The ongoing kerfuflle over MPs’ expenses and allowances got me thinking – some more. One of the most frequent comments from MPs subject to the journalists’ examination of the expenses has been that they were acting within the rules.
Regardless of the fact that MPs designed the rules themselves, the reliance on rules over principles lays a system open to abuse: everyone knows rules are there to be broken. If you have a rules-based system, you need a parallel system of compliance to make sure the rules aren’t being broken.
I was first made aware of the difference between principles and rules when I was training to be an accountant in the late 1980s. The UK system of accounting standards was based on fundamental principles, and it was often compared to the US system which was based on rules. Training in the UK, our system was always held to be more robust, because any system based on rules meant there would be exceptions to the rules – no system could be completely perfect – and that there would develop an industry looking at how to stretch the rules. The US rules-based system was given as an explanation of the accounting scandals of the 1990s and early 2000s, such as Enron – although the UK has had its share of scandals, too. But whilst one can find a way around rules, principles should be more robust.
I’m not great with rules: they tell one what to do, whilst I often like to find others ways of doing things. Society clearly needs rules – laws determine our behaviour. But principles would work better – if people stick to them.
Principles are more all encompassing than rules. The principle might be “drive safely”, the rules run to hundreds and are lengthy, and result in people driving at the speed limit even when it isn’t safe to do so. The principle might be “behave in a reasonable way”, the rules comprise our criminal law… And so on.
I think sticking to principles – if they could – would have saved our elected representatives a lot of embarrassment.