Government and Business – SAGE Business Researcher

Is there a way to resolve regulatory tensions?

Executive Summary

Government regulations touch nearly every aspect of the American economy, from advertising to employment, privacy, safety, health and the environment. About 300,000 full-time government workers are involved in the regulatory system, and agencies issue more than 3,000 federal regulations annually. States and municipal governments, meanwhile, issue their own regulations that they tailor to local conditions. Critics complain that all these rules dampen economic activity, raise industry expenses and cost workers' jobs. Defenders say that the benefits to society outweigh the costs. Critics have another complaint, too: The regulatory system has not kept up with the times. Experts say multiple challenges remain if the federal regulatory system is to improve. One of the biggest is how to properly assess regulations after they go into effect, a process known as “retrospective review.”

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Resources

Bibliography

Books

Coglianese, Cary, ed., “Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation,” University of Pennsylvania Press, 2012. Numerous academics explore the state of the U.S. regulatory system and suggest ways to improve it.

Drutman, Lee, “The Business of America Is Lobbying: How Corporations Became More Politicized and Politics Became More Corporate,” Oxford University Press, 2015. A senior fellow at the New America Foundation think tank studies the influence of companies' political contributions to lawmakers.

Marlow, Michael L., “The Myth of Fair and Efficient Government: Why the Government You Want Is Not the Government You Get,” Praeger, 2011. A California Polytechnic State University economist, who is also a senior scholar at George Mason University's Mercatus Center, argues that private markets are superior to government in naturally producing efficient outcomes.

Smith, Hedrick, “Who Stole the American Dream?” Random House, 2012. A Pulitzer Prize-winning journalist chronicles how business lobby groups became a force in American politics.

Sunstein, Cass R., “Simpler: The Future of Government,” Simon & Schuster, 2014. The former director of the federal Office of Information and Regulatory Affairs (OIRA), now a Harvard Law School professor, explains his views on governmental regulation of business.

Articles

Amy, Douglas J., “How Government is Good for Business,” GovernmentIsGood.com, undated, accessed May 26, 2015, http://tinyurl.com/k55ycpa. A politics professor at Mount Holyoke College explains why businesses should not reflexively fight regulation.

Coglianese, Cary, “An Easier Way to Untangle Regulatory Knots,” RegBlog, April 6, 2015, http://tinyurl.com/kb6fnro. The head of the University of Pennsylvania's Penn Program on Regulation discusses the Obama administration's recent efforts to rein in regulations.

De Rugy, Veronique, “The Best Regulator? That's Easy. It's the Market,” The Daily Beast, Oct. 16, 2014, http://tinyurl.com/qb534kl. A senior research fellow at George Mason University's Mercatus Center argues that secret tape recordings showing the Federal Reserve's reluctance to punish investment bank Goldman Sachs for suspected wrongdoing indicates that the market should police itself.

Donohue, Thomas J., “Tell the Truth on Regulations,” U.S. Chamber of Commerce blog, April 13, 2015, http://uscham.com/1KklBJb. The U.S. Chamber of Commerce's president and CEO accuses the Obama administration of inflating the benefits of proposed regulations.

Newport, Frank, “Few Americans Want More Government Regulation of Business,” Gallup.com, Sept. 14, 2014, http://bit.ly/1tXIwkM. As part of its annual survey on government, the polling firm finds that Americans' reluctant overall attitude toward regulating business has remained consistent in recent years.

Schor, Elana, and Andrew Restuccia, “‘Pipelines Blow Up and People Die,’” Politico, April 21, 2015, http://politi.co/1OaKnBv. Two journalists examine what critics call the overly accommodating attitude of the federal pipeline regulation agency toward pipeline companies.

Reports and Studies

“Quality Control: Federal Regulation Policy,” Council on Foreign Relations, March 2015, http://tinyurl.com/o5k5a59. In a report issued as part of its “Renewing America” initiative, the foreign policy think tank says the United States has lost ground to other nations in regulating business.

Carey, Maeve P., “Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register,” Congressional Research Service, Nov. 26, 2014, http://bit.ly/1LFoZz5. An analyst for Congress' research agency provides an overview of how the number of regulations published in the Federal Register has grown over time.

Lipsky, Michael, “Rulemaking as a Tool of Democracy,” Dēmos, Dec. 17, 2014, http://tinyurl.com/krbyby7. A distinguished senior fellow at a liberal think tank argues that debates over regulation focus too much on economic harm.

Wallach, Philip A., “An Opportune Moment for Regulatory Reform,” Brookings Institution, April 11, 2014, http://tinyurl.com/ozhhqau. A fellow in governance studies at the Brookings Institution explores ways in which the government regulatory process could be streamlined.

The Next Step

Effects on Economy

Devaney, Tim, “Republicans introduce bill to rein in regulators,” The Hill, Jan. 22, 2015, http://tinyurl.com/p626jwc. Sens. Rand Paul, R-Ky., and Todd Young, R-Ind., reintroduce legislation that would require all agencies to submit “major,” or economically significant, rules to Congress for approval before they can take effect.

Lieb, David A., “States Saying ‘No’ To Cities Seeking To Regulate Businesses,” The Associated Press, May 18, 2015, http://tinyurl.com/ppna7aq. Business leaders in a growing number of states are working with legislators to prevent cities from passing business-related laws, such as minimum wage increases, soda taxes and drilling restrictions.

MacDonald, Elizabeth, “Cost of Federal Regulation: $1.88 trillion,” Fox Business, May 13, 2015, http://tinyurl.com/mj2avpy. Federal and state regulations for business cost the U.S. economy nearly $1.9 trillion in 2014, according to a report by the libertarian Competitive Enterprise Institute.

Effects on Jobs

Goad, Benjamin, “GAO faults cost analyses for EPA regulations,” The Hill, Aug. 11, 2014, http://tinyurl.com/nfy7gyb The Environmental Protection Agency relied on outdated economic research to evaluate how seven proposed “major” regulations would affect employment levels, according to the independent Government Accountability Office.

O'Donoghue, Amy Joi, “End of an era: Mercury rule shutters Utah's oldest power plant,” The Deseret News, April 14, 2015, http://tinyurl.com/p4fown3. A new federal limit on mercury emissions has effectively shut down some of Utah's oldest power plants that cannot renovate their facilities, eliminating jobs in the process.

Strauss, Rebecca, “The US economy needs smarter regulations, not fewer,” Quartz, March 3, 2015, http://tinyurl.com/pp4xpgv. Claims that federal regulations eliminate jobs are overblown, because most new rules affect only employment in specific regions, argues the associate director of a project by the nonpartisan Council on Foreign Relations.

Europe

Ewing, Jack, “Eurozone Economy Is Improving, E.C.B. Chief Says, but Outlook Is Muted,” The New York Times, May 22, 2015, http://tinyurl.com/qez2tra. The president of the European Central Bank says the region's governments must change or remove regulations that restrict industry growth to boost their underachieving economies.

Fairless, Tom, and Sam Schechner, “EU Makes Play for Leverage Over E-Commerce,” The Wall Street Journal, May 6, 2015, http://tinyurl.com/lpayovu. European policymakers want to overhaul the European Union's complicated system of telecommunications, tax and copyright laws, which some say has stymied the growth of the continent's technology companies.

Rigby, Elizabeth, “Javid to continue business ‘red tape challenge’ with £10bn cuts,” Financial Times, May 19, 2015, http://tinyurl.com/qbvhu74. The new secretary of business for the United Kingdom is promising to save the country at least 10 billion pounds over the next five years by rolling back business regulations.

Business Lobbying

Mason, Melanie, “Silicon Valley increasing its lobbying in California's Capitol,” Los Angeles Times, Feb. 28, 2015, http://tinyurl.com/oh8sbmg. A number of Silicon Valley technology companies have ramped up their spending on lobbying to combat proposed bills that would impose new costs and restrictions on their businesses.

Pizzi, Michael, “For America's craft beer revolution, brewing battle has come to a head,” Al Jazeera America, Feb. 21, 2015, http://tinyurl.com/ophq8nr. Lobbyists representing the world's two largest beer conglomerates are dueling with lobbyists representing smaller breweries over federal bills to reduce excise taxes on beer, one of which would lower taxes for microbreweries.

Roberts, Deon, “Wells Fargo: No. 4 in assets, No. 1 in lobbying,” The Charlotte Observer, May 8, 2015, http://tinyurl.com/nq435na. The financial industry spent $1.4 billion from 2013 to 2014 to influence the writing of rules dealing with financial reform laws that impose higher capital savings requirements on major banks.

Organizations

Brookings Institution
1775 Massachusetts Ave., N.W., Washington, DC 20036
202-797-6000
www.brookings.edu
Centrist think tank that concentrates on government and public policy issues, including regulation.

Cato Institute
1000 Massachusetts Ave., N.W., Washington, DC 20001
202-842-0200
www.cato.org
Libertarian think tank that frequently examines regulatory policies.

Economic Policy Institute
1333 H St., N.W., Suite 300 (East Tower), Washington, DC 20005
202-775-8810
www.epi.org
Think tank that focuses on economic trends and issues affecting labor.

Mercatus Center
3434 Washington Blvd., 4th Floor, Arlington, VA 22201
800-815-5711
www.mercatus.org
Research center at George Mason University that takes a free-market-oriented approach to regulation.

Office of Information and Regulatory Affairs
725 17th St., N.W., Washington, DC 20503
202-395-3080
www.whitehouse.gov/omb/oira
Federal agency under the White House's Office of Management and Budget that coordinates and oversees the development of regulations.

Penn Program on Regulation
3400 Chestnut St., Philadelphia, PA 19104
215-898-6867
www.law.upenn.edu/institutes/regulation/
Think tank at the University of Pennsylvania Law School that conducts research on regulation policies.

U.S. Chamber of Commerce
1615 H St., N.W., Washington, DC 20062
202-659-6000
www.uschamber.com
The leading lobbying group for American businesses.

DOI: 10.1177/2374556815592625