Comparative Summary

The difference between public and private standards-setting is not just a matter of degree, it is a matter of kind. Public efforts are not simply stricter or more lenient than their private counterparts. The systems are too different to be compared one-dimensionally (see table 8). There are important differences in how public and private standards-setters (1) resolve philosophical questions about the appropriate scope of safety regulation, (2) estimate costs and benefits, and (3) act over time and in the context of a larger regulatory program. These observations are troubling because they cast doubt on the reasons most commonly given in favor of one form of regulation over the other. Public regulation is not always stricter; private regulation is not always more reasonable. The performance of the two sectors is mixed, and there are different reasons to favor each.

The conventional wisdom about strictness and leniency is only par-

tially correct. Although public agencies appear to err systematically on the side of safety, their private counterparts do not always err in the other direction. Three of the four private cases studied are characterized by decisions that also err on the "safe side." At least one of these cases, the NFPA standard for aviation fire extinguishers, is unreasonably strict, providing reason to conclude that the private sector occasionally makes the same mistakes as the public sector. A rough estimate of overall economic efficiency suggests that, for the standards studies here, neither sector has a clear advantage. On the public side, two of the standards were unreasonably strict (the CPSC on woodstoves and the FAA on aviation fire safety), and two were within the "zone of reasonableness" (the CPSC on space heaters and OSHA on grain elevators). On the private side, two of the standards were also in the zone of reasonableness (UL and AGA), while the others were split: one too lenient (NFPA on grain elevators) and the other too strict (NFPA on aviation fire extinguishers).

But these conclusions capture only a portion of the interesting differences between the two sectors. Public and private standards-setters do not just select different outcomes. They have entirely different ways

of looking at problems. Public agencies are more paternalistic in defining "the problem" for regulation. They are also more willing than private standards-setters to select early deadlines, require unproven technologies, and regulate in a manner that interferes with traditional notions of managerial discretion.

Finally, aside from the specific standards, the two sectors vary over time and in the relationship between single standards and the standards-setting system. Sometimes private standards-writers do not have adequate information; they do not even know that a "problem" exists. At other times, they do not agree that "the problem" should be addressed. When changes are made, they are most likely the result of either government information or anecdotal evidence. Private standards are rarely unreasonable, however, in the sense of requiring something that is not generally feasible both technically and economically.

Public standards-writing, on the other hand, is reactive and rarely adaptive. Standards-writing is usually prompted by accidents or injuries. Standards are viewed as one-time corrections and not, with the exception of the FAA, as something likely to be amended in the future. Government standards are generally narrower than private ones. Although prompted by specific problems, it is questionable whether the resulting standard will address them effectively. Information about potential costs and benefits is assiduously compiled, but seems to play only an indirect role in decisionmaking. Technical issues are generally avoided in favor of "softer" issues, such as how strong a warning should be or when a regulation should take effect. But government is willing to do things the private sector will not—protect people against their own mistakes, "push" technology—and in some cases it is successful.

The remaining two chapters examine proposals for improving public and private standards-setting systems. Chapter 11 examines popular proposals for altering procedural requirements, particularly in the private sector. Chapter 12 examines more promising alternatives, including interactive strategies, niches for public standards, and methods of improving private standards-setting.