Is regulation good for an economy?<\/p>\n
The short answer is yes<\/a>.<\/p>\n Balancing of\u00a0<\/strong>interests<\/b><\/p>\n Regulation is unfortunately often portrayed as red tape, bureaucracy or an unreasonable cost imposed on business by people who know nothing about\u00a0 doing business. And yes, sometimes this can be true.\u00a0 However, it must always be remembered that regulations are balancing of interests within a society. This balancing act is not always an equal 50\/50 split but a weighing and measuring\u00a0 of interests some of\u00a0 which may take presidents over another in a given situation.\u00a0 No reasonable person would argue, I would think, that making profits – a very important interest in most societies – should or ought to take presidents over safe baby formula or clean drinking water in our homes.<\/p>\n Additionally, this balancing is dynamic and not a static process. This has become all the more evident and\u00a0 important as we develop the fourth industrial revolution<\/a>.<\/p>\n <\/p>\n 3 ways that regulation benefits economies<\/strong><\/p>\n In a\u00a0 very though revoking article\u00a0 on the World Economic Forum<\/a>‘s\u00a0 website: 3 ways that regulation benefits economies<\/a>\u00a0<\/em>the benefits of regulation, well\u00a0 three of them at least, is outlined.<\/p>\n Below I capture a few highlights that serve as a brief\u00a0 summary:<\/p>\n 1. M<\/strong>arket-creating and market-growing<\/strong> \u2013 \u201cWhen the standard is set by regulation in a large market like the EU, the United States, or China, economies of scale kick in quickly. The virtuous circle of falling prices, quality improvements, and growing demand is thereby established<\/em>.\u201d
\n2.\u00a0Enabling competition<\/strong> \u201c\u2013 regulation facilitates a level playing field between large incumbents and new entrants, enabling innovation to take root. And by providing assurances about the safety or effectiveness of new products and services, and setting minimum mandated standards, regulation gives consumers the confidence to try something new.<\/em>\u201d
\n3. Protection of consumers<\/strong> \u2013 \u201cA society\u2019s welfare is not identical with the profitability of its businesses, or with the growth rate of GDP.\u201d<\/em><\/p>\nRelated Posts:<\/h3>