, and I thought, well, we're not corrupt, and we're very democratic, and we're supposed to be very efficient. But why is it that we don't have proper sewerage systems - like, when it rains in Auckland, sewage goes into the water. Why is it taking so long to get some simple things done?

And so it was really the shock of reintegrating into New Zealand life that made me think, hang on, what's going on here?