Free Market Road Show 2013 | Richard Rahn

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AEC, KI a INESS v spolupráci s ďalšími partnermi organizovali medzinárodnú
konferenciu v rámci Free Market Road Show 2013 na tému Šetriť alebo
nešetriť: Zachránia Európu len úsporné opatrenia?, ktorá sa konala dňa 7.
júna 2013 v Bratislave. Ďalšie súvisiace informácie nájdete na
www.konzervativizmus.sk


AEC, in cooperation with the Conservative Institute and INESS, and in
association with international partners organized the Free Market Road
Show 2013 in Bratislava on June 7, 2013. More information at
www.institute.sk.

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Free Market Road Show 2013 | Richard Rahn

  1. 1. REGULATIONS andECONOMIC GROWTHPresentation by Richard W. RahnFree Market Road ShowJune 2013
  2. 2. A great Peter Drucker quote"The need to slough off the outworn oldto make possible the productive new isuniversal. It is reasonably certain thatwe would still have stagecoaches-nationalized, to be sure, heavilysubsidized, and with a fantastic researchprogram to retrain the horse- had therebeen ministries of transportation around1825."Source: The Effective Executive, p. 108.
  3. 3. Regulation is a TaxGovernments useregulations as a form of tax
  4. 4. Cost of Regulations in the U.S. • Total costs for Americans to comply with federal regulations reached $1.806trillion in 2012. For the first time, this amounts to more than half of total federalspending. It is more than the GDPs of Canada or Mexico. • This is the 20th anniversary of Ten Thousand Commandments. In the 20 yearsof publication, 81,883 final rules have been issued. That’s more than 3,500 peryear or about nine per day. • The Anti-Democracy Index – the ratio of regulations issued to laws passed byCongress and signed by the president – stood at 29 for 2012. That’s 127 newlaws and 3,708 new rules – or a new rule every 2 ½ hours. • Regulatory costs amount to $14,678 per family – 23 percent of the averagehousehold income of $63,685 and 30 percent of the expenditure budget of$49,705 and more than receipts from corporate and personal income taxescombined. • Combined with $3.53 trillion in federal spending, Washington’s share of theeconomy now reaches 34.4 percent.Source: Ten Thousand Commandments 2013, An Annual Snapshot of the Federal Regulatory State, Competitive EnterpriseInstitute
  5. 5. Cost-Benefit Analysis ofRegulations Measuring cost of regulations Measuring cost of benefits
  6. 6. Public Choice Theory & Regulations Regulatory agencies and those who writeregulations have incentives to produce moreregulations to protect their jobs Regulations increase power of political classover the citizens Unholy alliance between the compliancedepartments of the regulated institutions andthe regulators
  7. 7. How Regulations Lead to MoreDisasters Increasing systemic riskse.g., Basel Committee on BankingSupervision
  8. 8. The Growth of International Regulatorsand Big-State Imperialism Financial regulations (OECD, FATF,BIS) Environmental regulations
  9. 9. Corrective Actions All regulations should have anexpiration date Regulations should be imposed onlyafter a solid cost-benefit analysis Affected parties should have the rightto challenge any regulation on cost-benefit grounds
  10. 10. Deregulation Success Stories Massive transportation deregulation(elimination of the Civil Aeronautics Boardin 1984 and of the Interstate CommerceCommission in 1995) Telecommunication deregulation forwireless spectrum (now auctioning) Anti-trust (plaintiffs win more lawsuits thangovernment)
  11. 11. United States’ Position as Amicus in PrivateAnti-Trust Cases67%45%9%33%44%55%91%56%0%20%40%60%80%100%1967-1976 (26) 1977-1986 (31) 1987-1996 (13) 1997-2006 (13)Decade (# of cases)Plaintiff (%) Defendant (%)
  12. 12. Percentage of Supreme Court DecisionsCiting Law & Economics Works30%78% 77%60%0%20%40%60%80%100%1967-1976 (44) 1977-1986 (42) 1987-1996 (18) 1997-2006 (13)Decade (# of cases)Decisions citingLaw & Economicswork / Total cases(works by PhillipAreeda, WardBowman, RobertBork, and RichardPosner)

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