Regulation is a necessity in today’s market. Although there are many benefits to less regulation, in certain industries government regulation is a necessary component to creating a market that operates smoothly. With that being said, regulations can also go overboard in developing various rules to oversee an industry.
Taking a look at the McLaughlin-Sherouse List of regulated industries, clearly regulatory bodies are operating in excess, causing a slowdown of economic production. According to a study published in the Journal of Economic Growth, “the buildup of regulation has slowed economic growth by an average of 2 percentage points.” This is huge when considering that many of these industries are worth trillions in combined spend and economic activity. The ultimate limiting factor is something that, under a Trump administration, needs to be reassessed immediately.
The McLaughlin-Sherouse List of regulated industries, was created with the help of the database RegData which “allows one to calculate which industries are most heavily regulated.” As seen in the listing above, petroleum and coal products, electronic power generation, transmission, distribution, and motor vehicle manufacturing have over 60 thousand regulation restrictions combined. The biggest oddity is the Fishing industry which has over 13 thousand regulations in its market.
While I am sure there is a reason for the multiple rules, I think we can all agree the amount of restrictions has gone completely overboard and action must be taken to streamline all industries processes. Updates rules and less government oversight is necessary to help businesses within these markets to further American economic development.