The Review of Austrian Economics

, Volume 31, Issue 4, pp 395–402 | Cite as

A process perspective on regulation: Who bears the dispersed costs of regulation?

  • Diana W. ThomasEmail author


Scholars in both Austrian Economics and the Public Choice tradition intuitively understand that intervention often creates redistribution from lower income households to the middle class, but there has been little systematic inquiry into the distributional consequences of interventionism. This paper systematically applies Austrian insights to the dispersed costs side of the analysis of intervention to offer a better sense of how large those costs may be and who tends to bear them. An emergent literature on the regressive effects of regulation highlights those distributional consequences both from a theoretical and an empirical perspective.


Regressive effects of regulation Intervention Dispersed costs 

JEL classification

B53 L51 I32 


  1. Bailey, J. B., & Thomas, D. W. (2017). Regulating away competition: the effect of regulation on entrepreneurship and employment. Journal of Regulatory Economics, 52(3), 237–254.CrossRefGoogle Scholar
  2. Bailey, J., Thomas, D. W., & Anderson, J. (2018). Regressive Effects of Regulation on Wages. Public Choice, forthcoming. Google Scholar
  3. Bastiat, F. (1995). Selected Essays on Political Economy. In Irvington-on-Hudson. New York: Foundation for Economic Education.Google Scholar
  4. Boettke, P. J. (1998). Economic Calculation: The Austrian Contribution to Political Economy. Advances in Austrian Economics, 5, 131–158.Google Scholar
  5. Boettke, P., & Leeson, P. (2004). An ‘Austrian’ Perspective on Public Choice. In C. Rowley, & F. Schneider, The Encyclopedia of Public Choice (pp. 351–356). Boston, MA: Springer.Google Scholar
  6. Buchanan, J. M., Tollison, R. D., & Tullock, G. (1980). Toward a Theory of the Rent-Seeking Society. In College Station. Texas: Texas A&M University Press.Google Scholar
  7. Calcagno, P. T., & Sobel, R. S. (2014). Regulatory costs on entrepreneurship and establishment employment size. Small Business Economics, 42(3), 541–559.CrossRefGoogle Scholar
  8. Chambers, D., Collins, C. A., & Krause, A. (2018a). How Do Federal Regulations Affect Consumer Prices? An Analysis of the Regressive Effects of Regulation. Public Choice, forthcoming. Google Scholar
  9. Chambers, D., Mclaughlin, P. A., & Stanley, L. (2018b). Barriers to prospertiy: the harmful impact of entry regulations on income inequality. Public Choice, forthcoming. Google Scholar
  10. Chambers, D., McLaughlin, P. A., & Stanley, L. (2018c). Regulation and Poverty: An empirical examination of the relationship between the incidence of federal regulation and the occurrence of poverty across the states. Working paper.Google Scholar
  11. Congleton, R. D., Hillman, A. L., & Konrad, K. A. (2008). Forty Years of Research on Rent Seeking, 2 vols. Heidelberg. Germany: Springer.CrossRefGoogle Scholar
  12. Dirmeyer, J. (2011). The jitney potential: transportation regulation and the welfare of the poor. In R. Koppl, Enterprise programs: freeing entrepreneurs to provide essential services for the poor (pp. 14–26). National Center for Policy Analysis.Google Scholar
  13. Gilens, M., & Page, B. I. (2014). Theories of American Politics: Elites, Interest Groups. and Average Citizens. Perspectives on Politics, 12(3), 564–581.CrossRefGoogle Scholar
  14. Hayek, F. A. (1944). The Road to Serfdom. Chicago: The University of Chicago Press.Google Scholar
  15. Hayek, F. A. (1945). The Use of Knowledge in Society. American Economic Review, 35(4), 519–530.Google Scholar
  16. Hillman, A. L. (2013). Rent seeking. In M. Reksulak, L. Razzolini, & W. F. Shughart II, The Elgar Companion to Public Choice, Second Edition. Northampton, MA. USA: Edward Elgar.Google Scholar
  17. Ikeda, S. (1997). Dynamics of the Mixed Economy. New York, NY: Routledge.CrossRefGoogle Scholar
  18. Jones, P. R., & Cullis, J. G. (1986). Is democracy regressive? A comment on political participation. Public Choice, 51, 101–107.CrossRefGoogle Scholar
  19. Jouvenal, B. d. (1961). Seminar Exercise: The Chairman’s Problem. American Political Science Review, 55(2), 368–372.Google Scholar
  20. Kirzner, i. (1985). Discovery and the capitalist process. Chicago, IL: The University of Chicago Press.Google Scholar
  21. Koppl, R. (2011). Enterprise programs: freeing entrepreneurs to provide essential services for the poor. National Center for Policy Analysis.Google Scholar
  22. Koppl, R. (2018). Expert Failure. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  23. Krueger, A. O. (1974). The political economy of the rent-seeking society. American Economic Review, 64(3), 291–303.Google Scholar
  24. Lavoie, D. ([1985]2015). Rivalry and Central Planning. Arlington, Virginia: Mercatus Center at George Mason University.Google Scholar
  25. Mises, L. v. ([1929]2011). A Critique of Interventionism. Auburn, Alabama: Ludwig von Mises Institute.Google Scholar
  26. Mises, L. v. ([1949]1998). Human Action. Auburn, Alabama: Ludwig von Mises Institute.Google Scholar
  27. Mises, L. v. ([1951]1962). Socialism. New Haven: Yale University Press.Google Scholar
  28. Mulholland, S. E. (2018). Stratification by regulation: are bootleggers and Baptists biased? Public Choice, forthcoming.Google Scholar
  29. Olson, M. (1971). The Logic of Collective Action. Cambridge, MA: Harvard University Press.Google Scholar
  30. Peltzman, S. (1976). Toward a More General Theory of Regulation. The Journal of Law and Economics, 19(2), 211–240.CrossRefGoogle Scholar
  31. Rothbard, M. N. ([1970]2006). Power and Market: Government and the Economy. Auburn, Alabama: Ludwig von Mises Institute.Google Scholar
  32. Shogren, J. F. (1990). The Optimal Subsidization of Baptists and Bootleggers. Public Choice, 67(2), 181–189.CrossRefGoogle Scholar
  33. Shughart II, W. F., & Thomas, D. W. (2015). Regulatory rent seeking. In R. D. Congleton, & A. L. Hillman, Companion to the Political Economy of Rent Seeking (pp. 167–186). Northampton, MA, USA: Edward Elgar.Google Scholar
  34. Simmons, R. T., Yonk, R. M., & Thomas, D. W. (2011). Bootleggers, Baptists, and Political Entrepreneurs. The Independent Review, 3(15), 367–381.Google Scholar
  35. Smith, A., & Yandle, B. (2014). Bootleggers & Baptists. Washington D.C., USA: Cato Institute.Google Scholar
  36. Stigler, G. J. (1970). Director’s Law of PUblic Income Redistribution. The Journal of Law & Economics, 13(1), 1–10.CrossRefGoogle Scholar
  37. Stigler, G. J. (1971). The theory of economic regulation. The Bell Journal of Economics and Management, 2(1), 3–21.CrossRefGoogle Scholar
  38. Thomas, M. D. (2018). Reapplying behavioral symmetry: public choice and choice architecture. Public Choice, forthcoming. Google Scholar
  39. Thomsen, E. F. (1992). Prices and Knowledge: A Market-Process Perspective. New York: Routledge.CrossRefGoogle Scholar
  40. Tollison, R. D. (1982). Rent seeking: a survey. Kyklos, 35(4), 575–602.CrossRefGoogle Scholar
  41. Tullock, G. (1967). The Welfare Costs of Tarriffs, Monopolies. and Theft. Western Economic Journal, 7, 224–232.Google Scholar
  42. Tullock, G. (1989). The Economics of Special Privilege and Rent Seeking. New York, NY: Springer.CrossRefGoogle Scholar
  43. Wagner, R. E. (2012). Deficits, Debt, and Democracy: Wresteling with Tragedy on the Fiscal Commons. Norhampton, MA: Edward Elgar Publishing Ltd.Google Scholar
  44. Wittman, D. A. (1995). The Myth of Democratic Failure. Chicago, IL: University of Chicago Press.Google Scholar
  45. Yandle, B. (1983). Bootleggers and Baptists - The Education of a Regulatory Economist. Regulation, 7, 12–16.Google Scholar
  46. Yandle, B. (2013). How Earth Day Triggered Environmental Rent Seeking. The Independent Review, 18(1), 35–47.Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Economics and Finance Department, Institute for Economic InquiryCreighton UniversityOmahaUSA

Personalised recommendations