A New Era for Safety Regulation

Abstract

This chapter proposes a new and improved strategy for safety regulation. One that would overcome the problems with the current method of regulation. In defining a new strategy, one must first ask what is the ultimate objective? Excluding concerns about customer rationality, the main objective for deploying safety regulation in the railroad industry is to counter myopia. Myopia may stem from inexperience or from unscrupulous intent. The two causes of myopia call for quite different responses by the government. Safety regulations will therefore have to comprise both an educational system to ensure that new inexperienced railroads do not select lower levels of safety than they should, and a delinquency system to identify and punish railroads who are engaging in unscrupulous myopic behavior.