The law of unintended consequences is an important concept in policy-making and implementation, and in project development and evaluation. Put simply, the law relates to the unintended results of a decision or action emanating from a policy or project. For example, building a badly needed highway, only to discover later that it bisects a wildlife migration trail or a grazing path for livestock. Of course, these are simple examples that project planners usually take into account, but they do illustrate the point.
The concept of unintended consequences illuminates the perverse unanticipated effects of legislation and regulation. In 1692, the English philosopher and economist John Locke urged the defeat of a parliamentary bill designed to cut the permissible rate of interest from 6 percent to 4 percent. Locke argued that instead of benefitting borrowers, as intended, it would actually hurt them. People would find ways to circumvent the law, with the costs of circumvention borne by borrowers. To the extent the law was obeyed, Locke concluded, the chief results would be less available credit and a redistribution of income away from “widows, orphans and all those who have their estates in money.”
The first and most complete analysis of the concept of unintended consequences was done by the American sociologist Robert K. Merton in 1936. In an influential article titled “The Unanticipated Consequences of Purposive Social Action,” Merton identified five sources of unanticipated consequences. The first two, and the most pervasive, were ignorance and error. Third, “imperious immediacy of interest,” meaning that the desire for the intended consequence is so great that the potential unintended consequences are purposefully ignored. Fourth, “Basic values”, and fifth, “self-defeating prediction,” meaning the instance where the public prediction of a social development proves false precisely because the prediction changes the course of history. This is the flipside of the idea of the “self-fulfilling prophecy.”
The law of unintended consequences provides the basis for many criticisms of government programmes. Unintended consequences can add so much to the costs of some programmes that they make the programmes unwise even if they achieve their stated goals. And the costs needn’t be financial exclusively. At the very least, policy makers and implementers should have reason to pause before ploughing ahead with their programmes.
I was reminded of this concept a few days ago on reading a couple of articles appearing in the Business Day newspaper dated Tuesday, 30 March 2021. The first article, “Report shows how to get country’s infrastructure delivery going,” contained a very illuminating comment. The sentence in question, “Probes of anticompetitive behaviour in those boom years and the resultant fines weakened many of the largest construction giants…” caught my attention because I was in the thick of it in those days post the FIFA World Cup construction boom. Although I wasn’t an accused personally, the very successful company I was working for was, and a number of my colleagues became sacrificial lambs as they were either demoted or forced into early retirement. Rigorous and sustained competition law training followed, and constant nervousness and diffidence lengthened marketing and sales cycles. Once great companies, and the groups to which they belonged, started on downward spirals, resulting in job losses and loss of engineering capacity for the country. While I am generally supportive of anti-competitive legislation, it’s undeniable that perhaps in this case, where I have first knowledge, the unintended consequences were disastrous.
The second article, “Power ships a worse nightmare for SA than stalling planes,” relates to a plan to park four power ships off the coast of South Africa to provide much needed backup because of the constant load-shedding being experienced by citizens and industry. This is clearly a drastic development, one that is very embarrassing and distressing. The constant management and board shakeups that Eskom has undergone, ostensibly with the aim to rid the state-owned company of corruption, have clearly had a very big unintended consequence. While the jury is still out on the intended aim to rid the company of corruption (after all, a number of subsequent CEO’s and Chairman have had to be subsequently got rid of for similar reasons), it is undeniable that while for some time there was a respite from load-shedding, it has returned with a vengeance, and the alleged twenty-year contracts for the power ships don’t bode well for any immediate end to load-shedding. I am not here defending past CEO’s or boards, merely pointing out analytically the unintended results of the decisions to remove them.
