Earthshaking Economics, Part 3

Dave Killion — March 15, 2011

There is nothing like an earthquake to stimulate interest in building codes. When a seismic event knocks down buildings in poor places like China or Haiti, media sages note that many of the deaths could have been prevented if only there had been a vigorously enforced building code. When tremors destroy buildings in rich countries like New Zealand or Japan, these insightful journalists can be counted on to remind us that no matter how many die, things would have been worse were it not for building codes. Well, thanks guys, but while you’re pointing out the obvious, how about mentioning some of the subtleties?

Perhaps you could point out that safer buildings are more expensive buildings, which means they force poor people to dedicate more of their limited incomes to shelter, and less to food, medicine, and education. You may wish to let us know that the lives saved by building codes may not outnumber the increase in lives lost to malnourishment and disease.  Maybe you could explain that politicians use the building code as a signalling device, by adding ever increasing requirements that are alleged to increase things like safety and energy conservation, but often simply raise the cost of building.

Finally, you might like to consider pointing out that people aren’t ignorant children who need nanny to look after them. Builders, consumers, lenders, and insurers have the knowledge and self-interest they need to guide them in developing building codes that strike their preferred balance between cost and benefit. And if you don’t think that’s the case, perhaps you’d like to tell us why.

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