“Fearsome risks” driving policy over-reactions
In China, where a rash of protests, sometimes violent, have recently flared up and been slapped down, echoes from this year’s ‘Arab Spring’ of rebellion against iron-fisted rulers in the Middle East and North Africa are resonating loudly.
Not so much among the people, who in the main want reform and social justice rather than revolutionary overthrow, but in government, where much of what it does is driven by worry about threats to its control.. Authorities are scared foreign political unrest might inspire trouble at home, but instead of engaging with ground-level grievances, the Chinese government’s method of addressing discontent is the heavy hand.
Far from keeping a lid on the feared protests, the crackdowns on demonstrations, activists and artists could prove counter-productive, hardening sentiment against the state and raising the profile of dissenting figureheads.
What mass protests in Egypt, Libya, Syria and elsewhere show is that repressive rule ultimately increases the likelihood that demands for change, when they come, will be forceful, and clashes between government and people follow. In China, the danger is that needlessly tough discipline will lead to this kind of confrontation.
“Your own policies have unintended consequences … when they (governments) over-react to a situation, that may very well make the feared event more likely,” said Max Rudolph, a U.S. based fellow of the Society of Actuaries. “It’s the fear of the unknown, the fear of losing power.”
Common to autocratic governments is a far stronger determination to hold on to power than those elected according to purer democratic practices. That can mean repression and violence. Given that leaders of unelected regimes often face exile at best once they are thrown out, this is predictable. “If the Democrats (in the U.S.) lose power, they can come back four or eight years later, but if you’ve been ruling with force, your eventual overthrow is an existential threat, so the downside risk is much higher,” Rudolph said.
Behavioural studies suggest these kind of over-reactions to a perceived threat should be expected: as in individuals, so in governments. In a Harvard University paper in 2008, Cass Sunstein and Richard Zeckhauser argued that “fearsome risks” generate strong emotions which encourage people to act in order to stop frightening events happening, even if they are highly unlikely. Often the supposedly protective action turns out to be harmful. “In the face of a low-probability fearsome risk, people often exaggerate the benefits of preventive, risk-reducing, or ameliorative measures,” they wrote. “In both personal life and politics, the result is damaging overreactions to risks.
The international policy response to Japan’s nuclear disaster is another example of this model of behaviour. Soon after a huge earthquake hit northeastern Japan, wrecking a nuclear power station and causing radiation leaks, a backlash against nuclear power in Switzerland, Germany and Britain saw government approvals for new facilities suspended or delayed, and some working plants shut down.
Unlike Japan, which sits on an area of intense seismic activity, high-magnitude earthquakes in northern Europe are extremely improbable, and even the most apocalyptic forecaster would struggle to imagine a fifteen-metre tsunami drenching landlocked Switzerland. Still, European leaders agreed to stress-test reactors to prepare for those events.
In this case, fear trumped even the huge financial and environmental incentives to lessen Europe’s dependence on fossil fuels, a move many experts say requires the large-scale adoption of nuclear energy.
The problem is, nuclear power brings with it a disaster scenario which is very unlikely, but its potential consequences so terrifying, that extreme policy responses are not surprising.
“People have in their minds what they’ve read about Chernobyl, and what they learned in school which was that if a plant blows up, there’ll be a hole all the way through the world,” said actuary Rudolph.
There is no reason to expect that, when faced with difficult decisions, organisations will behave any less irrationally than individuals.
“These are basic characteristics of human decision-making in the context of huge complexity,” said Frank Baumgartner, a professor of political science at the University of North Carolina. “They are inevitable characteristics of all humans.”