II. Why we have fire safety regulation: scientific and popular underpinnings
What is responsible for building fires?
Building fires are caused by natural phenomena, accidentally, or intentionally. The most common causes are failed equipment, faulty construction, and human error. Yet, while most fires might be prevented by strong building and fire safety codes, arson -- probably the most odious type of fire -- is difficult to prevent by regulation, regardless of how well construction techniques are specified.
Fire tragedies can thus be blamed on natural disasters, faulty construction, failed codes or inspections, or malefactors and delinquents. Moreover, at times, base ideologies have also been held culpable for building fires (and other disasters), and such sentiment has weighed heavily on the public mind. For instance, "greed and ignorance" have been blamed for fatal fires in China from 1993 to 1995, in which thousands of people were killed. One businessman was jailed for two years "for ignoring fire safety regulations" after his factory burned, killing eighty-seven people (Lim 1996). Moreover, major fires can be a powerful means of influencing the public mind toward being more compassionate. For instance, some writers have used fire tragedies as a means to urge employers to take better care of their employees working in "sweatshops" where the work safety environment may not be the best (Gitlin 1996, p. M-5, cf. Der 1993 p. 27).
Theories about safety regulation
Because urban fires are widely considered to be a terrifying nuisance, their reduction is in the public interest. Some would argue that markets fail to provide adequate public fire safety and thus there is need for public provision. Jan K. Brueckner argues that fire protection has properties like a congestible public good, and that public provision becomes more efficient as a city grows (Brueckner 1981, pp. 45, 57). However, we are immediately confronted with a paradox. In the aforementioned tragedies, a dreadful fire destroyed a structure that apparently had fallen under the scrutiny of government regulation. Somehow, these buildings had passed inspection (or were granted continued occupancy), with the owners receiving building and operating permits. Consequently, there is a reason to question the government's ability to provide fire safety effectively.
In my initial study of fire safety, I compiled and arranged the thought of many scholars in order to construct four principal theories about safety regulation (see Cobin 1997, pp. 14-34, plus its bibliography of sources). Note that in some of the following classifications, an author credited with contributing to the perspective included might not have identified himself with it previously. Moreover, if his work contributes to more than one theory, he might find himself under more than one category. Indeed, not every author attempts to provide a complete theory of safety regulation. Thus, on account of the lack of a cogent and coherent theoretical framework, I attempted to contrive one by fitting together relevant theoretical pieces from several useful but often incomplete theories about safety regulation policy. While some overlap is bound to remain, for the most part these theories, summarized below, provide mutually exclusive motifs and perspectives regarding safety.
- Regulation increases safety but perhaps inefficiently. Scholars who have made important contributions to this view (even if they would not accept it entirely) include W. Kip Viscusi, J.C. Miller and B. Yandle, Lester B. Lave, Wesley A. Magat, Richard Jay Zeckhauser, Carol Chapman Rawie, and Allen D. Manvell.
- Regulation is an ineffective but desirable placebo. Although regulation may not positively affect safety, it might create a perception of safety which alleviates public uneasiness. Scholars who have contributed pieces that fit into this perspective (which is complied from fragments of interdisciplinary thought) include R. Wilson and A.C. Crouch, Paul Slovic, Marc Pilisuk, Susan Hillier Parks, and Glen Hawkes, J. William Spencer and Elizabeth Triche, Gabor Lorant, William Anderson, and David Bullen, Millet Granger Morgan, and, to a lesser extent, W. Kip Viscusi.
- Regulation is a public choice phenomenon that primarily serves special interests (3). Hence, the "public interest" in safety may not be met by regulation. In addition to the large body of public choice literature, spawned by scholars James Buchanan, Gordon Tullock, and Mancur Olson, this perspective has been extended to safety issues by Robert Tollison, George Stigler, Jack C. High, Ann P. Bartel and Lacy Glen Thomas, Peter Huber, James Saltzman, John Cobin and, to a lesser extent, W. Kip Viscusi and Richard Jay Zeckhauser (along with a number of practitioners in the building industry).
- Regulation is unlikely to increase safety efficiently, and perhaps not effectively, because it is always constrained by inadequate local knowledge. Contributors to this perspective, besides those fundamental contributions by Ludwig von Mises and Friedrich A. von Hayek, include Randall Holcombe, Michael S. Wald and Maria Woolverton, John Cobin, Peter Huber, and Albert L. Nichols and Richard J. Zeckhauser. This theory is related to, but sufficiently different from, the first theory above to warrant distinction. Note that in the first theory safety regulation "works" while according to this theory it does not work -- at least not in terms of the public interest.
Accordingly, an economic understanding of costs and incentives tends to bolster the latter two theories. For instance, it is plausible that building regulation might increase the costs of using certified and licensed technicians and thus increase the incidence of do-it-yourself installations and repairs. If so, the regulation might lead to greater incompetence in technical matters of construction and safety and thus indirectly cause more failures and disasters. Consequently, even in the absence of public choice and knowledge problems, it is plausible that building safety regulation will end up reducing overall safety. Furthermore, when public choice and knowledge problems are also present, the propensity for building safety regulation to fail would be exacerbated.
Popular opinion and public policy in fire safety regulation
It may be that few people have questioned the need for at least some fire safety regulation via government provision. However, this fact does not mean that the public interest has been best served by it. Indeed, there could be market alternatives that would provide such services just as well or better. No one claims that markets bring perfection. The issue is simply whether government regulation can serve the public interest better than markets. It is precisely this point which is disputed by public choice and knowledge theories.
Government safety regulation has proven to be onerous at times to both the private and public sector -- even to institutions that purport to serve the public interest. For instance, many educational institutions, often established with the public interest in mind, have been threatened by fire safety regulation. Fire code violations caused public schools in Washington, D.C. to close down in September 1994 (Kelly 1994, p. 6). In Rancho Cucamonga (near Los Angeles), a private school that specializes in teaching talented children more about the fine arts was threatened with closure due to failure to "meet fire and safety code requirements" (Berry 1994b). That school was later forced into insolvency "by a series of city mandated building improvements" (Berry 1994a). The opening of a new school in St. Louis was delayed in part because of problems with fire and building code compliance (Khorll 1998, p. 3) (4). However, some schools are evidently exempt from the stringent sanctions of safety regulation and continue operating in spite of deficiencies (5). As always, such exemptions (or any special privileges) are objects of scrutiny for public choice researchers. The processes of both granting and obtaining such exemption privileges would be ideal candidates.
While government provision has often left something to be desired, markets have succeeded in safety provision. There is evidence that firms, which have an incentive to please customers en route to maximizing profits, establish their own technical and safety standards and maintain their own inspection teams. Such is the case with Hilton International (Webster 1995, p. 45) and with Walt Disney World (Cobin 1997, pp. 112-113 and Foldvary 1994, pp. 123-132).
Notable complaints about fire and building safety regulation
Fire safety has not been the only failure in building regulation in Santiago, Chile. In recent years, there have been many reports of fatal or injurious tragedies in apartment buildings with inadequate ventilation. In Chile, hot water is usually obtained on demand in a "calefon" unit (i.e., there is no hot water tank). The water is heated by flames as it passes through a pipe. These water heaters generate carbon monoxide as a by-product, which can be dangerous without adequate ventilation. In addition to many suffocation cases, there have also been explosions caused by gas leaking into solid concrete apartments with no way to escape, resulting in an inferno when a spark is used to ignite the range.
Problems even arise when the building code and state-licensed architects and engineers are careful to ensure that adequate ventilation is incorporated in buildings. (Indeed, it may be that all modern Santiago buildings are designed well.) However, due to the lack of proper inspections, many contractors have been able to compromise the effectiveness of ventilation shafts by filling portions of them with pipes and cabling.
Some people are complaining that the building codes are outdated and obsolete and that there is widespread shortage of personnel capable of performing inspections. There is also the problem with maintenance, where ventilation ducts have been reported to go without cleaning for long periods 3/4 eighteen years in one case. Thus, Cuerpo de Bomberos de Santiago (which is the private fire department in downtown and northeastern Santiago staffed by volunteer firemen and a handful of salaried administrators) has recently become involved with trying to step up prevention and one mayor has proposed imposing stiff fines for non-compliance (Acuña 1997).
The local gas company has also been taking readings on the parts per million of carbon monoxide in relatively airtight places that are suspected to have problems. To say the least, the frequency of these kinds of problems has made many apartment residents uneasy. When problems are found, often in relatively newer buildings in the more affluent sectors of Santiago, people have been compelling contractors to fix the ventilation system (Rivera 1998).
Regardless of where blame is ultimately placed for these sorts of tragedies, it is clear that Santiago building regulation has failed to protect the public from hazards due to improper ventilation. Apartment dwellers have been confiding in government provision of safety to their peril.
Recent fire and flood disasters in Bangkok have been blamed on poor planning and a lack of disaster preparedness. According to some sources, there are also serious design flaws in shopping malls and department stores (where the number of fires continues to rise), and the fire brigade is incompetent. "Firemen fighting a blaze in Nonthaburi in October  found their standard large-diameter hose connection did not fit the hydrants at the building site." City planners have performed inadequately as well, with recent infrastructure development being best described as "guided anarchy", where such poor planning could produce disastrous consequences (Gill 1995).
Failures of building regulation in other places Government provision of building inspection is being scrutinized all over the world. The incredible destruction of so many approved and inspected buildings in Kobe, Japan, after the 1995 earthquake raised many concerns about the adequacy of safety regulation. The same was true in Florida, after Hurricane Andrew damaged 100,000 homes and destroyed 25,000, most of which had been built to code standards and inspected by the government. Moreover, some two hundred deaths due to major government-inspected building collapses of malls in Seoul, South Korea and Kuala Lampur, Malaysia were manifestations of government failures in building regulation. The venality of the Seoul building inspector, who "confessed to taking bribes", further enlivens public choice theories about the perverse incentives that safety regulators face (Cobin 1997, pp. 10-12). Such perverse behavior also corresponds to the problems with corrupt or inept regulators and delinquent firemen in Manila, New York, and Cape Town noted earlier.
Accordingly, popular opinion and cases provide plausible support for accepting the more critical theories of safety regulation in public policy. Other evidence could also be brought forth in favor of fire safety regulation. However, rather than rely solely on speculation, a scientific analysis must consider the empirical work which has been done, such as my study of fires in Baltimore (Cobin 1997), as well as some new evidence from Santiago. Accordingly, as the ensuing section shows, available data bolster the views of Howard, Sowell, and the critiques of public choice and knowledge theories rather than the other perspectives.