The Timing of Regulatory Interventions

Turning first to intervention, the case studies suggest a major difference between the public and private sectors. The private sector appears to intervene relatively early in the life cycle of an issue, often in anticipation of problems rather than in direct response to them. Private standards often flow directly from engineering decisions. They are usually written in anticipation rather than in response to accidents. NFPA 408 and 61B were in place long before the first serious in-flight fire or the

well-publicized series of grain elevator explosions in 1977–78. UL and AGA initiate the development of standards as products are submitted for certification, which is almost always before they are marketed. The implications of this difference depend critically on how (and whether) these standards are adjusted over time.

In contrast, government interventions appear to occur relatively late in the life cycle of an issue and are usually reactive. Grain elevator safety was considered a problem by fire prevention engineers and insurance companies in the 1920s. OSHA did not get actively involved in the issue until after the disastrous Christmas of 1977. NFPA formally considered questions about aviation fire extinguishers more than ten years before the FAA first issued its advisory circular, and almost thirty years before it adopted a formal standard on the matter. Government standards also tend to respond to specific problems identified through real-world experience. For every serious airplane accident, there is a new FAA rule. This means that decisions are often made under pressure and with emotion, as in the months following the Air Canada fire. The pressure to "do something" becomes so overhwelming that valid concerns, such as whether household smoke detectors will work reliably on airplanes, too easily get brushed aside. Conversely, once "something" is done, there is little or no pressure to follow up on the action and reassess its wisdom in light of subsequent field experience.

Private standards-setters are also generally more comprehensive in defining "the problem," although the grain elevator case demonstrates that there are certain problems that only the government is likely to address. Private standards are more likely to be conceived as a total package, covering most aspects of the product or process from design and performance to labeling and production. In contrast, both of the CPSC standards addressed a single issue or single solution. So, too, with the FAA. Whether comprehensiveness is an advantage depends on the relationship between private and public standards. If the two were mutually exclusive, the private approach would probably be preferable. "It is generally better to regulate a range of problems satisfactorily than to do one in great detail," admitted a former CPSC commissioner who often favored government regulation.