On Sunday evening, February 27, 2011, Hoover Institution Senior fellow Scott Kieff and I addressed members of the Hoover Board of Overseers on a question that regrettably has risen to the top of the social agenda. What is to be done about the compliance culture—a culture born in response to excessive regulation—that now threatens to compromise the technological advances that have long spurred innovation in the United States?

This sad chronicle of relative decline takes place in three separate stages. The first involves the new mindset that too often finds harmful externalities and bargaining breakdowns in virtually all human endeavors. The second involves the bulky remedial structures that government puts in place to respond to these newly identified perils. The third stage involves the subtle alterations in the selection of the compliance culture: the rise government officials and key private officers and executives whose skills matter ever more in these more severe regulatory environments.

This three-fold progression is not specific to this or that industry, but applies across the board. In this essay, I shall discuss American’s compliance culture chiefly in land-use planning, drug development, and labor relations. Other industries could easily be added to the list.

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