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As of late 2020, the Trump administration had initiated almost one hundred rollbacks of U.S. environmental regulations. A careful assessment of the benefits and costs of rolling back an existing regulation can and should inform such decisions. When assessing the potential rollback of an existing regulation, analysts can often learn from the regulation’s implementation through retrospective analysis as well as from advances in scientific knowledge. We discuss recent actions concerning the Mercury and Air Toxics Standards (MATS) to illustrate the potential lessons from doing so. In the case of MATS, advances in science have shed light on broader exposure pathways and previously unquantified health effects, suggesting that the benefits of reducing mercury emissions may exceed previous estimates. At the same time, changes in the energy sector have altered the mix of fuels used to produce electricity, which impacts both the benefits and costs of the regulation.

The federal Administrative Procedure Act mandates published notice of proposed rulemaking, along with the provision that stakeholders and the public at large be given the opportunity to comment on significant proposed rules. In theory, federal rulemaking is improved by the solicitation and consideration of these comments. The airing of diverse opinions may be expected to promote healthy debate within the agency and between the agency and affected stakeholders, ranging from concerned citizens to multinational corporations. But how effective is the notice-and-comment process? This work seeks to answer that question qualitatively but systematically, by examining significant comments received by the Environmental Protection Agency in connection with the 2020 Policy Amendments to the New Source Performance Standards for the oil and natural gas sector. There is no doubt EPA invests substantial effort in responding to significant comments. Moreover, many of EPA’s judgments and decisions appear to have plausible legal foundations. However, for the issues we have investigated, arising in 2019-2020, the EPA generally seems unpersuaded by reasonable arguments and resistant to reasonable suggestions, even when these are advanced by diverse commenters. Sometimes, instead of dealing with these issues forthrightly, EPA ignores or evades them. A response that appears too often is that the issues can be taken up at an unspecified time in the future. Among other concerns, these observations raise the question of whether producing the 638-page Response to Public Comments constituted the best use of limited agency resources.

After the removal of geographic restrictions on branching in 2006, China’s city commercial banks (CCBs) can apply for permission to branch outside their province. This paper shows that CCBs report higher loan loss provisions before filing an application, thereby increasing the provision coverage ratio of nonperforming loans and making the bank look safer to regulators.Our finding is robust to controlling for possible endogeneity of the branching application decision by employing propensity score matching estimators, and it is confirmed when we consider a quasi-natural experiment of deregulation reversal.

Deregulation is a widely suggested strategy to make agricultural markets efficient. In this article, we critically examine the recent reforms undertaken in India aiming to deregulate agricultural markets. Our analysis is from the perspective of the potential of market reforms to benefit farmers. Relying on primary and secondary data for analysis, we draw three conclusions: (1) While reforms to agricultural marketing in the country are long overdue, the new farm laws in their current form are unlikely to result in any radical changes to majority farmers. (2) The provisions of the laws, when implemented, will weigh in favour of traders. This goes against the basic tenets of the introduction of the laws. (3) Even the regulated markets can generate favourable outcomes for farmers if farmer-oriented entities play dominant roles in them. We argue that deregulation in the absence of enabling pre-conditions are unlikely to generate favourable outcomes for farmers. Instead, they may even turn counterproductive.

The energy and power industry has seen significant growth across different countries because of increased demand for consumption and market conditions including deregulation. However, due to high level of complexities and uncertainties associated with a power plant’s operations, the management must tackle with risks that may negatively impact business’s overall growth and performance. In this regard, managing non-technical potential risks is as important as handling technical ones because non-technical risks may result in hindrances in the supply process of the power plant. In this paper, a risk management approach, Fuzzy Failure Mode and Effects Analysis, has been used to identify potential non-technical risks linked to a power station’s operations that should be dealt with high priority. This technique is an advanced approach of classical Failure Mode and Effect Analysis which incorporates a fuzzy system to reduce the chances of errors; and helps the management to avoid costly damages by timely responding to the potential risks and taking appropriate corrective actions

Previous research has focused on the economic effects of entrepreneurship, but little is known about how promoting entrepreneurship affects societies. Focusing on community crime as a key societal outcome, we posit that initiatives fostering new venture creation through lower barriers to entrepreneurship will reduce crime. The proposed mechanism responsible for this effect is the enhanced socio-economic integration of disadvantaged groups within the community. This mechanism is enabled through multiple channels: lowering the barriers to entrepreneurship improves labor market opportunities for disadvantaged groups as founders of their own firms and joiners of new startups, or, more indirectly, as new hires at incumbent firms. Leveraging employer-employee matched data from Portugal between 2002 and 2010 and an exogenous deregulation reform that significantly increased entrepreneurial activity, we find strong support for our theory. Reducing barriers to entrepreneurship reduces within-community crime, and this result is further amplified in communities with higher socio-economic exclusion figures. We find significant reductions in different types of crime, although the magnitude, timing, and persistence of the effects varies, which gives important insights into the different integration mechanisms at play.

The prime minister established a Taskforce on Innovation, Growth and Regulatory Reform (‘TIGRR’) in February 2021. Led by MPs Sir Iain Duncan Smith, Theresa Villiers and George Freeman, its remit was to ‘to scope out and propose options for how the UK can take advantage of our newfound regulatory freedoms to deliver these aims, as well as challenging the Government’s own emerging proposals’. The TIGGR received submissions from, or met, with more than 150 organisations and individuals. The IEA is publishing three of those contributions in this collection: the IEA’s own submission, drafted by Victoria Hewson, Head of Regulatory Affairs, and those of Sir Mark Boleat and Jon Moynihan OBE, two distinguished commentators who gave their personal view. The TIGGR published its report and recommendations on 16 June 2021. Its findings are wide-ranging and ambitious, and reflect some of the recommendations made by our authors. We are publishing this collection to inform the discussion about the TIGRR report and regulatory reform in general. The report and the three submissions illustrate the scale of the challenge to achieve the prime minister’s objectives of driving innovation, reducing barriers to entry and improving the regulatory environment for small businesses. They also show that there are myriad opportunities to make progress towards them. Sir Mark reflects on the structural reasons for the present regulatory burden, the need to address regulator accountability and the tendency of incumbent business, far from seeking deregulation, to favour ever greater regulation as a barrier to entry for potential competitors. Jon Moynihan reflects on the differences between common and civil law traditions, and the UK’s regulatory culture and incentives. He puts forward some key areas such as health care and financial services, where reforms could transform innovation and competitiveness. Victoria Hewson puts forward three examples of current regulations that could be reformed, one concerning industrial goods, one concerning digital services and one concerning employment law, and considered the benefits and trade offs that might result.

Among the ambitious aims of the Health and Care Bill is the removal of competition from the English NHS, thus cementing policy shifts towards integration. Controversies and misunderstandings surrounding the competition provisions of the Health and Social Care Act 2012 (HSCA 2012) suggest that new legislation may be welcomed without thorough scrutiny. Some controversy lies in the ‘juridification’ of public policy identified by Davies following the HSCA 2012 reforms. The prospect of new legislation suggests that analysis of ‘dejuridification’ could offer insights which may otherwise be overlooked. Certainly the Health and Care Bill takes a different approach to other attempts to repeal the HSCA 2012, the National Health Service (Amended Duties and Powers) Bill and the NHS Bill. The latter might be characterised as ‘demarketisation’, in contrast to the ‘deregulation’ implicit in the 2019 NHS Long Term Plan proposals which underpin the Health and Care Bill. The anticompetitive agreements prohibition and merger control are two aspects of the HSCA 2012 competition policy which can be perceived as capable of inhibiting the current move towards integration. This paper uses these provisions as lenses to evaluate how ‘juridification’ developed with the HSCA 2012 and subsequently, and to examine how ‘dejuridification’ may take effect. This offers insights – and a need for caution – as the Health and Care Bill progresses through the UK parliament in the 2021/2022 parliamentary session.

This study investigates firms’ reporting choices and ensuing capital market effects in response to the gradual deregulation of quarterly reporting in the prime market segment of the Vienna Stock Exchange (VSE). First, in November 2015, the VSE abandoned the mandate to prepare quarterly reports in compliance with International Accounting Standard (IAS) 34 Interim Financial Reporting. We observe that half of the prime market firms stop IAS 34 compliance until 2018, but do not experience any adverse effects on their stock liquidity. Second, in February 2019, the VSE completely terminated the quarterly reporting mandate. Only a few firms abandon quarterly reporting, but about half of firms reduce the scope (i.e., the content) of quarterly reports to varying degrees. We find that firms that terminate or reduce the scope of quarterly reporting the most, experience a significant decrease in stock liquidity. Taken together, our findings suggest that firms carefully trade off the economic benefits of discretionary presentation format, lower reporting frequency and scope against associated economic costs in the form of reduced liquidity.

When deciding whether to introduce market competition into a regulated industry, a regulator faces an important tradeoff. Market-based prices can provide incentives to allocate resources more efficiently and reduce costs, but the presence of market power may lead to increased markups. We use a detailed dataset on electricity transactions to investigate the impact of market-based deregulation in the context of the U.S. electricity sector. We find that the increase in markups dominates despite modest efficiency gains, leading to higher consumer prices. Deregulation does not necessarily reduce prices and improve consumer welfare. Thus, regulated prices may be preferred to market-based prices when firms are capable of exerting market power.

This paper provides a literature review of the impact of labour market trends on the working arrangements and employment of R&D personnel in the business and industrial sector. Current research positively considers the effects of labour market deregulation, flexibility, and digitalisation over R&D for enhancing business growth and containing labour costs. However, lacking are perspectives that problematise their impact on R&D personnel’s labour and working conditions. This paper argues that research is needed on these important dimensions, to assess their potential consequences over the R&D workforce and R&D activities.

The same capitalism vital to day-to-day wealth creation is even more important at grand scales in a modern technological society. A superior posture from which to boost infrastructure would entail separation of state and economics and a sidelining of the government-centric approach. A course correction is in order.

We study the magnitude and nature of racial disparities in the U.S. small business credit market. Exploiting a unique dataset containing rich loan contract information, including firm and lender characteristics, we document sizable racial differentials in small business lending, measured by loan denial rates and interest rates between black-owned businesses and otherwise observationally identical white-owned businesses. Such racial disparities are most pronounced in areas associated with severe racial bias against blacks. Critically, we show that an exogenous increase in bank competition due to bank deregulation has a quantitatively large effect in reducing racial disparities in small business lending, and such a reduction is primarily driven by entrant banks, as the Becker (1957) theory of racial prejudice predicts.

Present-day advocates of antitrust reform referred to as “New Brandeisians” have invoked history in pressing the case for change. The New Brandeisians bemoan the upending of a mid-twentieth-century “golden age” of antitrust by an intellectual movement known as the Chicago School. In fact, mid-twentieth-century enforcement of antitrust was uneven and large corporations exercised substantial market power. The Chicago School also was not as decisive an agent of change as the New Brandeisians suggest. Doubts about the efficacy of government regulation and concerns about foreign competition did much to foster the late twentieth-century counterrevolution that antitrust experienced.

This Article makes the case that pharmaceutical companies, along with other powerful corporate actors in the pharmaceutical industry, are in effect designing their own markets, often at the expense of, rather than in pursuit of, public health. The influence exerted by these corporate actors extends beyond traditional forms of regulatory capture, rising to what this Article refers to as pharmaceutical capture—a concept that encompasses the exercise of holistic and systemic control over the operation of pharmaceutical markets and their regulation. After developing a framework for thinking about pharmaceutical capture, this Article uses the evolution of the opioid epidemic as a case study of capture at work. It argues that the patterns of corporate influence highlighted in the case study are not unique to opioids, but rather are structural features of U.S. pharmaceutical markets. A popular political response to concerns about the power exerted by corporate actors in the pharmaceutical industry has been to pin the blame on government regulation as impeding the discipline of the “free market.” But pharmaceutical markets rely on government regulations to function, and this push for deregulation is in many cases simply an effort to substitute one governance structure for another more favorable to incumbent corporate interests. This Article concludes that it is not deregulation, but rather a redesign of regulation, that is needed to improve the public health impact of the pharmaceutical industry. Drawing lessons from pharmaceutical capture, it suggests guidelines for a regulatory recapture.

On 13 August 2020, the U.S. Environmental Protection Agency promulgated its final rule amending the New Source Performance Standards (NSPS) for the Oil and Natural Gas Sector. Both adherents and detractors of President Donald J. Trump saw the new rule as contributing to the President’s deregulatory agenda, taking an important step toward American dominance in fossil fuels (desirable or not), and winning yet another battle in the war on the environmental protection legacy of President Barack Obama. This simple story line is compelling, but when the details are examined, it is found that the changes were in some ways more important, and in other ways less important than advertised by supporters and opponents. Moreover, some of the changes have damaged positions Trump championed, while others have the potential to substantially improve the environmental performance of the oil and gas industry. Most importantly, some major sources of methane emissions have been inadequately dealt with across both administrations. Therefore the Biden administration EPA, in re-examining NSPS, should take care to discard the mistakes made by the Trump administration, retain the improvements, and move forward on a number of new fronts. Topics explored include redundancy of methane and volatile organic compound leak detection, regulation of older and low production facilities, abandoned wells, pneumatic controllers, oil storage tanks, routine flaring, malfunctioning and unlit flares, gathering pipelines, and EPA certification of new methane emission detection technology.

This study examines whether the increased availability of bank loans affects borrowers’ voluntary disclosures. Exploiting the staggered deregulation of interstate bank branching across states in the U.S., I find that bank-dependent firms decrease their voluntary disclosures following bank branching deregulation. This overall effect is muted for firms with higher information asymmetry in the public capital markets and higher litigation risk. Furthermore, the decline in voluntary disclosures is more pronounced among borrowers with higher proprietary information costs and stronger lending relationships with their lenders. Further analysis reveals that bank-dependent firms that stop issuing earnings guidance after branching deregulation experience decreased liquidity in the equity market. Overall, this paper sheds light on how regulatory changes in the banking sector have externalities on borrowers’ disclosure decisions.

The majority of U.S. households that qualify for federal rental housing assistance do not receive it. In the absence of an entitlement to housing assistance for all who qualify, an underexplored cause of the shortfall is that higher rents in some areas driven by supply-constraining local regulations drive up program costs, leaving fewer funds available to serve additional families. In this paper, we first show that because the federal government bears the full cost of any incremental increase in market rents in assisted housing units, stringent local regulations can substantially increase the federal cost of covering a fixed number of families. We then simulate the effect of deregulation that reduces home prices to the cost of producing a home in 11 substantially supply-constrained metropolitan areas, which we translate into reduced market rents and ultimately cost savings for federal rental housing assistance programs. We estimate that post-deregulation, the Housing Choice Voucher program and Section 8 Project-based assistance program could save a combined $3.9 billion, which could serve 13 percent (424,000) more families.

We exploit the staggered removal of a geography-based market friction—the adoption of interstate banking deregulation—to investigate whether banking market development can spill over to the functioning of the equity market, measured as stock market liquidity. Interstate banking deregulation prompted large, sophisticated, out-of-state banks to lend within deregulating states’ borders, potentially altering equity traders’ costs of screening and monitoring borrowers, gathering funds, and/or expectations about economic growth in deregulating states. We find that stock market liquidity increases following banking deregulation, especially for borrowers characterized by greater screening and monitoring costs. Overall, our findings suggest that banking development has positive spillover effects on the functioning of the equity market.

For-profit nursing homes came to dominate nursing-home care in the United States in the second half of the twentieth century, especially after the passage of Medicare and Medicaid legislation in the 1960s. However, for-profit nursing homes on average provided inferior care when compared to state-run and nonprofit nursing homes. Congress attempted to address the problems in nursing homes in the final decades of the twentieth century, but massive statutes and abundant regulations served mostly to legitimize the problematic for-profit nursing home. COVID-19 then tragically underscored the flaws in the legally sanctioned for-profit nursing home as a major socio-legal institution in American life.

In this article, we investigate the deregulation efforts resulting from the 2015 transposition of the EU’s Transparency Directive into German law and analyze whether a reduction in the minimum content requirements for quarterly reporting increases information asymmetries and decreases firm value. Using a novel dataset of firms that are listed on the Frankfurt Stock Exchange, our results reveal that over the period from 2012 to 2019, lower quarterly reporting levels on average have increased information asymmetry and reduced firm value. We find that this effect is stronger for second-tier stocks and firms with low media coverage. Our results are robust to potential selection effects regarding firms’ choice of quarterly reporting content levels.

Russian Abstract: Статья посвящена анализу реакции авиакомпаний-конкурентов на вход нового игрока на рынок. Данная проблема является актуальной в свете дискуссий вокруг методов стимулирования конкуренции на рынках пассажирских авиаперевозок. Решение назревших проблем в сфере гражданских авиаперевозок применительно к вопросам конкуренции требует переформатирования подходов отраслевой и антимонопольной политики. Перед регулятором стоит вопрос соблюдения баланса интересов авиакомпаний, поставщиков аэропортовых услуг и конечных потребителей – пассажиров. При этом необходимо определить направление реформирования – дерегулирование или государственное субсидирование. Данное исследование представляет собой попытку систематизации конкурентных стратегий, выбираемых авиаперевозчиками в ответ на изменение условий конкуренции. Результаты анализа могут иметь интерес с точки зрения построения прогнозов поведения авиакомпаний на разных маршрутах (рынках) при дерегулировании отрасли и увеличении числа конкурентов. English Abstract: The article is devoted to the analysis of the reaction of competing airlines to the entry of a new player into the market. This problem is relevant in the light of discussions around methods to stimulate competition in the passenger air transportation markets. Decision urgent problems in the field of civil air transportation in relation to competition issues require reformatting of approaches to industry and antitrust policies. The regulator is faced with the question of balancing the interests of airlines, airport service providers and end-users - passengers. In this case, it is necessary to determine the direction of reform - deregulation or state subsidies. This study is an attempt to systematize the competitive strategies chosen by air carriers in response to changing competition conditions. The results of the analysis may be of interest from the point of view of building forecasts of airline behavior on different routes (markets) with deregulation of the industry and an increase in the number of competitors.

This Article, written as part of a conference honoring Professor Richard Stewart on his 50 years as a legal academic, focuses on the inconsistent manner in which the Trump Administration has dealt with three of the most important conceptual issues that are central to the design of environmental policy: cost-benefit analysis, federalism, and the treatment of dirty, old sources of pollution. It has acted in a patently inconsistent way in different proceedings, embracing co-benefits in some cases and decrying their use in others; extolling the virtues of state decision-making in some cases and running roughshod over such decision-making in others; taking extreme actions to protect existing, dirty sources in some cases, and celebrating their replacement in others. The Trump Administration has simply taken whichever side of each of these arguments would advance its deregulatory policies. Though inconsistencies across different regulations — as opposed to inconsistencies within a single regulation — have not been a core concern of the Administrative Procedure Act, its prohibition on “arbitrary and capricious” agency action is sufficiently capacious to embrace egregious actions of this type.

This paper investigates the performance sensitivity of geographically diversified and non-diversified banks to local housing prices in the United States. We find that despite enduring the limitation of risk diversification, local banks experience a lower performance sensitivity to housing prices than their diversified counterparts. The difference in sensitivity between the two types of banks is pronounced in bear (but not in bull) housing markets. Further analysis shows that local banks better manage their loan quality, and diversified banks encourage more risk taking. The findings are robust to addressing the endogeneity problems of local housing markets and geographic diversification strategy of banks. Taken together, our findings highlight the local advantage of non-diversified banks and explain why they coexistent with diversified banks even after the consolidation waves following bank deregulation.

As every crisis, current COVID19 pandemic caused economic setback, brings not only heavy losses for all the countries, but opportunity to succeed also. The opportunity and success not require heavy governmental spending but termination of various practices harming both business climate and public morale. Deep deregulation and respect of freedom of contract, termination of violation of freedom of private choice under pretext of ‘fighting discrimination’ will benefit the courageous society and will pave the way for lasting prosperity.

Neoliberal political leaders such as Prime Minister Margaret Thatcher (1979-90) and President Ronald Reagan (1981-89) heralded entrepreneurs as capitalist heroes. Yet for the most part the policies they enacted did not help real entrepreneurs. Their ideology impaired their ability to promote entrepreneurship because they viewed support for entrepreneurs primarily in negative terms as the removal of government tax and regulatory burdens rather than in positive terms as the cultivation of a dynamic market infrastructure. This paper presents this argument in four steps, focusing on the U.S. case: 1) how neoliberal reforms embodied internal contradictions; 2) how reforms to market governance undermined entrepreneurship; 3) how other neoliberal policies also failed to support entrepreneurs; and 4) how policies that violated neoliberal principles, such as industry and technology policies, were actually more supportive of entrepreneurs.

This study gives a brief history of the evolution of the Nigerian economy from independence till date taking into account the several milestones towards actualization of a fully liberalized economy devoid of cartels, price fixing and unhealthy competition. Another important aspect of this article will be to dissect several economic policies that successive governments had deployed in Nigeria to ensure stability of the economy. Several economic terms like regulation, privatization, re-regulation, capitalization, indigenization, deregulation and competition are analyzed vis-a-vis the Nigerian economy. This work understudies the Nigerian economy as at today to decipher what economic models it has deployed to ensure a vibrant and robust economy. It places the newly passed competition law on a scale with the current regulatory strategy adopted by government in several sectors of the economy, forecasting its applicability to what is currently obtainable in the country. Bottlenecks and challenges that lie ahead are also identified and possible recommendations made using the experience of advanced economies in competition law.

Climate change is complex during the best of times. It is commonly conceptualized as the quintessential global collective action problem: it affects those who do not contribute to it while the benefits of climate change mitigation measures are not restricted to those who pursue such measures. This conceptualization illustrates the high transaction costs involved in domestic policies as well as in international agreements addressing climate change, and it is of academic and practical interest. As such, this article discusses the current challenges that climate change policies face, focusing on the linkages between the climate change policies of the Trump administration and the COVID-19 pandemic and on the effects of those linkages, both in the United States and globally. Specifically, this article addresses the Trump administration’s attacks on climate science and its deregulatory climate agenda as well as the United States withdrawal from the Paris Agreement on Climate Change. In addition, it discusses principles of international law and the challenges related to state liability for environmental harms in the context of the COVID-19 crisis. This article also assesses how the United States’ climate policies are likely to aggravate inequalities domestically as well as globally in the aftermath of the pandemic. This article offers several original contributions. First, it provides an unique assessment of how the deregulatory climate policies implemented nationally and internationally by the Trump administration have magnified the COVID-19 crisis. Second, the law and economics methodology used in this article validates the claim that improving environmental quality is connected to optimizing early regulatory action. Third, this article discusses the challenges of state liability for climate harms in the aftermath of the United States’ withdrawal from the Paris Agreement and concurrent COVID-19 pandemic. Finally, this article offers relevant insights for the literature on climate change that are likely to be applicable to critical future situations, whether they are health-related, global economic crisis, or climate-related emergencies. Ultimately, this article concludes that, in aggregate, all such climate change policies have contributed to increased pollution, including elevated greenhouse gas (GHG) emissions that have aggravated pre-pandemic inequalities embedded within the United States and among countries. Consequently, the domestic and international policy choices of the Trump administration are worsening the impact of the pandemic, particularly for those in more vulnerable positions, as well as indelibly poisoning the global commons.

We live in an era of widening geographic inequality. Around the country, the spread between economically and culturally thriving places and those that are struggling has been increasing. “Superstar” cities like New York, San Francisco, Boston, and Atlanta continue to attract talent and grow, while the economies of other cities and rural areas are left behind. Troublingly, escalating geographic inequality in the United States has arrived hand-in-hand with serious economic, social, and political problems. Areas that are left behind have not only failed to keep up with their thriving peers; in many ways they have stagnated and seen opportunities evaporate. At the same time, superstar cities are running up against extreme housing affordability problems, rendering middle-class life all but unsustainable. To make matters worse, the widening gulf between dynamic and stagnant places increasingly feeds into a democratic crisis of unrepresentative government at the federal level. The dominant explanations for widening geographic inequality focus largely on inexorable economic trends. Forces like “agglomeration effects” and globalization have reshaped the economy, benefitting some areas and harming others. We think these explanations leave out a crucial factor: the effects of specific regulatory choices on economic geography. The Progressive Era and New Deal regulatory order in the United States promoted geographic dispersion in economic activity. The unraveling of this regulatory order around 1980 coincided with the reversal in geographic convergence and the beginning of an era of growing divergence. More specifically, regulatory policies in the areas of transportation, communications, trade, and antitrust helped construct an era of geographic convergence in the mid-twentieth century and deregulation in those same areas contributed to the rise of geographic inequality over the last generation. To combat geographic inequality and its attendant downsides, we make the case for reincorporating geographic factors into federal regulatory policymaking in transportation, communications, trade, antitrust, and other domains.

We explore whether financial access explains persistent gender and racial imbalance in entrepreneurship. The 1979 NLSY overlaps with bank deregulation events between 1971 and 2001, permitting a difference in differences analysis of the propensity for young people to attempt entrepreneurship. We find that the movement away from local finance supported new entry by African American men into entrepreneurship, but not by women of any race. We show that financial access is an important determinant of the propensity of young adults to become entrepreneurs and provide new evidence about a mechanism through which the demographic gap in entrepreneurship might be closed.

Lockdown measures enacted across the US due to the Covid-19 pandemic have severely curtailed personal and economic liberty. Although a growing body of research estimates the benefits and costs of these restrictive measures, significantly less research examines the role of deregulation in expanding healthcare capacity. This paper examines the impact of the FDA and CDC's deregulation on Covid-19 testing. I find laboratories and test developers greatly expanded Covid-19 testing availability and expanded the variety of tests after deregulation occurred. My findings provide critical and timely implications for research in public health and pandemic response policy more broadly.

Arizona’s position as a leader in economic freedom has made it one of the United States’ most business-friendly states, resulting in a relatively sustained economic boom over the last 30 years. Post-recession success is at least partially due to the state’s deregulation and pro-technology development policies. Unfortunately, technology development in Arizona and across the country is often still stunted by a complicated, laborious web of federal regulations. Federal and state leaders can work cooperatively to lower regulatory barriers to innovation and supercharge the economy. Current Arizona Governor Doug Ducey’s administration has done an admirable job of encouraging legislation that addresses both these needs. One notable example is the Regulatory Sandbox—a pro-growth, pro-technology, and pro-competition program aimed at attracting increased out-of-state investment and high-paying technology jobs. The Sandbox enables an approved business limited access to the Arizona consumer market to test innovative FinTech and RegTech products and services without first having to obtain otherwise applicable authorizations to operate, such as a business license. This program promises to be an unparalleled opportunity for Arizona to help secure the state’s technological and financial future, while strengthening consumer safeguards and economic liberty. However, for the benefits of sandbox-like programs to be fully realized, federal agencies will need to participate in regulatory coordination with state agencies. This will require federal agencies to exercise their exemptive authority, to ensure Sandbox participants are not burdened by federal regulations that are redundant of exempted state regulations. If such coordination is achieved, innovation should truly flourish. This article describes how the Sandbox works, the reasons for its creation, why regulatory coordination is imperative to unlocking the Sandbox’s full innovation-generating potential, and the ways in which federal agencies can exercise their exemptive authority to facilitate this increased innovation and economic growth.

The Trump administration’s efforts to weaken regulations are in tension with cost-benefit analysis, which in many cases supports those regulations or otherwise fails to support the administration’s deregulatory objectives. Rather than attempting to justify its actions as a matter of policy preferences, the administration has responded by erecting procedural hurdles to new regulations, concocting flawed cost-benefit analyses, and interpreting statutes so as to evade cost-benefit analysis. We evaluate these efforts, and conclude that the procedural hurdles may well be an effective means for slowing down regulation but not for eliminating existing regulations; that courts are unlikely to approve deregulation based on flawed cost-benefit analyses; and (most importantly) that the statutory interpretation route — which we call “Chevronizing around cost-benefit analysis" — creates novel challenges for courts, as it pits traditional Chevron deference against a trend in favor of pushing agencies to regulate based on cost-benefit analysis.

Most politicians and international organisations advocate for increased regulation and government control of industry in order to handle climate change and reduce overall CO2 and greenhouse gas emissions. However, it remains an open question how economic freedom is associated with environmental damage and whether deregulation is harmful to the environment or incentivises the use of green technology. On one hand, more government control and regulation may force firms and individuals to reduce their emissions. On the other hand, more economic freedom is likely to enable innovation and the adoption of green technological development. In this paper, I therefore combine data on growth in CO2 emissions and GDP per capita with the Fraser Institute’s Economic Freedom of the World indices in order to test if economic freedom affects emissions. I do so in the context of estimating a standard Environmental Kuznets Curve in which economic freedom can both reduce overall levels as well as shift the shape of the curve. The results suggest that economic freedom reduces overall CO2 and greenhouse gas emissions but also shifts the top point of the Kuznets Curve to the left. Part of this effect may be due to the effect of economic freedom on the adoption of renewable energy.

An outdated statutory framework and legacy regulations in the United States have created a labyrinth that constrains the Federal Communications Commission from adequately responding to the impending disappearance of traditional voice telephony. This outdated telephone service is not even a shadow of its former self: the number of telephone lines in 2018 was the same as in 1950, despite the U.S. population more than doubling and the total number of voice-capable telecom connections exploding 700 percent over the same period. Yet this waning service remains under an intricate regulatory system involving federal and state authorities. There is but one way out of the labyrinth – comprehensive deregulation that immunizes against regulatory temptations – allowing the remaining service providers and their customers to manage the transition to a fully broadband world. Efforts to deregulate piecemeal are well intentioned and can help in certain contexts, but could also trip over legacy structures, resulting in worse outcomes for users and providers of traditional voice services.

We develop a two-sector growth model of vertical structure in which the upstream sector features Cournot competition and produces intermediate goods that are used in the downstream sector for the production of final goods. In such a vertical structure, we show that deregulation and increased market competition in the upstream sector does not only increase its own productivity, but also has a substantial spill-over effect on the productivity of the downstream sector through affecting factor prices. We calibrate the model to the Chinese economy and use the calibrated model to quantitatively evaluate the extent to which deregulation in the upstream market in China from 1998 to 2007 accounts for the rapid economic growth over the same period. Our quantitative experiments suggest that deregulation in the upstream market in China from 1998 to 2007 can account for a significant fraction of China’s economic growth during this period partly due to the significant spillover effect it has on the downstream sector. In addition, our model can also match several relevant observations in China during the same period including high and rising returns to capital, declining markups.

Despite federal law, twelve American states and Washington D.C. have legalized recreational marijuana since 2012. Using a national housing data set from the online real estate listing database Zillow.com, we identify the cross and inter-state effects of marijuana legalization on house prices in different points of the price distribution function. We find positive effects upwards of ten percent in the top half of the price distribution following successful legalization ballot initiatives, and between five and fifteen percent across the distribution after the state enacts the ballot initiative and the first legal sales take place. A spatial difference-in-differences model reveals that within Colorado and Washington, prices in neighborhoods with new dispensary openings nearby experience a seven percent price appreciation. To summarize, our results suggest that there are second order benefits to marijuana legalization.

This paper investigates the timing of a firm’s first security issue in public capital markets. We explain fluctuations over time in initial public offerings of bonds and stocks. We study Belgium in the period 1839-1935, a setting with poor investor protection, no tax distortions and changing governmental regulations. We find that economic growth leads to stock and bond IPOs and that both types of issues are timed to coincide with favorable market conditions. These effects are the strongest when the securities market has reached a mature level of development. We also find that bond IPOs coincide with more stock IPOs. Finally, our results suggest that a deregulation shock in 1873, which deregulated security markets and made it much easier to set up a firm and list securities, did not directly affect the number of IPOs, but facilitated a booming securities market in later years.

While there is growing evidence of persistent or even permanent output losses from financial crises, the causes remain unclear. One candidate is intangible capital – a rising driver of economic growth that, being non-pledgeable as collateral, is vulnerable to financial frictions. By sheltering intangible investment from financial shocks, counter-cyclical macroeconomic policy could strengthen longer-term growth, particularly so where strong product market competition prevents firms from self-financing their investments through rents. Using a rich cross-country firm-level dataset and exploiting heterogeneity in firm-level exposure to the sharp and unforeseen tightening of credit conditions around September 2008, we find strong support for these theoretical predictions. The quantitative implications are large, highlighting a powerful stabilizing role for macroeconomic policy through the intangible investment channel, and its complementarity with pro-competition product market deregulation.

In this study, we provide one of the first evidence on the effects of bank deregulation on corporate environmental performance. We use a unique dataset that contains rich information on firms’ toxic emissions and exploit bank branching deregulation in China. We find that compared with firms with lower exposure, firms more exposed to this deregulation improve their environmental performance, as measured by lower chemical oxygen demand (COD) emission intensity after deregulation. We further demonstrate that these firms’ production efficiency increases and the ratio of tangible assets to total assets decreases, which suggests that upgrading technology and asset mix are the main channels. To improve the efficiency of the banking system, many developing countries are undergoing or moving toward liberalizing it. By focusing on firm environmental performance, we document an important but unanticipated consequence of bank deregulation, and the result also provide policy implications for the burgeoning reform in green finance.

After the systematic reform in the IPO market from 2005, underwriting spreads in China keep increasing and become even higher than that in the US market during the past decade. Besides, unlike “the seven percent solution” in the US, spreads in China demonstrate a significant cross-sectional variation. Using the sample of IPOs from 2005 to 2015, we examine the determinants and economic meaning of underwriting spreads in China. We find significant firm, issuance, and policy characteristics that explain the variation of underwriting spreads. Next, we extract abnormal components of spreads to further explore their valuation effects. We document that abnormal spreads can reflect promotional efforts performed by underwriters. Specifically, they are positively associated with institutional investor participation and offer price revision in the IPO process. Moreover, we show that promotional efforts lead to reductions in IPO underpricing. Overall, issuing companies benefit from the deregulation of underwriting services in the way that greater promotional efforts lead to less underpricing and more capital raised by IPO firms. However, government interventions and policy uncertainty can result in increased IPO listing costs in China.

In 2001 soon after the Asian Crises of 1997-1998, the DotcomBubble, 9/11, the Enron crises triggered a fraud crisis in Wall Street that impacted the market to the core. Since then scandals such as the Lehman Brothers and WorldCom in 2007-2008 and the Great Recession have surpassed it, Enron still remains one of the most important cases of fraudulent accounting. In 2000’s even though the financial industry had become highly regulated, deregulation of the energy industry allowed companies to place bets on future prices. At the peak of the dotcom bubble Enron was named as a star innovator but when the dotcom bubble burst, Enron’s plan to build high speed internet did not flourish and investors started to realize losses. Furthermore, the financial losses of the operations were hid using the market to market accounting technique instead of book value and using special purpose entities to hide debt. The root cause that was identified as a company with a toxic corporate culture focused on officer compensation rather than social responsibility and hence faulty leadership. Is it possible then that; ethical accounting practices, social responsibility and ethics all become inferior goods as income rises in an ‘irrationally exuberant’era?Keywords. Enron (ENE, ENRN), Dotcom bubble, Accounting fraud, Deregulation, Speculation, Corporate culture, Social responsibility, Government intervention, Risk management, Consumer behavior, Energy markets.JEL. N0, M1, M4, M12, M14, G32, K4, K32, H12.

This paper studies whether greater competition can mitigate agency problems within banks. We measure the intensity of the agency conflict within a bank by the volume of loans that the bank lends to its insiders (e.g., executives). We first check that these loans are a form of private benefit. By exploiting interstate branching deregulation, we then show that banks react to greater competition by reducing insider lending, especially when the entry of new competitors may more strongly affect bank profitability. Results are robust to using various identification approaches and alternative indicators of agency conflict. We conclude that competitive pressure reduces managerial self-dealing. This paper was accepted by Gustavo Manso, finance.

This paper studies whether foreign investment deregulation promotes firm innovation. A theoretical framework, in which the spillover and competition effects from more foreign firms induced by foreign investment deregulation, is built to guide the empirical evaluation. Exploiting the data on Chinese firm-level patents in a difference-in-differences setting, this paper finds a significantly positive impact of foreign investment deregulation on firm innovation. Moreover, this paper finds a robust heterogeneity that the impact is prominent in the firms with high productivity while being not significant in the firms with low productivity.

We empirically investigate the role of credit supply in fertility decisions. Using the U.S. banking deregulation in the 1980s and the 2007–2009 Great Recession as two different laboratories for credit supply shocks, we find that an increase in credit supply consistently implies higher fertility rates, as well as higher probability of giving birth. This relation, which is economically and statistically significant, differs across individuals: it is more pronounced for young women and for families with unemployed husbands. Finally, we provide suggestive evidence that increased credit access leads to more optimistic expectations about personal prospects, and in turn, higher fertility rates.

Demand has rapidly outstripped supply as the urgent need for personal protective equipment (PPE) such as surgical masks, respirators, gloves, and gowns, as well

The term neoliberal has been a source of some controversy in recent years, with critics denying its usefulness. In response to those criticisms this paper analyzes neoliberalism--what is here referred to as Neoliberal Financialization--as an economic model, elaborating it and substantially contrasting it with the model that prevailed prior to it, Keynesian Fordism, likewise elaborated here. In doing so this paper contends that Keynesian Fordism stressed a state-managed and sustained output of assembly line-produced consumer durables, substantially through enlarged welfare and warfare states which also kept financialization in check. By contrast Neoliberal Financalization, sees the state retreat from significant areas of economic life (notably the nurturing of industrial development and concessions to social welfare via deregulation, privatization and "austerity"), and unleashes the financial sector Keynesian Fordism kept in check as an engine of growth. Completing the model are "creditism," "globalization" and "digitalization," which have enlarged the resources available for financial activity, broadened and smoothed the field for its operation worldwide, and accelerated and intensified its operations in a distinct, if often problematic, pattern of activity that has produced financialization, and a high stress on speculative activity and global labor cost arbitrage.

In this short Essay, I take the opportunity to highlight one further potential asymmetry that may yet emerge from the Supreme Court’s application of Chevron’s many doctrines. Drawing on then-Judge Kavanaugh’s disdissental from the D.C. Circuit’s decision affirming network neutrality rules, I suggest that there is at least one vote on the Supreme Court—and perhaps more—for an asymmetric approach to the major questions doctrine. Moreover, I demonstrate how asymmetry in this context is deeply irrational. As applied to network neutrality, the asymmetry has at least one of two effects. One, it might simply favor one large industry over another, subjecting one inter-sector wealth transfer to heightened scrutiny, while treating an analogous wealth transfer—in the opposite direction—deferentially. But the judiciary is not typically in the business of favoring one industrial sector over another. Two, it subjects consumer-protection devices to increased regulatory scrutiny, thereby shifting the costs and burdens of overcoming a regulatory default to those entities—consumers—who can likely least afford to bear them. Hence, in more general terms, Justice Kavanaugh’s unbalanced approach to the major questions doctrine tends to undermine many of the values— accountability and expertise, among others—that agency policymaking has long served.

Regulation chronically suffers significant delay starting at the detectable initiation of a “regulable activity” and culminating at effective regulatory response. Regulator reaction is impeded by various impediments: (i) confusion in optimal level, form and choice of regulatory agency, (ii) political resistance to creating new regulatory agencies, (iii) lack of statutory authorization to address particular novel problems, (iv) jurisdictional competition among regulators, (v) Congressional disinclination to regulate given political conditions, and (vi) a lack of expertise, both substantive and procedurally, to deploy successful counter-measures. Delay is rooted in several stubborn institutions, including libertarian ideals permeating both the U.S. legal system and the polity, constitutional constraints on exercise of governmental powers, chronic resource constraints including underfunding, and agency technical incapacities. Therefore, regulatory prospecting to identify regulable activity often lags the suspicion of future regulable activity or its first discernable appearance. This article develops the regulatory lag theory (RegLag), reviews regulatory technologies (RegTech) that show promise in narrowing the RegLag gap, and proposes programs to improve regulatory agency clairvoyance to more aggressively adapt to changing regulable activities, such as by using anticipatory approaches that show promise to narrow RegLag delays.

The financial crisis has led to renewed interest in the effects of deregulation on bank governance and incentives provided to bank CEOs. We examine the relation between bank CEO turnover and performance, and whether this relation has been affected by banking deregulation. We find that bank CEO turnover is more (less) sensitive to stock (accounting) performance in the post-deregulation period. We also find that such changes in turnover-performance sensitivity primarily exist in large banks, which are best positioned to exploit growth opportunities, and in banks that expand geographically after deregulation. Our results indicate an increased (decreased) emphasis on stock (accounting) performance in turnover decisions when competition and growth opportunities are greater in the deregulated environment. The findings provide evidence that the information used in board decisions varies with features of the competitive environment.