A theory to defining risk proposed by Dr Peter Sandman suggests that risk actually has three components, with the following relationship:

Risk = hazard (likelihood x consequences) + outrage factor

Sandman suggests that the public is preoccupied far more with outrage than with hazard. Australian governments tend to react to public outrage. These observations have two direct corollaries.

The first corollary is that the public may be outraged by something which is in fact a relatively low risk in terms of likelihood and consequences.

According to Sandman's theory, public outrage actually raises the assessed level of risk associated with an activity, regardless of the results of any 'real' or factual risk assessment. This phenomenon can be seen in action whenever some relatively rare, but spectacular disaster occurs. For example, shark attacks in South Australia and Western Australia generated a public reaction which experts describe as out of proportion to the real risk of being attacked by a shark.

A major responsibility of a public sector risk manager therefore is to work to decrease public outrage about modest hazards so that people are less likely to overestimate and over react to these small hazards. Success in this approach means that limited government resources can be allocated to managing genuinely risky activities, rather than matters which generate the most public outrage.

The second corollary is that the public fail to be outraged by something that is actually a very serious risk indeed, and the lack of outrage can lead to a lack of interest in addressing what is in fact a real risk.

Factors causing public outrage

Some of the factors that have been found to contribute to a feeling of public outrage associated with risks include:

• Lack of control from the victim's perspective. Consider the difference in risk you associate with driving a car in comparison with that of being a passenger.
• Volunteer vs coerced? Consider the difference between getting thrown into a huge roiling body of water infested with dangerous marine creatures and deciding to go for a body surf.
• Natural hazard vs man-made hazard? Natural hazards tend to be less outrage provoking than man-made hazards. Consider public reactions to a terrorist attack as compared to a cyclone.
• Familiar risk vs exotic risk. The risk of dying from asthma is actually much higher than the risk of dying from legionnaires' disease in Australia, but the legionnaires' disease attracts much more attention and outrage.
• Chronic vs catastrophic. The more frequently a risk occurs, the less outrage it will provoke. Road toll losses are chronic, airline crashes are catastrophic. Heart disease is chronic, AIDS is catastrophic.
• Sense of cover up or lack of open, fair process. There are may famous examples of this principle to be found in public and political affairs.
• Risks that are hard for the average person to understand, or where evidence is contradictory, will tend to provoke outrage - e.g. the question of whether mobile phones cause brain tumours.
• Dread factor - e.g. cancer, child pornography, nuclear waste, bad treatment of the frail aged are dreaded but emphysema is less so, even though it is probably more common.
• How memorable is the occurrence? Consider that a plane crash involving Australians is more memorable than any number of car crashes.
• Trust for the perpetrator – if the perpetrator should be trustworthy, we are more outraged if that trust is broken. Consider how the public is outraged by a breach of trust by a doctor or priest as opposed to a politician or journalist. Abuses of trust have led to a general decline of deference to people in positions or occupations of authority.
• Personal risk taking profile will determine how outraged a person feels by an occurrence. Consider the importance of personal risk taking profile to your reaction to the death of Australians in the Swiss canyoning flood, a skydiving accident or a car accident.
• Sense of fairness about sharing costs and benefits. When people are asked to take all the potential costs of a risk on trust, without a share in the benefits, they tend to become outraged. Consider for example the outrage generated by a company's desire to locate a mobile phone transmitter in your back yard because this will improve reception for people driving by and increase the company's profitability.
• The distribution of risks. People tend to be more outraged by the death of a small number of local fire fighters than by the loss of thousands of lives in a flood in India.
• A sense that there are rules that apply to some sectors of society, which do not apply to other sectors - e.g. allegations that police officers are allowed to break road rules without penalty, even when not performing their duties.
• Morality. Society sometimes decides that things are evil in their own right, whether or not the evidence shows that they are actually harmful - e.g. violent videos. In these cases, talking about rational cost/benefit tradeoffs sounds very callous.

Sandman's definition is particularly relevant to the provision of most government services. It is equally important to understanding and managing the potential for outrage associated with:

• decisions about the competitive tendering or outsourcing of government functions
• issues of equity of access to government funding and resources
• matters of transparency, consistency and equity in government processes
• avoiding conflict of interest, both real and perceived
• being accountable for the achievement of results, proper process, public sector probity and the safeguarding of taxpayer's funds
• matters of public interest and perception

Governments typically have a strong desire to avoid negative public reaction to their policies, decisions and actions. Taxpayers also have a legitimate interest in seeing publicly funded activities performed in a way which minimises the risk to which both taxpayer's funds and the recipients of services are exposed.

Taxpayers and governments are also increasingly interested in seeking out and maximising opportunities associated with creative approaches to service delivery and project management. These opportunities must be balanced against any associated risks – with outrage being one of the larger risks faced by governments whenever innovative approaches are adopted.

The application of Sandman's theory is demonstrated in the rabbit calicivirus case study.

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