Editor’s Note: A substantial difference between US and EU regulatory processes is the EU’s use of the so-called “precautionary principle.” For more information on the EU’s “antithesis of science” approach to regulation, see here.
From: Regulatory Studies Center | Columbian College of Arts and Sciences
By Susan E. Dudley & Kai Wegrich
The quality and extent of government regulation is “a major determinant of prosperity.”[1] As the World Bank observes, “a thriving private sector—with new firms entering the market, creating jobs and developing innovative products—contributes to a more prosperous society,” [2] “promotes growth and expands opportunities for poor people.”[3]
The United States and the European Union, along with other “OECD high-income economies continue to have the strongest legal institutions and the least complex and costly regulatory processes on average”[4] according to the World Bank’s annual Doing Business survey.
All the top countries [in the Bank’s survey] regulate, but they do so in less costly and burdensome ways. And they focus their efforts more on protecting property rights than governments in other countries.[5]
As the U.S. Office of Management and Budget has noted, these “results are also consistent with economic theory, which predicts that economic growth is enhanced by regulatory policies that promote competitive markets, secure property rights, and intervene to correct market failures rather than to increase state influence.”[6]
