It’s easier to seek forgiveness than permission. And it might be more effective as well.

This Monday in Auckland, a relatively small group of tech entrepreneurs and experts in technology law got together over lunch to talk about whether New Zealand’s regulatory regime is keeping up with the pace of change.

I was invited along because The New Zealand Initiative will next year be writing a report on whether New Zealand has been stuck with analogue regulation in a digital world.

The organisers and I had expected there to be discussion of specific bits of regulation well in need of changing. Are things like the government’s review of the Telecommunications Act and broadcast regulation heading in the right direction? That would have been especially helpful in scoping our coming report.

Instead, things seemed a little bleaker. Where there are individual regulations and systems that seem nonsensical – and our regime covering classification of films and TV shows for internet streaming definitely counts – the conversation instead turned to a pervasive bureaucratic culture that seems focused on finding reasons to say no. And so it can be better not to ask permission.

Suppose you have a new idea for a tech service at the interface of business and government. Undertaking it does not break any rules that you know about – partially because the bureaucrats did not anticipate that this kind of work could be done and so hadn’t gotten around to writing rules yet.

They will write new rules

The general consensus was that, if you go to the ministries to explain your idea and what it can accomplish, the bureaucrats will invent new rules to put in front of you to keep you from getting going. Maybe there are privacy reasons – the current go-to reason for saying no. But there are always reasons and it is usually no. When the ministries are faced with a pitched good outcome, imagined fears of downside political risk can kill the project.

If you instead go ahead and produce a working pilot version with some demonstrable results, so you can show the ministry what your service can achieve, you’re more likely to make progress. Tangible real outcomes trump bureaucrats’ imagined fears. And so seeking permission ahead of time can be rather counterproductive.

The overall political culture, which seems to have permeated too many ministries, is the avoidance of bad press. Trying nothing brings no risk. Trying 100 things, 95 of which work, brings perceived political costs from the five failures that outweigh everything else – a sharp contrast to the ethos in the tech sector, which emphasises multiple experiments and fast failure.

And as the overall regulatory structure has shifted from principles-based approaches that more easily accommodate a changing technological environment to more rigidly prescriptive approaches, the bureaucracy has bought itself certainty at the expense of fragility.

But growing bureaucratic risk aversion does not arise from out of nowhere.

Given the incentives facing legislators and those in the ministries, current outcomes are not all that surprising. If you set the legislative and regulatory environment such that great stuff can happen, you will not get much credit for it. But if one bad thing happens and it can be pinned on some protective or restrictive bit of regulation you failed to pass, life gets tough. You are rarely damned for the innovations you prevented.

But at least on big data, technology innovation and privacy, there is a way around it – by learning from the private sector. Technology companies help ensure that users are comfortable with how their private details are handled by giving users some control over their data’s use. If you want a better user experience in Windows, Microsoft can collect more data on how you use your computer system and work to fix problems as they arise. If you want to opt out of Microsoft’s data collection, you can do that too.

Giving users control over how their data is used lets them opt into things that are really beneficial for them – as they see it. Once others see the benefits enjoyed by the early adopters, imagined fears ease back and more people opt in.

Government’s users – voters – have little control over how their personal data is used when it is collected by the government. Legitimate privacy concerns then turn into strict regulations, making it very difficult for anyone to use the data collected by the government. And better data analytics makes things scarier.

It makes perfect sense that the government makes it exceptionally hard for anyone else to see your tax return or health records. But the overarching restrictions also keep Statistics NZ from releasing anonymised data sets that could be invaluable to researchers.

Where the US allows anyone to download a small representative and anonymised sample of the census, Statistics NZ only releases anonymised data under restrictions that strongly hinder its use. The Statistics Act is rather constraining, at least in part because there has been far greater focus on the costs if something ever went wrong than on the benefits we miss out on because of an overly restrictive approach.

People who put less value on data privacy should be able to opt into fewer restrictions on the use of their data. Consider big data innovations around health outcomes. A lot of people would object strongly to the government’s handing over medical records to private providers but others would be happy to share their data if they got something valuable in return, like much better health apps with relevant personalised advice.

The Initiative’s recent report on special economic zones recommended taking a regionalised approach to policy reform, letting local councils opt into policy trials to find out what works and to take some of the political risk out of trying new things.

Opting out of privacy

But that approach does not have to be tied to geography. Letting us as users of government services, and as data points in the government’s big data sets, opt into better personalised services by opting out of parts of the Privacy Act could also be worth considering.

New Zealand has a lot of advantages for tech innovation. At worst, in a small country, you can sometimes route around the risk-averse bureaucrats by going directly to the minister – if you’re lucky enough to have had one of the better ones allocated to your area.

And, New Zealand’s generally clean tax regime is an added advantage. Consider AirBnB, which brings together travellers and those willing to rent out their guest bedroom to strangers in the sharing economy. Hotel competitors in America can try to thwart innovators like AirBnB by appealing to fairness: hotels face hotel taxes and AirBnB operators, until recently, did not. But New Zealand does not have the kind of tax structure that lets incumbents disguise this sort of protectionism as fairness – although the GST treatment of imports stands as the exception.

But, if bureaucrats had fewer reasons to say no, we might get better outcomes. And entrepreneurs might have less need to seek forgiveness.