Deregulation
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 which progressive reforms were claimed as necessary to limit externalities like corporate abuse, unsafe child labor, monopolization, pollution, and to mitigate boom and bust cycles. Around the late 1970s, such reforms were deemed burdensome on economic growth and many politicians espousing neoliberalism 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, more efficiency and lower prices overall. Opposition to deregulation may involve apprehension regarding environmental pollution[1] 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, and the United Kingdom's Better Regulation Commission. Cost–benefit analysis is frequently used in such reviews. In addition, there have been regulatory innovations, usually suggested by economists, such as emissions trading.
Deregulation can be distinguished from privatization, which transfers state-owned businesses to the private sector.
By country[edit]
Argentina[edit]
Argentina underwent heavy economic deregulation, privatization, and had a fixed exchange rate during the Menem administration (1989–1999). In December 2001, Paul Krugman compared Enron with Argentina, claiming that both were experiencing economic collapse due to excessive deregulation.[2] Two months later, Herbert Inhaber claimed that Krugman confused correlation with causation, and neither collapse was due to excessive deregulation.[3]
Australia[edit]
Having announced a wide range of deregulatory policies, Labor Prime Minister Bob Hawke 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's Liberal Party began deregulation of the labor market with the Workplace Relations Act 1996, going much further in 2005 through its WorkChoices policy. However, this was reversed under the following Rudd Labor government.
Brazil[edit]
After Dilma's impeachment, Michel Temer introduced a labor reform, besides allowing up to 100% of foreign capital on Brazilian air companies[4] and giving more protection to state-owned enterprises from political pressure.[5] Bolsonaro administration also promoted deregulations (even the expression "Bolsonomics" was created),[6] such as Economic Freedom Law,[7] Natural Gas Law,[8] Business Environment Law,[9] Basic Sanitation Legal Framework,[10] besides allowing the direct sale of ethanol by fuel stations[11] and opening rail transport industry to private investment.[12] and deregulating the use of foreign currency.[13]