When it comes to spillover damages, the crucial question is how flexibility is balanced with compliance. Whether it is polluting the air we breathe and the water we use, or violating the speed limit and jumping a red light, endangering people's lives, regulatory efficiency ought not to be confused with policy compliance. The necessity for upfront regulation and compliance as well as independent monitoring and reporting is all too clear from disastrous experiences in developing and industrial countries — Volkswagen's emissions scandal exposed by the Environmental Protection Agency's due diligence being the latest example.