Cato Daily Podcast
Hard Data on States That Impose Big Regulatory Burdens
Sep 3, 2024
Patrick McLaughlin, a researcher at the Mercatus Center, dives into state-level regulatory burdens and their economic impacts. He introduces a new index that highlights inefficiencies in regulations, moving beyond traditional methods. McLaughlin compares states like heavily regulated California and New York with Idaho, which aims to attract business through lighter regulations. He underscores the significant effects of these regulations on job creation, poverty rates, and small businesses, advocating for thoughtful deregulatory efforts to enhance economic growth.
11:00
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Quick takeaways
- The traditional methods for measuring regulation inadequately capture its impact, prompting the creation of a new index that analyzes specific regulatory content.
- States with lower regulatory burdens often achieve better economic outcomes, highlighting the importance of strategic deregulation for job creation and growth.
Deep dives
The Challenge of Measuring Regulation
Measuring federal and state regulation presents significant challenges due to the inadequacy of traditional metrics, such as counting pages in the Federal Register. These crude measurements fail to adequately reflect the effectiveness or impact of regulations, as a short regulation can have a disproportionately large effect compared to lengthy, complex regulations. To address this issue, the development of a new index utilizing machine learning and natural language processing allows for a more nuanced analysis of regulatory content. This innovative approach counts specific prohibitions and obligations within regulations, leading to more accurate state rankings and insights about regulatory burdens.
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