Committee for Economic Development

Regulation can provide a number of societal benefits such as improve food safety, ensures safety and efficacy of pharmaceuticals, protects consumers against fraud, promotes safety in transportation, protects workers in the workplace, and helps enforce civil rights laws in areas such as fair housing.  But regulation can also have real costs as well -- costs to business, costs to consumers, costs to American competitiveness in the world. Resources that could be spent on new investment instead go towards regulatory compliance, and the impact on smaller businesses can be particularly profound. The fundamental tool of regulation should be cost-benefit analysis.

CED has promoted the idea of “smart regulation” – the idea that regulation should achieve the purpose for which it was imposed at the lowest possible cost and with the maximum possible benefits. Smart regulations are well-designed at the outset and must be continually reviewed, revised, or sunset, particularly given the rapid pace of technological change. The process of adopting these regulations requires strong input from all stakeholders who have an expertise in how they would be implemented in practice, including from those who would be subject to the regulation.  See CED’s book on this topic: Smart Regulation, Changing Speed Bumps into Guardrails. Download the book here.