NC State Ag Economist Dr. Mike Walden – “The Cost of Regulations”
Mary: I’m Mary Walden with economist MW welcoming you to the economic perspective. Today’s program looks at the cost of regulations. Mike, one of the stated goals of the new Trump Administration is to reduce the costs of regulations, arguing that one result will be faster economic growth. Do we have any information indicating this would work?
Mike: Summary Answer
- Purpose of most regulations is to ensure safety, for example – safety of the public and safety of the environment
- But two costs to businesses – costs of compliance, and costs associated with no making some investments due to the regulations
- Have a new study from George Mason University which tried to quantify these costs
- Using a massive data set over several decades, researchers concluded regulations have slowed annual economic growth by 0.8% points since 1980
- Significant because annual economic growth historically has been near 3% annually and closer to only 2% recently
- Researchers also estimated GDP would be 25% higher today if no new regulations had been added since 1980
- Question: are the benefits of the regulations worth these costs
- I’m MW
Mary: And I’m Mary Walden for the North Carolina Cooperative Extension Service.