Rethinking government regulation: When it comes to society’s critical infrastructures, regulatory functions are dispersed beyond the government regulator of record
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Here’s my starting point on government regulation (from our 2016 Reliability and Risk):
. . .as long as infrastructure regulation is equated with what regulators do, society will have a very myopic understanding of how regulation functions for critical infrastructures. The regulation of infrastructures is not just what the regulators do; it is also what the infrastructures do in ways that their regulator of record could never do on its own.
Contrary to conventional wisdom, it is not a criticism of regulators to say they never have the same timely information as do those operating the critical infrastructures being regulated. It’s a statement of the obvious cast as a negative. Restate the obvious, but now as a positive: those who have the real-time information must fulfill regulatory functions that the official regulator cannot fulfill. How well they are fulfilling the regulatory functions depends on (1) the skills in real-time risk management of their reliability professionals and (2) where those professionals are located, which for our purposes means the infrastructure control rooms and their respective support units.
From our perspective, it makes little sense for critics to conclude that regulators are failing because formal regulations are not being complied with, if the infrastructures are managing in a highly reliable fashion and would not be doing so if they followed those regulations to the letter.
In practical terms, this means there is not just the risk of regulatory non-compliance by the infrastructure, there is also the infrastructure’s risk of compliance with defective regulations. Either way, the importance of time from discovery to correction of error reinforces the dispersed nature of regulatory functions: A shorter time to error discovery has the advantage of discovering errors that would have propagated into much larger ones if left uncorrected.
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The upshot for the government regulator of record?
If policymakers insist that the regulator’s task is one of regulating the whole cycle of the infrastructure throughout its operational stages of normal, disrupted, failed, and recovered onwards, then it is better to say that at best the regulator of record is in permanent setback management. At worst, its own activities require the coping behavior we associate with emergency management during crises.
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And yet the demands on government regulation are increasing at the same time. No one should doubt, for example, that the more interconnected the systems to be regulated and the more complex each system and its own regulations are, the more regulatory and inter-regulatory oversight will have to be given to latent interconnections, risks and the transition thresholds where they shift from latent to manifest.
Regulating ahead for latent interconnectivities is a very difficult task for even one regulator, let alone for something like “inter-regulatory oversight.” This too reinforces the need for a dispersed regulatory regime well beyond the regulator of record.
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The challenge then is to better understand the institutional niche of critical infrastructures, that is, how infrastructures themselves function in allocating, distributing, regulating and stabilizing that reliability and safety apart from, if not independently of, the respective government regulators of record. That this knowledge will always be for regulators partial and punctured by gaps and ignorance should go without saying.
There is, however, a serious asymmetry in the current design orientation for regulating infrastructure reliability (including safety) and the practice orientation of reliability professionals in and around control centers for the infrastructure.
When reliability professionals express discomfort over a design orientation, regulators and others insist that this has to be expressed in terms of formal analysis, where the burden of proof is on the reliability professional to show what in this design orientation is not reliable. That burden of proof, on the contrary, is the responsibility of the regulator; it is not a regulatory function of the infrastructure, when real-time service reliability matters.
Rethinking the periodization of catastrophe management: Reframing the 2020-2023 drought in East Africa and its response
What I want to do here is contextualize a recent major East African drought differently in order to show what remains a catastrophe has some different but very important policy and management implications when reframed.
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Start with debates over periodizing World Wars I and II. It’s one thing to adopt the conventional periodization of the latter as 1939 – 1945. It is another matter to read in detail how 1931 – 1953 was a protracted period of conflicts and wars unfolding into and from a central paroxysm in Europe.
In the latter perspective, the December 1941 – September 1945 paroxysm, with the Shoah and the frontline carnage, was embedded in a longer series of large regional wars. These in turn were less preludes than unfolding processes worldwide. (Think: Japan’s invasion of Manchuria in 1931, Italy’s invasion of Ethiopia in 1935, the late 1940s Dutch war in Indonesia, the French war in Indochina from the late 1940s through early 1950s, and the Korean War.)
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Now, reframe the recent, extended East Africa drought as one such paroxysm, with drought-related conflicts leading up to and following from it. What follows from such a re-construction?
Current emergency management terminology about this or that “longer-term recovery” would be considerably problematized when the longer term is one drought unfolding into another and then over again. Immediate emergency response would look considerably less proactive when embedded in a process of recurring response always before the next disaster
What does this mean practically?
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Clearly one major follow-on is government budgets (in the plural) for their recurrent operations in pastoralist areas. Or more pointedly, you’re looking at the recurrent cost crises of East Africa governments–which, to my mind, far too few critics analyze when fixated on failures of capital development projects and programs for pastoralists.
My own view is that you have to have recurrent operating budget already in place in order to get recurring drought response and recovery more effective on the ground over time.
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So what?
One major reason why “recurring drought response and recovery” is better treated as part of government’s recurrent budget than capital budget is because pastoralists, when acting like other reliability professionals, give ongoing priority to the real-time prevention of other disasters from happening along the way and the need for their improvisational behavior to do that.
Yes, the government budget for staff operations falls woefully short in helping pastoralists do so, but it is government operations we are talking about, not the log-frame of a capital development project.
Source
Buchanan, A. (2023). Globalizing the Second World War. Past & Present: A Journal of Historical Studies 258: 246-281.
Rethinking economics: Moving investment and its implications to center stage
“Therefore, infrastructure and connectivity, rather than trade and investment, should be the focus in order to understand the specific character of any Chinese sphere of influence among the Mekong states.” (Greg Raymond 2021. Jagged Sphere: China’s Quest for Instructure and Influence in Mainland Southeast Asia. Lowy Institute: Sidney Australia accessed online at https://www.lowyinstitute.org/sites/default/files/RAYMOND%20China%20Infrastructure%20Sphere%20of%20Influence%20COMPLETE%20PDF.pdf)
“What is the first act that creates the economy? It is neither production nor exchange (market or otherwise). It is the storing of wealth over time, with which I associate with investment.” (Daniel Judt 2025. “Storage, Investment, and Desire: An interview with Jonathan Levy,” Journal of the History of Ideas Blog accessed online at https://www.jhiblog.org/2025/02/24/storage-investment-and-desire-an-interview-with-jonathan-levy/)
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Greg Raymond makes a convincing case for his point above and I too am among many who emphasize the centrality of infrastructures and their interconnectivities in underwriting economies and the maintenance of market transactions.
The point of this blog entry, however, starts with the argument of economist, Jonathan Levy, in his recent The Real Economy: Contrary to conventional economics with its fulcrum of allocation and exchange, it is investment which creates economies. And it is that association to infrastructure suggested in the above phrase, “storing of wealth,” that prompts the comments below.
Thinking infrastructurally about investment highlights three under-recognized insights that are highly policy relevant.
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First, investments import the long run into infrastructure analysis in ways that a focus on allocation and exchange do not. These ways range from the banal–it takes time for the infrastructure to be planned, funded, implemented and then operated as constructed and managed–to more invisible considerations.
The pressures to innovate technologies, in particular, means that some infrastructure technologies (software and hardware) are rendered obsolete before the infrastructures have been fully depreciated. This brings uncertainty into investing in technology and engineering of infrastructures that can last ahead, say, two generations or more. Here, the long run means another short-run, and those short-runs at times can look like boom and busts, well short of anything like “infrastructure full capacity.”
And yet, second, there are examples of infrastructures being operated beyond their depreciation cycles. Patches, workarounds and fixes keep the infrastructure in operation, even if that this reliability is achieved at less than always-full capacity. It takes professionals inside the infrastructure to operationally redesign technologies (and defective regulations) so as to maintain critical service provision reliably during the turbulent periods of exogenous and endogenous change.
Third, this professional ability to operationally redesign systems and technologies on the fly and in real time in effect extends what would otherwise be a shortened longer run (e.g., due to always-on innovation and defective design)–and extended under the mandate of having to maintain systemwide infrastructure reliability. Introduction of what are premature innovations is countervailed by those professional patches, workaround and fixes that sustain system reliability, at least for the present. These practices are often rendered invisible under the bland catch-all, “infrastructure maintenance and repair,” where even operations become part and parcel of corrective maintenance..
The latter means, however–and this is the key point here–that maintenance and repair are far from being bland and worthy only of mention. Really-existing maintenance and repair and their personnel are in fact the core investment strategy for longer term reliable operations of infrastructures faced with uncertainties induced from the outside (e.g., those external shocks and surprises over the infrastructure’s lifecycle) and from the inside (e.g., those premature engineering innovations).
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So what?
Since the 2007/2008 financial crisis, we’ve heard and read a great deal about the need for what are called macroprudential policies to ensure interconnected economic stability in the face of globalized challenges, ranging from defective international banking to the climate emergency. These calls have resulted in, e.g., massive QE (quantitative easing) injections by central banks and massive new infrastructure construction initiatives by the likes of the EU, the PRC, and the US.
What we haven’t seen are comparable increases in the operational maintenance and repair of critical infrastructures necessary for functioning economies and supply chains, let alone for “economic stability.” Nor have you seen in the subsequent investments in science, technology and engineering anything like the comparable creation and funding of national academies for the high reliability management of those backbone critical infrastructures. Few if any are imagining national and international institutes, whose new funding would not be primarily directed to innovation as if it were basic science, but rather to applied research and practices for enhanced maintenance and repair, innovation prototyping, and proof of scaling up.
In sum, if I am right in thinking of longer-term reliability of backbone infrastructures as the resilience of an economy that is undergoing shocks and surprises, then infrastructure maintenance and repair–and their innovations–move center stage in ways not yet appreciated by politicians, policymakers and the private sector.
Rethinking societal reform: How does your version of reform shift the odds in favor of a prospectively more reliable foundational economy?
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An AI-generated definition is good-enough to start: “The ‘foundational economy’ (FE) is the infrastructure of everyday life, including essential services like water, electricity, healthcare, and housing, that are required for society to function.” (The key website is The Foundational Economy.) Even at that level of abstraction, it’s clear there is no one and only FE with one and only one set of critical infrastructures in each.
More important than their numbers and diversity, it’s that “infrastructure” I take up here and expand below: Since critical infrastructures and their operating networks of personnel are required so as to make it possible for a collective to exist and thrive economically let alone societally, so too societal reform and the foundational economy are instrumentally linked in ways that commend further elaboration.
How so?
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Here are ten propositions by way of answer:
1. By definition, a foundational economy would not exist if it were not for the reliable provision of electricity, water, telecoms, and transportation. Here reliability means the safe and continuous provision of the critical service in question, even during (especially during) turbulent times. This means, for example, that the physical systems as actually managed and interconnected on the ground help establish the spatial limits of the FE in question.
2. By extension, no markets for goods and services in the FE would exist without critical infrastructure reliability supporting their operations. This applies to rural landscapes as well as urban ones.
3. Other infrastructures, including reliable contract and property law, are required for the creation and support of these markets, though this too varies by context. One can, for example, argue healthcare and education are among the other infrastructural prerequisites for many FEs (as above).
4. Preventing disasters in the face existing and prospective uncertainties is what highly reliable infrastructures do. Why? Because when the electricity grid islands, the water supplies cease, and transportation grinds to a halt, then people die and the foundational economy seizes up (Martynovich et al. 2022).
5. Another way to say this is that within a foundational economy you see clearest the tensions between economic transactions and reliability management. Economics assumes substitutability, where goods and services have alternatives in the marketplace; infrastructure reliability assumes practices for ensuring nonfungibility, where nothing can substitute for the high reliability of critical infrastructures without which there would be no markets for goods and services, right now when selecting among those alternative goods and services.
6. Which is to say, if you were to enter the market and arbitrage a price for high reliability of critical infrastructures, the market transactions would be such that you can never be sure you’re getting what you thought you were buying. Much discussion around moral economies and agrarian reform can be described in such terms.
7. This in turn means there are two very different standards of “economic reliability.” The retrospective standard holds the foundational economy–or any economy for that matter–is performing reliably when there have been no major shocks or disruptions from the last time to now. The prospective standard holds the economy is reliable only until the next major shock, where collective dread of that shock is why those networks of reliability professionals try to manage to prevent or otherwise attenuate it. The fact that past droughts have harmed the foundational economy in no way implies people are not managing prospectively to prevent future consequences of drought on their respective FEs–and actually accomplishing that feat.
8. Why does the difference between the two standards matter? In practical terms, the foundational economy is prospectively only as reliable as its critical infrastructures are reliable, right now when it matters for, say, economic productivity or societal sustainability. Indeed, if the latter were equated only with recognizing and capitalizing on retrospective patterns and trends, economic policymakers and managers in the FE could never be reliable prospectively in the Anthropocene.
9. For example, the statement by two well-known economists, “Our contention, therefore, following many others, is that, despite its flaws, the best guide to what the rate of return will be in the future is what it has been in the past” (Riley and Brenner 2025) may be true as far as it goes, but it in no way offers a prospective standard of high reliability in the foundational economy (let alone other economies).
10. So what? A retrospective orientation to where the economy is today is to examine economic and financial patterns and trends since, say, the 2008 financial crisis; a prospective standard would be to ensure that–at a minimum–the 2008 financial recovery could be replicated, if not bettered, for the next global financial crisis. Could the latter be said of the FE in your city, metropolitan area or across the rural landscape of interest?
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In short, how does your version of societal reform shift the odds in favor of the prospective standard for a reliable foundational economy ahead?
Note by way of concluding that the policy-relevant priority isn’t scaling up your reforms beyond the FEs as much as your determining the openness of those FEs to being modified in light of evolving affordances under reforms during the Anthropocene.
Sources.
Martynovich, M., T. Hansen, and K-J Lundquist (2022). “Can foundational economy save regions in crisis?” Journal of Economic Geography, 1–23 (https://doi.org/10.1093/jeg/lbac027)
Riley, D. and R. Brenner (2025). “The long downturn and its political results: a reply to critics.” New Left Review 155, 25–70 (https://newleftreview.org/?pc=1711)
See also my When Complex is as Simple as it Gets: Guide for Recasting Policy and Management in the Anthropocene and A New Policy Narrative for Pastoralism? Pastoralists as Reliability Professionals and Pastoralist Systems as Infrastructure
WHEN COMPLEX IS AS SIMPLE AS IT GETS 