![France Telecom Wellington NZ](https://upload.wikimedia.org/wikipedia/commons/f/f7/France_Telecom_Wellington_NZ.jpg)
Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental
regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a result of new trends in economic thinking about the inefficiencies of government regulation, and the risk that regulatory agencies would be controlled by the regulated industry to its benefit, and thereby hurt consumers and the wider economy. Economic regulations were promoted during the
Gilded Age
In United States history, the Gilded Age was an era extending roughly from 1877 to 1900, which was sandwiched between the Reconstruction era and the Progressive Era. It was a time of rapid economic growth, especially in the Northern and Wes ...
, in which
progressive reforms were claimed as necessary to limit
externalities
In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either c ...
like corporate abuse, unsafe
child labor
Child labour refers to the exploitation of children through any form of work that deprives children of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially and morally harmful. Such e ...
,
monopolization
In United States antitrust law, monopolization is illegal monopoly behavior. The main categories of prohibited behavior include exclusive dealing, price discrimination, refusing to supply an essential facility, product tying and predatory pricin ...
,
pollution
Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, th ...
, and to mitigate boom and bust cycles. Around the late 1970s, such reforms were deemed burdensome on economic growth and many politicians espousing
neoliberalism
Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent f ...
started promoting deregulation.
The stated rationale for deregulation is often that fewer and simpler regulations will lead to raised levels of competitiveness, therefore higher
productivity
Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...
, more efficiency and lower prices overall. Opposition to deregulation may involve apprehension regarding
environmental pollution
Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, th ...
and environmental quality standards (such as the removal of regulations on hazardous materials), financial uncertainty, and
constraining monopolies.
Regulatory reform is a parallel development alongside deregulation. Regulatory reform refers to organized and ongoing programs to review regulations with a view to minimizing, simplifying, and making them more cost effective. Such efforts, given impetus by the
Regulatory Flexibility Act of 1980, are embodied in the United States Office of Management and Budget's
Office of Information and Regulatory Affairs
The Office of Information and Regulatory Affairs (OIRA ) is a Division within the Office of Management and Budget (OMB), which in turn, is within the Executive Office of the President. OIRA oversees the implementation of government-wide polici ...
, and the United Kingdom's
Better Regulation Commission.
Cost–benefit analysis
Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide the best approach to achieving benefits ...
is frequently used in such reviews. In addition, there have been regulatory innovations, usually suggested by economists, such as
emissions trading
Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emissi ...
.
Deregulation can be distinguished from
privatization
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
, which transfers state-owned businesses to the private sector.
By country
Argentina
Argentina
Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the List of South American countries by area, second-largest ...
underwent heavy economic deregulation,
privatization
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
, and had a
fixed exchange rate
A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another ...
during the
Menem administration (1989–1999). In December 2001,
Paul Krugman
Paul Robin Krugman ( ; born February 28, 1953) is an American economist, who is Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for ''The New York Times''. In 2008, Krugman was t ...
compared
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth, both relatively small regional compani ...
with Argentina, claiming that both were experiencing economic collapse due to excessive deregulation. Two months later, Herbert Inhaber claimed that Krugman
confused correlation with causation, and neither collapse was due to excessive deregulation.
Australia
Having announced a wide range of deregulatory policies,
Labor
Labour or labor may refer to:
* Childbirth, the delivery of a baby
* Labour (human activity), or work
** Manual labour, physical work
** Wage labour, a socioeconomic relationship between a worker and an employer
** Organized labour and the la ...
Prime Minister
Bob Hawke
Robert James Lee Hawke (9 December 1929 – 16 May 2019) was an Australian politician and union organiser who served as the 23rd prime minister of Australia from 1983 to 1991, holding office as the leader of the Australian Labor Party (A ...
announced the policy of "Minimum Effective Regulation" in 1986. This introduced now-familiar requirements for "regulatory impact statements", but compliance by governmental agencies took many years. The labor market under the Hawke/Keating governments operated under the
Prices and Incomes Accord. In the mid-90s
John Howard
John Winston Howard (born 26 July 1939) is an Australian former politician who served as the 25th prime minister of Australia from 1996 to 2007, holding office as leader of the Liberal Party. His eleven-year tenure as prime minister is the ...
's
Liberal Party began deregulation of the labor market with the
Workplace Relations Act 1996
The ''Workplace Relations Act 1996'' was an Australian law regarding workplace conditions and rights passed by the Howard government after it came into power in 1996. It replaced the previous Labor Government's '' Industrial Relations Act 1988 ...
, going much further in 2005 through its
WorkChoices policy. However, this was reversed under the following
Rudd Labor government.
Canada
Natural gas is deregulated in most of the country, with the exception of some Atlantic provinces and some pockets like Vancouver Island and Medicine Hat. Most of this deregulation happened in the mid-1980s.
Comparison shopping website
A comparison shopping website, sometimes called a price comparison website, price analysis tool, comparison shopping agent, shopbot, aggregator or comparison shopping engine, is a vertical search engine that shoppers use to filter and compare pro ...
s operate in some of these jurisdictions, particularly Ontario, Alberta and British Columbia. The other provinces are small markets and have not attracted suppliers. Customers have the choice of purchasing from a local distribution company (LDC) or a deregulated supplier. In most provinces the LDC is not allowed to offer a term contract, just a variable price based on the spot market. LDC prices are changed either monthly or quarterly.
Ontario
Ontario ( ; ) is one of the thirteen provinces and territories of Canada.Ontario is located in the geographic eastern half of Canada, but it has historically and politically been considered to be part of Central Canada. Located in Central Ca ...
began deregulation of electricity supply in 2002, but pulled back temporarily due to voter and consumer backlash at the resulting price volatility.
The government is still searching for a stable working regulatory framework.
The current status is a partially regulated structure in which consumers have received a capped price for a portion of the publicly owned generation. The remainder has been at market price and there are numerous competing energy contract providers. However, Ontario is installing Smart Meters in all homes and small businesses and is changing the pricing structure to Time of Use pricing. All small volume consumers were scheduled to shift to the new rate structure by the end of 2012.
Alberta
Alberta ( ) is one of the thirteen provinces and territories of Canada. It is part of Western Canada and is one of the three prairie provinces. Alberta is bordered by British Columbia to the west, Saskatchewan to the east, the Northwest T ...
has deregulated its electricity provision. Customers are free to choose which company they sign up with, but there are few companies to choose from and the consumer price of electricity has increased substantially. Consumers may choose to remain with the public utility at the Regulated Rate Option.
Former Premier Ralph Klein based the entire deregulation scheme on Enron's business model, and continued with it even after the highly publicized
California electricity crisis
California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...
and the
collapse of Enron because of illegal accounting practices.
European Union
In 2003, there were amendments to EU directive on
software patent
A software patent is a patent on a piece of software, such as a computer program, libraries, user interface, or algorithm.
Background
A patent is a set of exclusionary rights granted by a state to a patent holder for a limited period of time ...
s.
Since 2006, the
European Common Aviation Area
The European Common Aviation Area (ECAA) is a single market in aviation services.
ECAA agreements were signed on 5 May 2006 in Salzburg, Austria between the EU and some external countries. It built upon the EU's ''acquis communautaire'' and ...
has given carriers from one EU country the
freedom of the air in most others.
Ireland
The taxi industry was deregulated in
Ireland
Ireland ( ; ga, Éire ; Ulster-Scots: ) is an island in the North Atlantic Ocean, in north-western Europe. It is separated from Great Britain to its east by the North Channel, the Irish Sea, and St George's Channel. Ireland is the s ...
in 2000,
and the price of a license dropped overnight to €5,000. The number of taxis increased dramatically.
However, some existing taxi drivers were unhappy with the change, as they had invested up to €100,000 to purchase licenses from existing holders, and regarded them as assets. In October 2013 they brought a test case in the High Court for damages.
Their claim was dismissed two years later.
United Kingdom
The
Conservative
Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
government led by
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the first female British prime ...
started a programme of deregulation and
privatization
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
after the party's victory at the
1979 general election. The
Building Act 1984
The Building Act 1984 is a United Kingdom statute consolidating previous legislation concerning the construction process, and the design and specifications for buildings and their component parts, and related matters, in England and Wales.UK Legisl ...
reduced building regulations from 306 pages to 24, while
compulsory competitive tendering
Best Value was government policy in the United Kingdom affecting the provision of public services in England and Wales. In Wales, Best Value is known as the Wales Programme for Improvement. A statutory duty of Best Value applies in Scotland.Audi ...
required local government to compete with the private sector in delivering services. Other steps included
express coach
A bus (contracted from omnibus, with variants multibus, motorbus, autobus, etc.) is a road vehicle that carries significantly more passengers than an average car or van. It is most commonly used in public transport, but is also in use for char ...
(
Transport Act 1980
The Transport Act 1980 was an Act of Parliament in the United Kingdom. It introduced deregulation of coach services in the United Kingdom and allow authorities to deregulate bus services on a trial basis. It was introduced by the Conservative go ...
),
British Telecom
BT Group plc (trading as BT and formerly British Telecom) is a British multinational telecommunications holding company headquartered in London, England. It has operations in around 180 countries and is the largest provider of fixed-line, b ...
(completed in 1984),
privatization of London bus services (1984),
local bus services (
Transport Act 1985) and
the railways (
Railways Act 1993
The Railways Act 1993c 43 was introduced by John Major's Conservative government and passed on 5 November 1993. It provided for the restructuring of the British Railways Board (BRB), the public corporation that owned and operated the national ra ...
). The feature of all those privatizations was that their shares were offered to the general public.
From 1997 to 2010, the
Labour governments of
Tony Blair
Sir Anthony Charles Lynton Blair (born 6 May 1953) is a British former politician who served as Prime Minister of the United Kingdom from 1997 to 2007 and Leader of the Labour Party from 1994 to 2007. He previously served as Leader of t ...
and
Gordon Brown
James Gordon Brown (born 20 February 1951) is a British former politician who served as Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 to 2010. He previously served as Chancellor of the Exchequer in Tony ...
developed a programme called "
better regulation
The Better Regulation Commission was a non-departmental public body of the British government, independent of any government department but under the oversight of Department for Business, Enterprise and Regulatory Reform.
Its role, according to ...
". This required government departments to review, simplify or abolish existing regulations, and a "one in, one out" approach to new regulations. In 1997, Chancellor Brown announced the "freeing" of the Bank of England to set monetary policy, so the Bank was no longer under direct government control. In 2006, new primary legislation (the
Legislative and Regulatory Reform Act 2006
The Legislative and Regulatory Reform Act 2006 (c51) (LRRA) is an Act of the Parliament of the United Kingdom. It was enacted to replace the Regulatory Reform Act 2001 (RRA). The Act was and remains very controversial, because of a perception ...
) was introduced to establish statutory principles and a code of practice and it permits ministers to make
Regulatory Reform Orders (RROs) to deal with older laws which they deem to be out of date, obscure or irrelevant. This act has often been criticized and was described in Parliament by
Lord (Patrick) Jenkin as the "Abolition of Parliament Act".
New Labour
New Labour was a period in the history of the British Labour Party from the mid to late 1990s until 2010 under the leadership of Tony Blair and Gordon Brown. The name dates from a conference slogan first used by the party in 1994, later seen ...
privatized only a few services, such as
Qinetiq. But a great deal of infrastructure and maintenance work previously carried out by government departments was contracted out (outsourced) to private enterprise under the
public–private partnership
A public–private partnership (PPP, 3P, or P3) is a long-term arrangement between a government and private sector institutions.Hodge, G. A and Greve, C. (2007), Public–Private Partnerships: An International Performance Review, Public Adminis ...
, with competitive bidding for contracts within a regulatory framework. This included large projects such as building new hospitals for the
NHS, building new state schools, and maintaining the
London Underground
The London Underground (also known simply as the Underground or by its nickname the Tube) is a rapid transit system serving Greater London and some parts of the adjacent counties of Buckinghamshire, Essex and Hertfordshire in England.
The ...
. These were never privatized by public offer, but instead by tendering commercial interests.
New Zealand
![Postal deregulation New Zealand](https://upload.wikimedia.org/wikipedia/commons/0/0c/Postal_deregulation_New_Zealand.jpg)
New Zealand Governments adopted policies of extensive deregulation from 1984 to 1995. Originally initiated by the
Fourth Labour Government of New Zealand
The Fourth Labour Government of New Zealand governed New Zealand from 26 July 1984 to 2 November 1990. It was the first Labour government to win a second consecutive term since the First Labour Government of 1935 to 1949. The policy agenda o ...
, the policies of deregulation were later continued by the
Fourth National Government of New Zealand. The policies had the goal of liberalizing the economy and were notable for their very comprehensive coverage and innovations. Specific policies included: floating the exchange rate; establishing an independent reserve bank; performance contracts for senior civil servants; public sector finance reform based on accrual accounting; tax neutrality; subsidy-free agriculture; and industry-neutral competition regulation. Economic growth was resumed in 1991. New Zealand was changed from a somewhat closed and centrally controlled economy to one of the most open economies in the OECD. As a result, New Zealand, went from having a reputation as an almost socialist country to being considered one of the most business-friendly countries of the world, next to Singapore. However, critics charge that the deregulation has brought little benefit to some sections of society, and has caused much of New Zealand's economy (including almost all of the banks) to become foreign-owned.
Russia
Russia went through wide-ranging deregulation (and concomitant privatization) efforts in the late 1990s under
Boris Yeltsin
Boris Nikolayevich Yeltsin ( rus, Борис Николаевич Ельцин, p=bɐˈrʲis nʲɪkɐˈla(j)ɪvʲɪtɕ ˈjelʲtsɨn, a=Ru-Boris Nikolayevich Yeltsin.ogg; 1 February 1931 – 23 April 2007) was a Soviet and Russian politician wh ...
, now partially reversed under
Vladimir Putin
Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
. The main thrust of deregulation has been the electricity sector (see
RAO UES), with railroads and communal utilities tied in second place. Deregulation of the natural gas sector (
Gazprom
PJSC Gazprom ( rus, Газпром, , ɡɐzˈprom) is a Russian majority state-owned multinational energy corporation headquartered in the Lakhta Center in Saint Petersburg. As of 2019, with sales over $120 billion, it was ranked as the large ...
) is one of the more frequent demands placed upon Russia by the United States and European Union.
United States
History of regulation
One problem that encouraged deregulation was the way in which regulated industries often come to control the government
regulatory agencies in a process known as
regulatory capture
In politics, regulatory capture (also agency capture and client politics) is a form of corruption of authority that occurs when a political entity, policymaker, or regulator is co-opted to serve the commercial, ideological, or political interests ...
. Industries then uses regulation to serve their own interests, at the expense of the consumer. A similar pattern has been seen with the deregulation process itself, often effectively controlled by regulated industries through lobbying. Such political forces, however, exist in many other forms for other
lobby group
In politics, lobbying, persuasion or interest representation is the act of lawfully attempting to influence the actions, policies, or decisions of government officials, most often legislators or members of regulatory agencies. Lobbying, which ...
s.
Examples of deregulated industries in the United States are banking, telecommunications, airlines, and natural resources.
During the
Progressive Era
The Progressive Era (late 1890s – late 1910s) was a period of widespread social activism and political reform across the United States focused on defeating corruption, monopoly, waste and inefficiency. The main themes ended during Am ...
(1890s–1920),
Presidents Theodore Roosevelt
Theodore Roosevelt Jr. ( ; October 27, 1858 – January 6, 1919), often referred to as Teddy or by his initials, T. R., was an American politician, statesman, soldier, conservationist, naturalist, historian, and writer who served as the 26t ...
,
William Howard Taft
William Howard Taft (September 15, 1857March 8, 1930) was the 27th president of the United States (1909–1913) and the tenth chief justice of the United States (1921–1930), the only person to have held both offices. Taft was elected pr ...
, and
Woodrow Wilson
Thomas Woodrow Wilson (December 28, 1856February 3, 1924) was an American politician and academic who served as the 28th president of the United States from 1913 to 1921. A member of the Democratic Party, Wilson served as the president of ...
instituted regulation on parts of the American economy, most notably big business and industry. Some prominent reforms were
trust-busting (the destruction and banning of monopolies), the creation of laws protecting the American consumer, the creation of a federal income tax (by the
Sixteenth Amendment; the income tax used a
progressive tax structure with especially high taxes on the wealthy), the establishment of the
Federal Reserve
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
, the institution of shorter
working hours, higher
wages
A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', '' prevailing wage'', and ''yearly bonuses,'' and remuner ...
, better living conditions, better rights and privileges to trade unions, protection of the rights of
strikers, banning of unfair labor practices, and the delivery of more
social services
Social services are a range of public services intended to provide support and assistance towards particular groups, which commonly include the disadvantaged. They may be provided by individuals, private and independent organisations, or adminis ...
to the working classes and
social safety net
The social safety net (SSN) consists of non-contributory assistance existing to improve lives of vulnerable families and individuals experiencing poverty and destitution. Examples of SSNs are previously-contributory social pensions, in-kind and fo ...
s to many unemployed workers, thus helping to create a
welfare state
A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equita ...
.
During the Presidencies of
Warren Harding
Warren Gamaliel Harding (November 2, 1865 – August 2, 1923) was the 29th president of the United States, serving from 1921 until his death in 1923. A member of the Republican Party, he was one of the most popular sitting U.S. presidents. A ...
(1921–23) and
Calvin Coolidge
Calvin Coolidge (born John Calvin Coolidge Jr.; ; July 4, 1872January 5, 1933) was the 30th president of the United States from 1923 to 1929. Born in Vermont, Coolidge was a Republican lawyer from New England who climbed up the ladder of Ma ...
(1923–29), the federal government generally pursued
laissez-faire
''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups ...
economic policies. After the onset of the
Great Depression
The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
, President
Franklin D. Roosevelt implemented many economic regulations, including the
National Industrial Recovery Act
The National Industrial Recovery Act of 1933 (NIRA) was a US labor law and consumer law passed by the 73rd US Congress to authorize the president to regulate industry for fair wages and prices that would stimulate economic recovery. It also ...
(which was struck down by the Supreme Court), regulation of trucking, airlines and communications, the
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 (also called the Exchange Act, '34 Act, or 1934 Act) (, codified at et seq.) is a law governing the secondary trading of securities ( stocks, bonds, and debentures) in the United States of America. A land ...
, and the
Glass–Steagall Act of 1933. These regulations stayed largely in place until
Richard Nixon
Richard Milhous Nixon (January 9, 1913April 22, 1994) was the 37th president of the United States, serving from 1969 to 1974. A member of the Republican Party, he previously served as a representative and senator from California and was ...
's Administration. In supporting his competition-limiting regulatory initiatives President Roosevelt blamed the excesses of big business for causing an
economic bubble
An economic bubble (also called a speculative bubble or a financial bubble) is a period when current asset prices greatly exceed their intrinsic valuation, being the valuation that the underlying long-term fundamentals justify. Bubbles can be c ...
. However, historians lack consensus in describing the causal relationship between various events and the role of government economic policy in causing or ameliorating the Depression.
1970–2000
Deregulation gained momentum in the 1970s, influenced by research by the
Chicago school of economics
The Chicago school of economics is a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and popularized its principles. Milton Friedman and George Stig ...
and the theories of
George Stigler
George Joseph Stigler (; January 17, 1911 – December 1, 1991) was an American economist. He was the 1982 laureate in Nobel Memorial Prize in Economic Sciences and is considered a key leader of the Chicago school of economics.
Early life and e ...
,
Alfred E. Kahn
Alfred Edward Kahn (October 17, 1917 – December 27, 2010) was an American economist and political advisor who specialized in regulation and deregulation. He was an important influence in the deregulation of the airline and energy industrie ...
,
and others. The new ideas were widely embraced by both liberals and conservatives. Two leading think tanks in Washington, the
Brookings Institution
The Brookings Institution, often stylized as simply Brookings, is an American research group founded in 1916. Located on Think Tank Row in Washington, D.C., the organization conducts research and education in the social sciences, primarily in e ...
and the
American Enterprise Institute
The American Enterprise Institute for Public Policy Research, known simply as the American Enterprise Institute (AEI), is a center-right Washington, D.C.–based think tank that researches government, politics, economics, and social welfare. A ...
, were active in holding seminars and publishing studies advocating deregulatory initiatives throughout the 1970s and 1980s. Cornell economist Alfred E. Kahn played a central role in both theorizing and participating in the
Carter Administration
Jimmy Carter's tenure as the 39th president of the United States began with his inauguration on January 20, 1977, and ended on January 20, 1981. A Democrat from Georgia, Carter took office after defeating incumbent Republican Preside ...
's efforts to deregulate transportation.
Transportation
= Nixon administration
=
The first comprehensive proposal to deregulate a major industry, transportation, originated in the
Richard Nixon
Richard Milhous Nixon (January 9, 1913April 22, 1994) was the 37th president of the United States, serving from 1969 to 1974. A member of the Republican Party, he previously served as a representative and senator from California and was ...
Administration and was forwarded to Congress in late 1971. This proposal was initiated and developed by an interagency group that included the Council of Economic Advisors (represented by
Hendrik Houthakker and Thomas Gale Moore), White House Office of Consumer Affairs (represented by Jack Pearce), Department of Justice, Department of Transportation, Department of Labor, and other agencies.
The proposal addressed both rail and truck transportation, but not air carriage. (92d Congress, Senate Bill 2842) The developers of this legislation in this Administration sought to cultivate support from commercial buyers of transportation services, consumer organizations, economists, and environmental organization leaders. This 'civil society' coalition became a template for coalitions influential in efforts to deregulate trucking and air transport later in the decade.
= Ford administration
=
After Nixon left office, the
Gerald Ford
Gerald Rudolph Ford Jr. ( ; born Leslie Lynch King Jr.; July 14, 1913December 26, 2006) was an American politician who served as the 38th president of the United States from 1974 to 1977. He was the only president never to have been elected ...
presidency, with the allied interests, secured passage of the first significant change in regulatory policy in a pro-competitive direction, in the
Railroad Revitalization and Regulatory Reform Act of 1976
The Railroad Revitalization and Regulatory Reform Act of 1976, often called the "4R Act," is a United States federal law that established the basic outlines of regulatory reform in the railroad industry and provided transitional operating funds fo ...
.
= Carter administration
=
President
Jimmy Carter
James Earl Carter Jr. (born October 1, 1924) is an American politician who served as the 39th president of the United States from 1977 to 1981. A member of the Democratic Party (United States), Democratic Party, he previously served as th ...
– aided by economic adviser Alfred E. Kahn
– devoted substantial effort to transportation deregulation, and worked with Congressional and civil society leaders to pass the
Airline Deregulation Act on October 24, 1978 – the first federal government regulatory regime, since the 1930s, to be completely dismantled.
[Lang, Susan S]
"Economist Alfred Kahn, 'father of airline deregulation' and former presidential adviser, dies at 93,"
December 27, 2010, '' Cornell Chronicle,'' retrieved April 9, 2020
Carter also worked with Congress to produce the
Staggers Rail Act
The Staggers Rail Act of 1980 is a United States federal law that deregulated the American railroad industry to a significant extent, and it replaced the regulatory structure that had existed since the Interstate Commerce Act of 1887.
Backgroun ...
(signed October 14, 1980), and the
Motor Carrier Act of 1980
The Motor Carrier Regulatory Reform and Modernization Act, more commonly known as the Motor Carrier Act of 1980 (MCA) is a United States federal law which deregulated the trucking industry.
Background
Motor carrier deregulation was a part of a s ...
(signed July 1, 1980).
= 1970s deregulation effects
=
These were the major deregulation acts in transportation that set the general conceptual and legislative framework, which replaced the regulatory systems put in place between the 1880s and the 1930s. The dominant common theme of these Acts was to lessen
barriers to entry
In theories of competition in economics, a barrier to entry, or an economic barrier to entry, is a fixed cost that must be incurred by a new entrant, regardless of production or sales activities, into a market that incumbents do not have or ha ...
in transport markets and promote more independent, competitive pricing among transport service providers, substituting the freed-up competitive market forces for detailed regulatory control of entry, exit, and price making in transport markets. Thus deregulation arose, though regulations to promote competition were put in place.
= Reagan administration
=
U.S. President
Ronald Reagan
Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
campaigned on the promise of rolling back environmental regulations. His devotion to the economic beliefs of
Milton Friedman
Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...
led him to promote the deregulation of finance, agriculture, and transportation. A series of substantial enactments were needed to work out the process of encouraging competition in transportation. Interstate buses were addressed in 1982, in the
Bus Regulatory Reform Act
The Bus Regulatory Reform Act of 1982 (, ) was signed into law by President Ronald Reagan on September 20, 1982. The law contained provisions considered " deregulatory" of the bus industry, representing the largest legislation of regulatory refor ...
of 1982. Freight forwarders (freight aggregators) got more freedoms in the
Surface Freight Forwarder Deregulation Act of 1986
The Surface Freight Forwarder Deregulation Act of 1986, Public Law 99-521, is a federal law of the United States which eliminated federal regulation of prices, services and entry as to general commodities surface 'freight forwarders' This Act was ...
. As many states continued to regulate the operations of motor carriers within their own state, the intrastate aspect of the trucking and bus industries was addressed in the
Federal Aviation Administration Authorization Act of 1994, which provided that "a State, political subdivision of a State, or political authority of two or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier." (c)(1) (Supp. V 1999).
Ocean transportation was the last to be addressed. This was done in two acts, the
Ocean Shipping Act of 1984 and the
Ocean Shipping Reform Act of 1998. These acts were less thoroughgoing than the legislation dealing with U.S. domestic transportation, in that they left in place the "conference" system in international ocean liner shipping, which historically embodied cartel mechanisms. However, these acts permitted independent rate-making by conference participants, and the 1998 Act permitted secret contract rates, which tend to undercut collective carrier pricing. According to the
United States Federal Maritime Commission
The United States Federal Maritime Commission (FMC) is an independent federal agency based in Washington, D.C. that is responsible for the regulation of oceanborne international transportation of the U.S. It is chaired by Daniel B. Maffei.
His ...
, in an assessment in 2001, this appears to have opened up substantial competitive activity in ocean shipping, with beneficial economic results.
Energy
The
Emergency Petroleum Allocation Act
The Emergency Petroleum Allocation Act of 1973 (EPAA) was a U.S. law that required the President to promulgate regulations to allocate and control price of petroleum products in response to the 1973 oil crisis.
It was extended by the Energy Polic ...
was a regulating law, consisting of a mix of regulations and deregulation, which passed in response to
OPEC
The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headqua ...
price hikes and domestic price controls which affected the
1973 oil crisis
The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had su ...
in the United States. After adoption of this federal legislation, numerous state legislation known as
Natural Gas Choice programs have sprung up in several states, as well as the District of Columbia. Natural Gas Choice programs allow residential and small volume natural gas users to compare purchases from natural gas suppliers with traditional utility companies. There are currently hundreds of federally unregulated natural gas suppliers operating in the US. Regulation characteristics of Natural Gas Choice programs vary between the laws of the currently adoptive 21 states (as of 2008).
Deregulation of the electricity sector in the U.S. began in 1992. The
Energy Policy Act of 1992
The Energy Policy Act of 1992, effective October 24, 1992, (102nd Congress H.R.776.ENR, abbreviated as EPACT92) is a United States government act. It was passed by Congress and set goals, created mandates, and amended utility laws to increase c ...
eliminated obstacles for wholesale electricity competition, but deregulation has yet to be introduced in all states. As of April 2014, 16 U.S. states (
Connecticut
Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York (state), New York to the west, and Long Island Sound to the ...
,
Delaware
Delaware ( ) is a state in the Mid-Atlantic region of the United States, bordering Maryland to its south and west; Pennsylvania to its north; and New Jersey and the Atlantic Ocean to its east. The state takes its name from the adjacent ...
,
Illinois
Illinois ( ) is a state in the Midwestern United States. Its largest metropolitan areas include the Chicago metropolitan area, and the Metro East section, of Greater St. Louis. Other smaller metropolitan areas include, Peoria and Rock ...
,
Maine
Maine () is a state in the New England and Northeastern regions of the United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Canadian provinces of New Brunswick and Quebec to the northeast and nor ...
,
Maryland
Maryland ( ) is a state in the Mid-Atlantic region of the United States. It shares borders with Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware and the Atlantic Ocean t ...
,
Massachusetts
Massachusetts (Massachusett: ''Muhsachuweesut Massachusett_writing_systems.html" ;"title="nowiki/> məhswatʃəwiːsət.html" ;"title="Massachusett writing systems">məhswatʃəwiːsət">Massachusett writing systems">məhswatʃəwiːsət'' En ...
,
Michigan
Michigan () is a state in the Great Lakes region of the upper Midwestern United States. With a population of nearly 10.12 million and an area of nearly , Michigan is the 10th-largest state by population, the 11th-largest by area, and the ...
,
Montana
Montana () is a state in the Mountain West division of the Western United States. It is bordered by Idaho to the west, North Dakota and South Dakota to the east, Wyoming to the south, and the Canadian provinces of Alberta, British Columbi ...
,
New Hampshire
New Hampshire is a U.S. state, state in the New England region of the northeastern United States. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Gulf of Maine to the east, and the Canadian province of Quebec t ...
,
New Jersey
New Jersey is a state in the Mid-Atlantic and Northeastern regions of the United States. It is bordered on the north and east by the state of New York; on the east, southeast, and south by the Atlantic Ocean; on the west by the Delaware ...
,
New York
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* '' ...
,
Ohio
Ohio () is a state in the Midwestern region of the United States. Of the fifty U.S. states, it is the 34th-largest by area, and with a population of nearly 11.8 million, is the seventh-most populous and tenth-most densely populated. The sta ...
,
Oregon
Oregon () is a U.S. state, state in the Pacific Northwest region of the Western United States. The Columbia River delineates much of Oregon's northern boundary with Washington (state), Washington, while the Snake River delineates much of it ...
,
Pennsylvania
Pennsylvania (; ( Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, ...
,
Rhode Island
Rhode Island (, like ''road'') is a U.S. state, state in the New England region of the Northeastern United States. It is the List of U.S. states by area, smallest U.S. state by area and the List of states and territories of the United States ...
, and
Texas
Texas (, ; Spanish language, Spanish: ''Texas'', ''Tejas'') is a state in the South Central United States, South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2 ...
) and the
District of Columbia
)
, image_skyline =
, image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...
have introduced deregulated
electricity market
In a broad sense, an electricity market is a system that facilitates the exchange of electricity-related goods and services. During more than a century of evolution of the electric power industry, the economics of the electricity markets had un ...
s to consumers in some capacity. Additionally, seven states (
Arizona
Arizona ( ; nv, Hoozdo Hahoodzo ; ood, Alĭ ṣonak ) is a state in the Southwestern United States. It is the 6th largest and the 14th most populous of the 50 states. Its capital and largest city is Phoenix. Arizona is part of the Fou ...
,
Arkansas
Arkansas ( ) is a landlocked state in the South Central United States. It is bordered by Missouri to the north, Tennessee and Mississippi to the east, Louisiana to the south, and Texas and Oklahoma to the west. Its name is from the Osage ...
,
California
California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...
,
Nevada
Nevada ( ; ) is a U.S. state, state in the Western United States, Western region of the United States. It is bordered by Oregon to the northwest, Idaho to the northeast, California to the west, Arizona to the southeast, and Utah to the east. N ...
,
New Mexico
)
, population_demonym = New Mexican ( es, Neomexicano, Neomejicano, Nuevo Mexicano)
, seat = Santa Fe
, LargestCity = Albuquerque
, LargestMetro = Tiguex
, OfficialLang = None
, Languages = English, Spanish ( New Mexican), Navajo, Ker ...
,
Virginia
Virginia, officially the Commonwealth of Virginia, is a state in the Mid-Atlantic and Southeastern regions of the United States, between the Atlantic Coast and the Appalachian Mountains. The geography and climate of the Commonwealth ar ...
, and
Wyoming
Wyoming () is a U.S. state, state in the Mountain states, Mountain West subregion of the Western United States. It is bordered by Montana to the north and northwest, South Dakota and Nebraska to the east, Idaho to the west, Utah to the south ...
) began the process of electricity deregulation in some capacity but have since suspended deregulation efforts.
Communications
Deregulation was put into effect in the communications industry by the government at the start of the
Multi-Channel Transition era. This deregulation put into place a division of labor between the studios and the networks. Communications in the United States (and internationally) are areas in which both technology and regulatory policy have been in flux. The rapid development of computer and communications technology – particularly the Internet – have increased the size and variety of communications offerings. Wireless, traditional landline telephone, and cable companies increasingly invade each other's traditional markets and compete across a broad spectrum of activities. The
Federal Communications Commission
The Federal Communications Commission (FCC) is an independent agency of the United States federal government that regulates communications by radio, television, wire, satellite, and cable across the United States. The FCC maintains jurisdiction ...
and Congress appear to be attempting to facilitate this evolution. In mainstream economic thinking, development of this competition would militate against detailed regulatory control of prices and service offerings, and hence favor deregulation of prices and entry into markets. On the other hand, there exists substantial concern about concentration of media ownership resulting from relaxation of historic controls on media ownership designed to safeguard diversity of viewpoint and open discussion in the society, and about what some perceive as high prices in cable company offerings at this point.
Finance
The
financial sector
Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...
in the U.S. has been considerably deregulated in recent decades, which has allowed for greater
financial risk
Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financial ...
taking. The financial sector used its considerable political sway in
Congress
A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of a ...
and in the political establishment and influenced the ideology of political institutions to press for more and more deregulation. Among the most important of the regulatory changes was the
Depository Institutions Deregulation and Monetary Control Act
The Depository Institutions Deregulation and Monetary Control Act of 1980 (, ) (often abbreviated DIDMCA or MCA) is a United States federal financial statute passed in 1980 and signed by President Jimmy Carter on March 31. It gave the Federal Res ...
of 1980, which repealed the parts of the
Glass–Steagall Act regarding interest rate regulation via retail banking. The
Financial Services Modernization Act
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...
of 1999 repealed part of the Glass–Steagall Act of 1933, removing barriers in the market that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company.
Such deregulation of the financial sector in the United States fostered greater risktaking by finance sector firms through the creation of
innovative financial instruments
Instrument may refer to:
Science and technology
* Flight instruments, the devices used to measure the speed, altitude, and pertinent flight angles of various kinds of aircraft
* Laboratory equipment, the measuring tools used in a scientific lab ...
and practices, including
securitization
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling ...
of loan obligations of various sorts and
credit default swap
A credit default swap (CDS) is a financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default (by the debtor) or other credit event. That is, the seller of the CDS insures the buyer against som ...
s. This caused a series of financial crises, including the
savings and loan crisis, the
Long-Term Capital Management
Long-Term Capital Management L.P. (LTCM) was a highly-leveraged hedge fund. In 1998, it received a $3.6 billion bailout from a group of 14 banks, in a deal brokered and put together by the Federal Reserve Bank of New York.
LTCM was founded in 1 ...
(LTCM) crisis, each of which necessitated major bailouts, and the derivatives scandals of 1994.
These warning signs were ignored as financial deregulating continued, even in view of the inadequacy of
industry self-regulation
Industry self-regulation is the process whereby members of an industry, trade or sector of the economy monitor their own adherence to legal, ethical, or safety standards, rather than have an outside, independent agency such as a third party entit ...
as shown by the financial collapses and bailout. The 1998 bailout of LTCM sent the signal to large "
too-big-to-fail
"Too big to fail" (TBTF) and "too big to jail" is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the great ...
" financial firms that they would not have to suffer the
consequences of the great risks they take. Thus, the greater risktaking allowed by deregulation and encouraged by the bailout paved the way for the
financial crisis of 2007–08
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...
.
Related legislation
* 1976 –
Hart-Scott-Rodino Antitrust Improvements Act PL 94-435
* 1977 –
Emergency Natural Gas Act PL 95-2
* 1978 –
Airline Deregulation Act PL 95-50
* 1978 –
National Gas Policy Act PL 95-621
* 1980 –
Depository Institutions Deregulation and Monetary Control Act
The Depository Institutions Deregulation and Monetary Control Act of 1980 (, ) (often abbreviated DIDMCA or MCA) is a United States federal financial statute passed in 1980 and signed by President Jimmy Carter on March 31. It gave the Federal Res ...
PL 96-221
* 1980 –
Motor Carrier Act PL 96-296
* 1980 –
Regulatory Flexibility Act PL 96-354
* 1980 –
Staggers Rail Act
The Staggers Rail Act of 1980 is a United States federal law that deregulated the American railroad industry to a significant extent, and it replaced the regulatory structure that had existed since the Interstate Commerce Act of 1887.
Backgroun ...
PL 96-448
* 1982 –
Garn–St. Germain Depository Institutions Act
The Garn–St Germain Depository Institutions Act of 1982 (, , enacted October 15, 1982) is an Act of Congress that deregulated savings and loan associations and allowed banks to provide adjustable-rate mortgage loans. It is disputed whether the a ...
PL 97-320
* 1982 –
Bus Regulatory Reform Act
The Bus Regulatory Reform Act of 1982 (, ) was signed into law by President Ronald Reagan on September 20, 1982. The law contained provisions considered " deregulatory" of the bus industry, representing the largest legislation of regulatory refor ...
PL 97-261
* 1989 –
Natural Gas Wellhead Decontrol Act
Nature, in the broadest sense, is the physical world or universe. "Nature" can refer to the phenomena of the physical world, and also to life in general. The study of nature is a large, if not the only, part of science. Although humans are p ...
PL 101-60
* 1992 –
National Energy Policy Act PL 102-486
* 1996 –
Telecommunications Act PL 104-104
* 1999 –
Gramm-Leach-Bliley Act PL 106-102
Controversy
The deregulation movement of the late 20th century had substantial economic effects and engendered substantial controversy. The movement was based on intellectual perspectives which prescribed substantial scope for market forces, and opposing perspectives have been in play in national and international discourse.
The movement toward greater reliance on market forces has been closely related to the growth of economic and institutional
globalization
Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
between about 1950 and 2010.
For deregulation
Many economists have concluded that a trend towards deregulation will increase economic welfare long-term and a sustainable free market system. Regarding the electricity market, contemporary academic Adam Thierer, "The first step toward creating a free market in electricity is to repeal the federal statutes and regulations that hinder electricity competition and consumer choice." This viewpoint stretches back centuries. Classical economist
Adam Smith
Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——— ...
argued the benefits of deregulation in his 1776 work, ''
The Wealth of Nations
''An Inquiry into the Nature and Causes of the Wealth of Nations'', generally referred to by its shortened title ''The Wealth of Nations'', is the ''magnum opus'' of the Scottish economist and moral philosopher Adam Smith. First published in 1 ...
'':
ithout trade restrictionsthe obvious and simple system of natural liberty establishes itself of its own accord. Every man...is left perfectly free to pursue his own interest in his own way.... The sovereign is completely discharged from a duty or which
Or or OR may refer to:
Arts and entertainment Film and television
* "O.R.", a 1974 episode of M*A*S*H
* Or (My Treasure), a 2004 movie from Israel (''Or'' means "light" in Hebrew)
Music
* ''Or'' (album), a 2002 album by Golden Boy with Mis ...
no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.
Scholars who theorize that deregulation is beneficial to society often cite what is known as the Iron Law of Regulation, which states that all regulation eventually leads to a net loss in social welfare.
Against deregulation
Critics of
economic liberalization
Economic liberalization (or economic liberalisation) is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. In politics, the doctrine is associated with classical liber ...
and deregulation cite the benefits of regulation, and believe that certain regulations do not distort markets and allow companies to continue to be
competitive
Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indivi ...
, or according to some, grow in competition.
Much as the state plays an important role through issues such as
property rights
The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically ...
, appropriate regulation is argued by some to be "crucial to realise the benefits of service liberalisation".
Critics of deregulation often cite the need of regulation in order to:
* create a level playing field and ensure
competition
Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indivi ...
(e.g., by ensuring new energy providers have competitive access to the national grid);
* maintain
quality standards for services (e.g., by specifying qualification requirements for service providers);
*
protect consumers (e.g. from fraud);
* ensure sufficient provision of information (e.g., about the features of
competing services);
* prevent
environmental degradation
Environmental degradation is the deterioration of the environment (biophysical), environment through depletion of resources such as quality of air, water and soil; the destruction of ecosystems; habitat destruction; the extinction of wildlife; an ...
(e.g., arising from high levels of tourist development);
* guarantee wide
access to services (e.g., ensuring poorer areas where profit margins are lower are also provided with electricity and health services); and,
* prevent
financial instability and protect consumer savings from excessive risktaking by financial institutions.
Sharon Beder, a writer with PR Watch, wrote "Electricity deregulation was supposed to bring cheaper electricity prices and more choice of suppliers to householders. Instead it has brought wildly volatile wholesale prices and undermined the reliability of the electricity supply."
William K. Black claims that inappropriate deregulation helped create a criminogenic environment in the
savings and loan industry, which attracted opportunistic
control fraud
Control fraud occurs when a trusted person in a high position of responsibility in a company, corporation, or state subverts the organization and engages in extensive fraud for personal gain. The term "control fraud" was coined by William K. Black ...
s like
Charles Keating
Charles Humphrey Keating Jr. (December 4, 1923 – March 31, 2014) was an American sportsman, lawyer, real estate developer, banker, financier, conservative activist, and convicted felon best known for his role in the savings and loan sca ...
, whose massive political campaign contributions were used successfully to further remove regulatory oversight. The combination substantially delayed effective governmental action, thereby substantially increasing the losses when the fraudulent
Ponzi scheme
A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...
s finally collapsed and were exposed. After the collapse, regulators in the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) were finally allowed to file thousands of criminal complaints that led to over a thousand felony convictions of key Savings and Loan insiders. By contrast, between 2007 and 2010, the OCC and OTS combined made zero criminal referrals; Black concluded that elite financial fraud has effectively been decriminalized.
Economist Jayati Ghosh is of the opinion that deregulation is responsible for increasing price volatility on the commodity market. This particularly affects people and economies in developing countries. More and more homogenization of financial institution which may also be a result of deregulation turns out to be a major concern for small-scale producers in those countries.
See also
*
Deregulated capitalism
*
Ease of Doing Business Index
The ease of doing business index was an index created jointly by Simeon Djankov, Michael Klein, and Caralee McLiesh, three leading economists at the World Bank Group. The academic research for the report was done jointly with professors Edward Gla ...
*
Electricity provider switching
*
Political economy
Political economy is the study of how Macroeconomics, economic systems (e.g. Marketplace, markets and Economy, national economies) and Politics, political systems (e.g. law, Institution, institutions, government) are linked. Widely studied ph ...
*
Corporatocracy
Corporatocracy (, from corporate and el, -κρατία, translit=-kratía, lit=domination by; short form corpocracy) is an economic, political and judicial system controlled by corporations or corporate interests.
The concept has been used ...
*
Night-watchman state
A night-watchman state, or minarchy, whose proponents are known as minarchists, is a model of a state that is limited and minimal, whose functions depend on libertarian theory. Right-libertarians support it only as an enforcer of the non-aggres ...
*
Public service company A public service company (or public utility company) is a corporation or other non-governmental business entity (i.e. limited partnership) which delivers public services - certain services considered essential to the public interest. The ranks of su ...
*
Regulatory reform
*
Stranded costs
References
*
*
*
*
*
Notes
Further reading
*
* Baskin, J. and P. Miranti. ''A History of Corporate Finance'' (Cambridge UP, 1997), worldwide.
*
* , in United States
* Kahn, Alfred E. "Deregulation: looking backward and looking forward." ''Yale Journal on Regulation'' 7 (1990): pp. 325
online*
*
*
*
External links
*
*
*
*
*
*
*
*. This comprehensive study indicating, among other things, that transport deregulation reduced distribution costs in the United States from about 14% of gross domestic product to under 11% (If this measure is selected, current dollar savings can be calculated by multiplying current GDP by @3%).
isplaced in article/sup>
{{Authority control
Administrative law
Economic liberalization
Economics of regulation
Law reform
Public economics
Market structure