Regulatory Policy Institute Annual Westminster Conference 2023 – The Nature of Regulation:  Seeing the Wood from the Trees

Policy debates about the burden of regulation have tended to focus on estimates of administrative costs imposed upon firms and have tended to rely on an assumption that simply eliminating some of the regulations (“cutting red tape”) will lead to significant reductions in the costs imposed. Here, the Insights Team take a different perspective, recalling both RPI empirical research on these issues for the UK Cabinet Office nearly 20 years ago and the earlier “Penrose Effect”, named after Professor Edith Penrose. They argue that much more substantive effects arise from poorly considered and conducted changes in regulations in consequence of their increased calls on limited senior management bandwidth available for addressing the challenges involved in investing, innovating and expanding a business.

November’s pre-conference Insights blog is concerned with the meaning of the word ‘market’. The term appears often in economic and political discourse, usually accompanied by some other word: there are references to ‘free markets’, or to ‘oligopolistic markets’, or to ‘market failure’. But what is the nature of this thing that is ‘free’, or ‘oligopolistic’, or has ‘failed’, in the latter case usually claimed in the context of some call for a deus ex machina, in the form of a regulatory intervention, to ‘fix’ the problems.