Wednesday, January 27, 2016
Mirit Eyal-Cohen (Alabama) presents The Hidden Price of Regulation at St. Louis today as part of its Faculty Workshop Series:
Rules and regulations inflict costs on regulated parties differently. This Article is the first to explore this discriminatory effect. It reveals that entities that lack economies of scale, scope, and age are disadvantaged. To address this discriminatory effect, governments enact various size-based exclusionary rules. The article reveals, however, that these regulatory exclusions do not solve the problem. Rather, they create more harm. These exemptions often exacerbate the impact of the very regulation whose cost they seek to reduce. The Article makes the following additional three contributions to the current literature. First, it demonstrates that the relationship between size and regulatory effects is non-exclusive and also extends to scope and age. Second, it illustrates some overlooked effects of regulations on certain entities and the latent externalities imposed on their unregulated affiliates. Lastly, it provides policymakers with mechanisms to alleviate regulatory burdens.