Regulatory Studies Program

Regulatory Studies Program

The Regulatory Studies Program works to improve the state of knowledge about regulations and their effects on society. The program identifies market-based solutions that achieve regulatory goals, improving the overall performance of the regulatory process, and acts as a resource to scholars and students who share the goal of improving regulatory policy.

Research

Bentley Coffey, Patrick McLaughlin, Pietro Peretto | Apr 26, 2016
The impact of regulation on economic growth has been widely studied, but most research has focused on a narrow set of regulations, industries, or both. In order to better understand the cumulative cost of regulation, a comprehensive look at all regulations across many industries over a long period of time is imperative.
Eric Sun, Kelly Ferguson | Apr 20, 2016
In 2002, Congress passed the Medical Device User Fee and Modernization Act, with the aim of pushing the FDA to speed up the approval process for medical devices. This law levied large user fees on medical device manufacturers in exchange for the promise of shorter review times by the FDA. Whether the act has resulted in shorter review times has been unclear. This study conducted a regression analysis to address this question, using data on FDA review times for devices seeking approval between 1991 and 2012.
Donald J. Boudreaux, Liya Palagashvili | Apr 04, 2016
This paper examines the US Department of Labor’s proposed regulation to extend overtime pay to employees with base salaries of $23,660 to $50,440. While the Department of Labor claims that this change will encourage additional hiring, improve the well-being of employees, and lead to higher paychecks, economic theory and empirical evidence suggest otherwise.
Art Fraas, Randall Lutter, Zachary Porter, Alexander Wallace | Mar 28, 2016
Several federal benefit-cost analyses report an energy paradox among firms in competitive markets and conclude that firms would benefit from mandates to increase the use of energy-saving technologies. The Environmental Protection Agency, for example, presumes that owners of trailers pulled by tractors belonging to others underinvest in energy-saving technologies because trailer owners incur the costs while tractor owners get the benefits. Such findings appear incompatible with neoclassical views that private firms in competitive markets minimize costs.
Jerry Ellig, James Broughel, Spencer Bell | Mar 09, 2016
For more than three decades, presidents have required executive branch regulatory agencies to identify the systemic problems they wish to solve when issuing major regulatory actions. The first principle in Executive Order 12866, which governs executive branch regulatory review, is that an agency shall “identify the problem that it intends to address (including, where applicable, the failures of private markets or public institutions that warrant new agency action) as well as assess the significance of that problem.” This principle reflects the sensible notion that before proposing regulation, regulators should understand the root cause of the problem the proposed regulation is supposed to solve.
Dustin Chambers, Courtney A. Collins | Feb 23, 2016
This study examines the relationship between regulatory expansion and higher prices and asks whether those price increases have a disproportionately negative effect on low-income households. Our results suggest that the poorest households spend a larger proportion of their income on goods that are heavily regulated and subject to both high and volatile prices.

Testimony & Comments

Richard Williams, Michael L. Marlow, Edward Archer | Apr 12, 2016
The case examined here is the package of regulations that met the initial legal requirements provided by the Nutrition Labeling and Education Act of 1990 (NLEA, Public Law 101-535). This act gave the FDA the authority to require nutrition labeling of most foods regulated by the Agency and to require that all nutrient content claims (e.g., “high fiber” or “low fat”) and health claims be consistent with agency regulations.
Richard Williams | Mar 15, 2016
This small agency, established in 1980 by President Carter to “regulate the regulators” and to give “OMB final word on many of the regulations issued by our government,” has largely failed to achieve either goal. The myth persists that OIRA is a “little-known but extraordinarily powerful” agency that has been a “bottleneck” for protective regulations. The data, however, simply do not support this notion.
Jerry Ellig | Jan 12, 2016
Virtually all states require auto manufacturers to sell new vehicles through local franchised dealers, protect dealers from competition in Relevant Market Areas, and terminate franchises with existing dealers only after proving they have a “good cause” to do so. In 1979, fewer than half of all states regulated all three of these aspects of the manufacturer-dealer relationship. By 2014, all but one state regulated every single one of these aspects. These state laws harm consumers by insulating dealers from competition and forestalling experimentation with new business models for auto retailing in the twenty-first century.
Henry Wray | Dec 10, 2015
The outstanding work of the GAO and agency IGs has never been more important than it is today given the massive financial and performance challenges facing the federal government. I commend the subcommittee for its efforts to ensure that this work gets the attention and action it deserves so that it can achieve maximum impact. I would be happy to provide any further assistance that might be useful to these efforts.
Jerry Ellig | Dec 09, 2015
Citizens expect federal regulation to accomplish a lot of important things, such as protecting us from financial fraudsters, preventing workplace injuries, preserving clean air, and deterring terrorist attacks. Regulation also requires sacrifices; there is no free lunch. Depending on the regulation, consumers may pay more, workers may receive less, our retirement savings may grow more slowly due to reduced corporate profits, and we may have less privacy or less personal freedom. Given the important values at stake, Congress and regulatory agencies should craft regulations with full knowledge of their results. Decision-making in the dark should not be an option.
Jerry Ellig | Dec 09, 2015
The first fundamental question for policymakers in this area is defining the policy goal. I believe the appropriate goal of competition policy related to online platforms should be the promotion of consumer welfare—a concept rigorously defined in the economics literature. Consumer welfare is maximized when every unit of every resource is employed in the use that consumers value most highly. Competition policy agencies in the United States typically regard consumer welfare as the sole goal of competition policy. Even if policymakers choose to pursue goals other than consumer welfare, they need to understand the impact of policies on consumer welfare so they can act with full information of the relevant tradeoffs.

Research Summaries & Toolkits

Speeches & Presentations

Jerry Ellig | Jun 20, 2015
In June 2015, the National Academy of Sciences’ Transportation Research Board issued a report with recommendations to update and modernize economic regulation of rail freight transportation. Jerry Ellig served as a member of the committee that prepared the report. This presentation, given to the National Industrial Transportation League’s Railroad Transportation Committee in November 2015, summarizes the report’s main recommendations.
Jerry Ellig | Mar 20, 2014
Jerry Ellig's presents arguments for improved regulatory impact analysis at the College of Charleston.
James Broughel | Jan 30, 2014
Members of the Science Advisory Board (SAB), thank you for taking the time to hear to my comments this morning. Today’s topic—how to measure the impact of Environmental Protection Agency (EPA) regulations on low-income and minority citizens in the United States—is both timely and important. At the research center where I work, we have begun to explore the consequences of regulations on vulnerable populations. I appreciate the opportunity to share some of our findings and to contribute to this important discussion.
Richard Williams | Jul 08, 2012
The United States system of ensuring food safety (FS) is more than 100 years old and, until very recently, was the primary system designed to ensure FS. The system assumes that primarily federal regulators have the necessary knowledge to instruct food manufacturers on producing safe food, with both federal and state governments enforcing their respective regulations. While there have been notable successes in the last century — such as mandatory pasteurization for milk and other products, low acid canned food rules, and basic sanitation requirements — much of this progress was achieved in the first half of the 20th century. In the last 30 years, the incidence of foodborne disease has changed very little.
Jerry Ellig | Jan 14, 2010
Jerry Ellig participated in panel discussion before Texas policy makers in Austin, Texas at the Texas Public Policy Foundation's Policy Orientation on the future of the Texas Public Utility…
Jerry Ellig | Nov 05, 2009
Jerry Ellig was invited to give a lecture at Pepperdine University about the future of regulations in the federal government.

Mercatus Regulatory Studies


Charts

Patrick McLaughlin | Apr 26, 2016
Compared to a scenario where regulations are held constant at levels observed in 1980, the study finds that the difference between the economy we are in and a hypothetical economy where regulatory accumulation halted in 1980 is approximately $4 trillion.

Experts

Videos

| November 16, 2015
Can financial crises and other disasters be prevented? What was the role of the Federal Reserve, regulation, and risk in past crises? In the pursuit of safety, are we creating the conditions for the next? Wall Street Journal chief economics commentator Greg Ip and a panel of experts convened to discuss themes of the new book, Foolproof: Why Safety Can be Dangerous and How Danger Makes Us Safe.

Podcasts

Laura Jones | December 01, 2015
The Red Tape Reduction Act, which requires the Canadian government to remove a regulation for everyone that it adds, has been great for businesses. Laura Jones talks about the various benefits of this legislation on WJR’s Frank Beckmann Show.

Recent Events

Jerry Ellig, Ted Gayer, Keith Hall, John Leeth, Patrick McLaughlin, Matthew Mitchell, Hester Peirce, Richard Williams, | November 13, 2012
Please join the Mercatus Center at George Mason University for a series of discussions grounded in academic research and practical experience on how and why the current regulatory process falls short of its purpose—and what can be done to improve regulation in the future.

Books

Jerry Brito, Andrea Castillo | Jan 23, 2014
Como la primera moneda digital descentralizada del mundo, Bitcoin tiene el potencial de revolucionar los sistemas de pago en línea de una manera que beneficia a los consumidores y las empresas. En lugar de utilizar un intermediario, como PayPal, o entregar información de tarjeta de crédito a un tercer partido para su verificación—ya que los dos incluyen cargos de transacción y otras restricciones— Bitcoin permite que los individuos paguen directamente entre sí para bienes o servicios.
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