By Connie McCandless

For regulators in all jurisdictions, it’s the uncertain behaviour of people that’s the root of many difficult problems. People and uncertainty go hand in hand. All the possibilities of what can happen haven’t been considered, nor can they be.

People, whether they’re part of the system of regulation or the regulatees, may be defiant or cooperative, disinterested or informed, incompetent or proficient, dishonest or honest.

It’s always a shock to discover dishonesty in a system that demands just the opposite. In my hometown of Toronto, it was shocking to learn that lottery ticket sellers have been defrauding jackpot winners. So in Ontario, The Ontario Lottery Commission is about to be regulated.

Human behavior is a key risk variable. Regulations that are intended to promote desired behaviors often have unintended negative consequences. To achieve their objectives, regulators are advised to employ a variety of controls and incentives consistent with the rich possibilities for how people may respond.