Nicholas Gruen from Lateral Economics has released a report (pdf) he did for the Victorian Government in 2006 on Regulation and Innovation.

He argues that regulation reform has become too scientific and process-focussed rather than looking at outcomes which encourage improvement and innovation as well as compliance. A new approach to regulation should be more fully focused on continually optimising our regulatory systems in the way businesses continually improve their own production systems.

He gives the example of an organisation which did not update its regulatory requirements because to do so would require a new Regulatory Impact Statement.

He argues that measurement of compliance should be a basis for improvement and higher morale rather than a basis of punishment and that the social objectives of regulation should be achieved in ways that maximise the operating flexibility of those who are regulated.

If you’re interested you can listen to an interview Nicholas did on Radio National (it starts around the 37 minute mark).