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

Abstract

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.

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Notes

  1. 1.

    Take for example Ikeda (1997: 40): “…those who favor laws mandating that drugs be of a quality higher than what the unregulated market would have dictated are benefited at the expense of those who must now pay increased prices for prescription drugs owing to the higher costs of producing the higher-quality drugs.”

  2. 2.

    For surveys of this vast literature see Buchanan et al. (1980) Tollison (1982), Congleton et al. (2008), Hillman (2013), and Shughart II and Thomas (2015).

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Correspondence to Diana W. Thomas.

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Thomas, D.W. A process perspective on regulation: Who bears the dispersed costs of regulation?. Rev Austrian Econ 31, 395–402 (2018). https://doi.org/10.1007/s11138-018-0426-3

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Keywords

  • Regressive effects of regulation
  • Intervention
  • Dispersed costs

JEL classification

  • B53
  • L51
  • I32