Study: Regs slow industry growth

Less-regulated industries grow twice as fast as those that are heavily regulated, according to a study set for release Thursday.

The Mercatus Center at George Mason University, a pro-business research center, plans to release a report that shows the least-regulated industries grew by about 63 percent from 1997 to 2010, but the most-regulated industries grew by just 33 percent during that time.

“To the extent that government regulation decreases productivity, consumers suffer from paying higher prices than they otherwise would have had to pay,” writes the author of the study, Antony Davies, an associate economics professor at Duquesne University and a senior scholar at George Mason.

{mosads}The study found that some of the most-regulated industries include oil and gas extraction, mining, utilities, food manufacturing, and chemical manufacturing.

It reviewed data from the Bureau of Labor Statistics, and says that the least-regulated industries outperformed the most regulated industries in 12 of the 14 years of the study. 

On an annual basis, the most-regulated industries grew at a pace of 1.9 percent, while the least regulated industries grew by 3.5 percent on average.

The study also found that regulations can have an “immediate impact,” noting that industries which experienced an increase in rules saw a decline in efficiency during the following year.

The most heavily regulated industries also saw a 20 percent uptick in labor costs over the 14-year period.

However, the study also argued that regulations are necessary in some circumstances. 

“Where public health and safety are concerned, polls show a majority of Americans favor maintaining or strengthening current regulations on food production, environmental protection, car safety, workplace safety, and prescription drug safety,” Davies wrote.