Regulatory overkillBy BRETT KITTREDGE,
It would take the average person more than 13 weeks to wade through the 9.3 million words and 117,558 restrictions in Mississippi’s regulatory code.
This is according to an analysis from James Broughel and Jonathan Nelson at the Mercatus Center at George Mason University. They have taken a deep dive into the regulatory burdens of each state, including Mississippi.
What do regulations look like in Mississippi? In terms of government subdivisions, the biggest regulator, by far, is the Department of Health, with more than 20,000 regulations. That is followed by the Department of Human Services with over 12,000 regulations, and 10,000 plus regulations for state boards, commissions and examiners. The most regulated industries were ambulatory healthcare services, administrative and support services and mining (except oil and gas).
Overall, Mississippi was middle of the pack when it came to administrative regulations. It would take 31 weeks to read all 22.5 million words in the New York Codes, Rules and Regulations, which has 307,636 restrictions. But regardless of the state, there is generally one consistency – the number of regulations are only increasing.
Regulatory growth has a detrimental effect on economic growth. We now have a history of empirical data on the relationship between regulations and economic growth. A 2013 study in the Journal of Economic Growth estimates that federal regulations have slowed the U.S. growth rate by 2 percentage points a year, going back to 1949. A recent study by the Mercatus Center estimates that federal regulations have slowed growth by 0.8 percent since 1980. If we had imposed a cap on regulations in 1980, the economy would be $4 trillion larger, or about $13,000 per person. Real numbers, and real money, indeed.
On the international side, researchers at the World Bank have estimated that countries with a lighter regulatory touch grow 2.3 percentage points faster than countries with the most burdensome regulations. And yet another study, published by the Quarterly Journal of Economics, found that heavy regulation leads to more corruption, larger unofficial economies and less competition, with no improvement in public or private goods.
A prescription for lowering the regulatory burden on a state is the one-in-two-out rule, or a regulatory cap. In 2017, one of President Donald Trump’s first executive orders was to require at least two prior regulations to be identified for elimination for every new regulation issued. This is badly needed. We have gone from 400,000 federal regulations in 1970 to over 1.1 million today.
Many years ago, British Columbia took on a similar mission. And in less than two decades, their regulatory requirements have decreased by 48 percent. The result has been an economic revival for the Canadian province.
And one state has the unique ability to rewrite their book on regulations. This year, the state of Idaho essentially repealed their entire state code book when the legislature adjourned without renewing the regulations, something they are required to do each session because the state has an automatic sunset provision.
Now, the governor of Idaho is tasked with implementing an emergency regulation on any rule that should remain. The legislature will consider them next year. There are certainly needed regulations, just as there are unnecessary or outdated regulations that serve little purpose. But, the difference is, the burden on regulations now switches from the governor or legislature needing to justify why a regulation should to be removed to justifying why we need to keep a regulation.
Whether it’s a sunset provision or one-in-two-out policy, Mississippi should move in the direction toward a smaller regulatory state with more freedom. And if a regulation is truly important to our well-being, let the regulators prove why. In a state in need of economic growth, let’s find a way to remove unnecessary barriers and inhibitors.
Brett Kittredge is the Director of Marketing and Communications for Mississippi Center for Public Policy, the state’s non-partisan, free-market think tank.