by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Bentley Coffey, Patrick McLaughlin, and Pietro Peretto of the Mercatus Center at George Mason University place a price tag on American regulatory growth.
Economic growth in the United States has, on average, been slowed by 0.8 percent per year since 1980 owing to the cumulative effects of regulation. If regulation had been held constant at levels observed in 1980, the US economy would have been about 25 percent larger than it actually was as of 2012. This means that in 2012, the economy was $4 trillion smaller than it would have been in the absence of regulatory growth since 1980. This amounts to a loss of approximately $13,000 per capita, a significant amount of money for most American workers.
From the full report:
[R]egulations have a greater effect on the economy than analysis of a single rule in isolation can convey. The buildup of regulations over time leads to duplicative, obsolete, conflicting, and even contradictory rules, and the multiplicity of regulatory constraints complicates and distorts the decision-making processes of firms operating in the economy. Firms respond to both individual regulations and regulatory accumulation by altering their plans for research and development, for expansion, and for updating equipment and processes. Because of the important role innovation and productivity growth play in an economy, these distortions have consequences for the growth of the economy in the long run.
Economic growth in the United States has, on average, been slowed by 0.8 percent per year since 1980 owing to the cumulative effects of regulation: