New Paper Says Regulation Not Strangling the Economy

In a new paper, Alex Tabarrok and Nathan Goldschlag investigate whether heavyhanded government regulation has been responsible for a decline in dynamism in the American economy. They define dynamism about the way you’d expect: fewer startups, less job creation, aging firms, and weak productivity growth. Their approach is pretty simple: different sectors of the economy are regulated at different levels, so if regulation is at fault you’d expect to see a correlation between, say, regulation level and startup activity. But you don’t:

One paper doesn’t settle anything, of course, but this is basically an admission against interest since I doubt that Tabarrok wanted to come up with this answer. But he did. And as he notes, the paper got published in a good journal even though it’s a negative result. That’s good! Negative results should get published more often.

Needless to say, this doesn’t imply that regulation is good. It just says that regulation doesn’t seem to be responsible for reduced entrepreneurial activity or weak productivity growth. The answer lies somewhere else.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate