The costs and benefits of regulation: Implications for developing countries

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Publication Details

Output type: Journal article

Author list: Guasch JL, Hahn RW

Publisher: Oxford University Press

Publication year: 1999

Journal: The World Bank Research Observer (0257-3032)

Volume number: 14

Issue number: 1

Start page: 137

End page: 158

Number of pages: 22

ISSN: 0257-3032

eISSN: 1564-6971

Languages: English-Great Britain (EN-GB)

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Open access status: green

Full text URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1997/06/01/000009265_3971126124256/Rendered/PDF/multi_page.pdf

Abstract

The literature on the benefits and costs of regulation demonstrates that this issue can be explored systematically using standard economic analysis. It also shows that regulation can have a significant adverse impact on economic growth. Specifically, regulation aimed at controlling prices and entry into markets that would otherwise be workably competitive is likely to reduce growth and adversely affect the average standard of living. rn addition, process regulation can impose a significant cost on the economy. Nonetheless, social regulations may have significant net benefits for the average consumer if designed judiciously. There are several policies developing countries might consider adopting to improve their general approach to regulation. The appropriate regulatory tools and framework will depend on many factors, including bureaucratic expertise, resource availability, political constraints, and economic impacts. There is a general need to enhance the capability for evaluating regulation at the local and national levels.

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