The Tyranny of Regulations
Yue-Chim WongHong Kong Economic Journal, 2 November 2016
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Abstract
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The paper explores the implications of government regulations, challenging the notion that they primarily serve public interests. Drawing from George Stigler's insights, it argues that regulations are often captured by industry incumbents to benefit themselves at the expense of consumers. The author discusses how deregulation and selective immigration policies, particularly in the context of Hong Kong, could enhance economic growth while addressing societal inequalities.
Key takeaways
- Stigler questioned why regulations exist.
- Stigler found that most regulations take the form of raising barriers to industry entry (for example, through licensing, quotas, and price control).
- As government regulates industry, industry seeks to capture the regulatory process and advocacy groups appear to counter the influence of producers in response to consumer demand for redressing the imbalance.
- As regulations become more and more complex, reform of the regulatory system also becomes increasingly difficult.
- According to official reports from the OECD in 2000, there were 335,993 persons from Hong Kong working in member countries, of which 251,407 were highly skilled.
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