The burdens (plural) of regulation
Policy debates about the burden of regulation have tended to focus on estimates of administrative costs imposed upon firms and have tended to rely on an assumption that simply eliminating some of the regulations (“cutting red tape”) will lead to significant reductions in the costs imposed. Here, the Insights Team take a different perspective, recalling both RPI empirical research on these issues for the UK Cabinet Office nearly 20 years ago and the earlier “Penrose Effect”, named after Professor Edith Penrose. They argue that much more substantive effects arise from poorly considered and conducted changes in regulations in consequence of their increased calls on limited senior management bandwidth available for addressing the challenges involved in investing, innovating and expanding a business.