:Stephen Goldsmith, the former mayor Indianapolis and former deputy mayor of New York city known for his expertise on public sector innovation, argues that state and local governments ought to move away from license and permit requirements and towards a more open-ended system that combines registration and basic rules of the road:
A city or state can license all its plumbers, electricians or beauticians, or it can simply require that those in the trade follow certain rules and procedures and inspect for compliance. Similarly, the permitting process for working at a new site produces additional expense. Cities spend significant time and resources permitting each home remodeling project, driving up costs for those who take the time to comply while providing an advantage to those who operate totally outside of the system.
Rather than licensing or permits, officials might simply require registration—a simple online form that certifies one is undertaking business at a certain address. [For example, some public entities now use online compliance portals, another important advancement cities can utilize in regulatory reform. Governments in places like El Paso, Chicago, New Jersey and Colorado allow businesses to report required information directly to the regulating bodies that monitor their activities]. In these jurisdictions business owners can increasingly avoid lines and submit paper forms to a series of offices that must then coordinate a swarm of new paperwork. Furthermore, storing this data in a centralized, accessible format means it can be broken down via data analytics to illuminate trends and characteristics of economic or residential development and guide policies. Such systems can reduce wait times, improve the speed of communications and reduce administrative costs, all by assuming that most companies generally comply with published standards. Why drive up homeowners’ costs by requiring a maze of permits for kitchen remodeling when registering that the contractor is undertaking such work should be sufficient? Such a notification would not require approval; inspectors could simply use civil or criminal forums to penalize bad conduct.
Rather than treat every regulated firm identically, regulators could use data mining to identify firms that are likely to prove troublesome:
Why not focus attention on those actors most likely to put the public at risk? Data mining can easily look at other applicant characteristics by combing data in other agencies for information that might trigger a deeper review: failure to pay taxes, employee complaints about working conditions, consumer complaints, operating under aliases, delinquent reporting of important issues and the like. This approach should drive inspectors’ priorities, time and attention. In New York I literally received weekly complaints from conscientious small restaurants about the business they lost and the cost of fines for nonmaterial violations. Yet, in order to guarantee consistency and avoid inspector abuse, most regulatory organizations value by-the-book enforcement, which too often discourages common sense. And almost any good inspector going by the book can find an infraction in any business or building. We no longer need to accept the tradeoff between accountability and discretion; we can have both. Digital tools now allow us to know where every inspector is all the time, how long he or she takes to inspect, what types of infractions are written, which ones are outliers, and who has produced the best-rated restaurants, the most violations, and so on. Big data not only provides much more insight into the regulated, but also into the regulator.
Restaurants that receive no complaints and have never been associated with adverse health outcomes should be free to run their businesses as they see fit, while restaurants that regularly receive complaints ought to subject to closer scrutiny. This approach has the potential to greatly cut down the burden on responsible business owners while reducing costs for regulatory agencies.