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Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
Regulatoryconference Yandle
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Regulatoryconference Yandle

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  • 1. 21 st Century Regulation: Discovering Better Solutions for Enduring Problems Why now? Bruce Yandle Distinguished Adjunct Professor of Economics [email_address]
  • 2. Federal Register Pages: 1940-2007
  • 3. Federal Register Pages per $Billion Real GDP 1940-2007
  • 4. Federal Register Pages per $Billion Real GDP 1940-2007 The 1970s’ imprint.
  • 5. The 1970s <ul><li>Heydays for major environmental, food, safety, and consumer statutes that called for technology-based, command-and-control regulation </li></ul><ul><li>A time when the U.S. economy was characterized by large smokestack industries, young and inexperienced workers, and managements with limited experience in dealing with complex environmental risks </li></ul><ul><li>A time when U.S. industry led the world, with significant but still limited international competition in domestic markets </li></ul><ul><li>Economic pressures affecting internal growth predicted a “race to the bottom” for U.S. developing regions </li></ul><ul><li>Regulation provided opportunities for cartelization while satisfying demand for risk reduction. Centralized, “one suits fits all” regulation was the order of the day </li></ul>
  • 6. What’s changed? <ul><li>In 1970, per capita GDP was $18,391 (2000 chained dollars). In 2007, $38,475. </li></ul><ul><li>“ Race to the top” has replaced “race to the bottom.” </li></ul><ul><li>In 1970, 205 million people in the U.S. Now, 305 million. </li></ul><ul><li>In 1970, 11% of the over-25 population had a bachelor’s degree. Now, 28.7%. Better informed, higher valued human capital. </li></ul><ul><li>30 years of state and corporate experience in dealing with risk management…and deeply engrained regulatory habits. </li></ul><ul><li>Intense, global competition. </li></ul>
  • 7. <ul><li>More of us. </li></ul><ul><li>Better educated. </li></ul><ul><li>Better connected to information. </li></ul><ul><li>Wealthier & Older. </li></ul><ul><li>Firms competing in global markets. </li></ul><ul><li>How does this affect the demand and supply of regulation? </li></ul>Where are we?
  • 8. An Information Revolution Occurred after 1970. So what?
  • 9.  
  • 10. MICROSOFT in 1978
  • 11. Wikipedia in 2007
  • 12. Meet the Innovators’ Dilemma Clayton Christensen. The Innovators’ Dilemma. Harvard Business School Press, 1997 .
  • 13. Totem of Human Talents Source: Michael Cox. Federal Reserve Bank of Dallas Human Connectivity Creativity Analytical Reasoning Formulaic Intelligence Manual Dexterity Brute Force
  • 14. Let’s talk about where people work! And how that has changed.
  • 15. U.S. Sector Employment: 1970
  • 16. U.S. Sector Employment: 2007
  • 17. Knowledge-Intensive Manufacturing So what?
  • 18. U.S. GDP by Product Group 1970-2006
  • 19. The Changing Industrial Scene From 1970s Smokestacks to 21 st Century Knowledge Economy
  • 20. U.S. Industrial Production Index 1919-6/2008
  • 21. Production-Based Industry Rankings Source: Economic Report of the President, 2005, and Federal Reserve Board. 1972 1980 1990 2000 2004 2007 Iron/Steel Iron/Steel Printing Comp/Elec Comp/Elec Comp/Elec Apparel Apparel Apparel Autos Autos Aircraft Machinery Paper Plast/Rubber Food Food Food Food Fab. Metal Food Fab. Metal Chemicals Plast/Rubber Paper Paper Chemicals Machinery Iron/Steel Fab. Metal Fab. Metal Food Iron/Steel Plast/Rubber Plast/Rubber Elec. Mchry. Chemicals Chemicals Fab. Metal Chemicals Machinery Printing Autos Printing Machinery Printing Fab. Metal Chemicals Printing Autos Plast/Rubber Paper Paper Iron/Steel Plast/Rubber Plast/Rubber Autos Iron/Steel Printing Nonmetal minerals
  • 22. Are all the jobs going to China?
  • 23. Percentage Change in Manufacturing Employment 1992-2003 Data for The Netherlands and China for 1990-2002 Source: W.A. Ward, Manufacturing Productivity and the Shifting U.S., China, and Global Job Scenes, 1990-2005. Center for International Trade, Clemson University, Clemson, SC.
  • 24. Globalization So what?
  • 25. Growth in Global Markets Changes Rent-seeking Behavior & Places U.S. Regulators in Head-to-Head International Competition
  • 26.  
  • 27. Racing to the Top but Struggling with the Bottom So what?
  • 28.  
  • 29. Race to the top .
  • 30. <ul><li>The same set of countries was examined over the period 1960-1980. </li></ul><ul><li>Over the period 1960-1980: emissions increased with income. No evidence of EKC. </li></ul><ul><li>Over the period 1984-2002: evidence of EKC. </li></ul>Source: Kuheli Dutt, doctoral student, Northeastern University, Boston, MA
  • 31.  
  • 32.  
  • 33. <ul><li>Federal regulatory agencies are mature, experienced, and sophisticated. </li></ul><ul><li>States and cities have in place sophisticated regulatory infrastructure. </li></ul><ul><li>Huge risk-reduction strides have been made. </li></ul><ul><li>The U.S. is generally cleaner and safer. Natural areas are better protected. </li></ul><ul><li>We are in a race to the top. </li></ul><ul><li>Information and monitoring costs have plummeted. </li></ul><ul><li>Interest groups are results oriented. </li></ul><ul><li>Industries seek competitiveness and harmonization of standards. </li></ul><ul><li>The search is on for more effective, lower cost, outcome-based regulation. </li></ul>
  • 34. Today’s Plan There are many ideas in today’s papers. But, alas, we must ration. <ul><li>Five Key Ideas </li></ul><ul><li>Use performance-based regulation. </li></ul><ul><li>Require congressional review of significant regulations with requirement that offsetting saving be found. </li></ul><ul><li>Set priorities for regulatory instruments. Least restrictive first. </li></ul><ul><li>Treat risk from new technologies the same as risk from existing technologies. </li></ul><ul><li>Encourage private market alternatives before moving to regulation. </li></ul>
  • 35. Three Panels <ul><li>Panel One: Procedural changes that facilitate improved outcomes </li></ul><ul><li>Panel Two: Solutions that fall outside traditional regulation </li></ul><ul><li>Panel Three: A discussion with journalists led by Tyler Cowen </li></ul>
  • 36. 21 st Century Regulation: Discovering Better Solutions for Enduring Problems Why now? Bruce Yandle Distinguished Adjunct Professor of Economics [email_address]

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