[gumby]

Lie? No. They just seek to a set point that is socially undesirable but may be preferred to a powerful subset of participants. There are other systems have the same control system issues.

I don't mean this a sarcasm. The point of good regulation is to try to change the incentive structure so that the system seeks to a different peak in the possibility space, avoiding various hill-climbing errors along the way. That's hard, but the approach of mandating how can be easier to write but much harder to implement (less stable, expensive, and requiring a lot of government effort).

A good example is exchange trading schemes. Instead of requiring a huge bureaucracy, the European trading system issues a number of emissions permits and then lets the market decide whether to upgrade or buy permits. As the number of certs sinks predictably over time, people can plan ahead to commit to building better plants (or retrofit) vs eking a couple of extra years out and then shutting the plant down. Less paperwork, fewer regulators, and letting the market seek to the point you want.