finweek

When well-intentioned laws have bad consequences

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We all hope to live long and healthy lives. And we want that for other people too. So when there is a medical breakthrough that allows us to alleviate the suffering of others, almost all of us would agree that such a drug should be rolled out to those needing it most.

Opioid abuse kills 42 000 Americans annually. Opioids are a class of drugs usually prescribed to treat pain, but many patients develop addictions that lead to the illegal use of prescription drugs or even cheaper alternatives, like heroin.

Opioid abuse has increased steadily over the last decade to now constitute more than two-thirds of all drug overdose deaths. How to stop and reverse this rising trend has been the subject of debate among public health officials and policymakers for some time.

One option, preferred by most US health experts, is Naloxone. This is a drug that can reverse the effects of an opioid overdose if administered quickly.

In short: it can save many lives if it is easily accessible. With this knowledge, many US states began to pass laws that facilitated the widespread distribution and use of Naloxone. Surely this policy would save thousands of American lives?

Unfortunately and surprisingly, it had the opposite effect. This is the astounding conclusion of a new study by Jennifer Doleac of the University of Virginia and Anita Mukherjee of the University of Wisconsin-Madison.

The two economists found that broadening Naloxone access had “no reduction in opioid-related mortality”. Why?

Because the availability of Naloxone, the authors argue, encouraged riskier behaviour; access to Naloxone increased the use and abuse of opioids. 

Doleac and Mukherjee showed, for example, that where Naloxone became available, it was followed by a clear increase in opioid-related emergency room visits and more opioid-related theft.

In some places, like the Midwest, there was even an increase in opioid-related deaths, as abuse increased because people were comforted by the
knowledge that there was a way out. A policy with fundamentally good intentions had perverse outcomes.

This is a classic example of the dilemma that policymakers face daily. Good intentions do not equate to good policy. Differently put, the road to hell is paved with good intentions. What is needed is an understanding that humans react to incentives, and that if the incentives change, so will their behaviour.

Sport is a great example of how policies can have undesired consequences. Increase the points awarded for a try to encourage more running rugby? Maybe it works, but it is more likely that it will encourage foul play near the try line because a penalty is now a relatively less expensive mistake.

Design cricket helmets to make batsmen safe from bouncers? Possibly, but it is equally likely that fewer batsmen now learn to play the bouncer well, and are thus hit on the head more often (although obviously with less severe consequences). 

Give three log points for a win in a soccer championship instead of two to encourage more attacking play? Expect more defensive home games and draws as teams want to avoid “losing three points at home”.

These examples may be somewhat facetious, but they show just how difficult it is to regulate human behaviour.

One policy that is likely to have serious ramifications for South Africans is the proposed Liquor Amendment Bill, which will increase the minimum drinking age from 18 to 21 years.

The goal, ostensibly, is to reduce the number of alcohol-related deaths of teenagers, both from overconsumption and from the associated violence and car accidents.

There is no doubt of the good intentions here. Alcohol abuse can have deadly consequences. Limiting the drinking age to 21 seems like a rational way to reduce consumption among a group of young people that is most at risk. What could go wrong?

The answer is: we don’t really know. Would young adults be happy teetotallers for three years, or would they find alternative means of enjoying the products of Bacchus?

Are the alternatives – hiding consumption from adult supervision, or consuming unregulated drinks bought on the black market – not potentially worse?

Perhaps we can find examples elsewhere. Empirical evidence in the US seems to suggest that increasing the minimum drinking age reduced car accidents by around 5%.

That would be great, of course, although those results rely on strict enforcement capabilities and supporting institutions.

Would violence, particularly against women, cease? Perhaps it would, but the new Bill might also shift drinking away from bars and public places and into the home, with even worse outcomes.

Any policy, regardless of its intentions, has consequences. Some are obvious, but often our good intentions have undesired or even perverse outcomes that nullify or even contradict the initial aims.

We can avoid the worst of these by carefully considering the alternatives, through modelling behaviour and empirical testing (of similar policy experiments). 

But often the bad news is that, despite our best intentions, humans are best left to their own devices. 

Johan Fourie is associate professor in economics at Stellenbosch University.

This article originally appeared in the 29 March edition of finweek. Buy and download the magazine here, or sign up for our weekly newsletter here.
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