Jacob Levy has a great post on the stupidity, cruelty, and inefficiency in cracking down on food stamp and welfare fraud.
A lot of people a lot of the time underestimate how burdensome, onerous, and intrusive complicated bureaucratic rules and regulations are. They casually treat the only cost of a rule as the cost to bad people of not doing whatever the rule prohibits, which isn’t a cost at all. But in order to have effect, rules have to be enforced; efforts have to be made to detect violations and monitor performance on an ongoing basis. This is a burden on the whole class subject to the rule, not only those who were going to break it. They have to devote themselves, at some margin, not to the thing they’re actually trying to do, but to proving that they’re not doing it in the prohibited way. They have to prove it through paperwork, which either they’re inexpert in compared to the official reviewing it or they have to (expensively) hire professionals to handle; and even people who had no intention of violating the underlying rule are put in perpetual jeopardy of wrongdoing-by-paperwork-mistake. They have to prove it in person to the various spot inspectors, administrative auditors, and other bureaucrats put in charge of monitoring and detection; and even people who had no intention of violating the underlying rule are made to feel like perpetual suspects or distrusted children instead of honest trustworthy adults.
The whole thing is great.