THE COSTS OF REGULATION
Economists have studied the impact of regulation to weigh its costs and benefits. The results of the latest comprehensive survey are shown in Table 17-l. The effects of regulation include both efficiency gains or losses (such as those that come when inefficiently high levels of pollution and income redistribution (as occurs when high trucking prices redistribute income from consumers to truckers). Most studies suggest that the main effects of economic regulation are losses in efficiency and large amounts of income redistribution. The record of social regulation is mixed, with some cases showing significant benefits and others having large costs with few benefits.
The costs of both social and economic regulation (including the restrictions on international trade) are estimated to have been around 3.2 percent of net domestic product as of 1988. no studies comparable to that in Table 17-1 arc currently available. it is likely that the overall burden of regulation is today lower with the declining barriers to trade. further deregulation of industry, and fewer major social regulations over the last decade.
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