Deregulation
Deregulation is the process by which governments removes selected regulations on business in order to (in theory) encourage the efficient operation of markets. The theory is that less regulations will lead to a raised level of competitivness, therefore higher productivity, more efficiency and lower prices overall. Deregulation is different from liberalization, because a liberalized market, allowing plural or infinital players, can be regulated, to protect the consumer's rights, especially to prevent de facto or even law-allowed oligopolies.Perceived failures of deregulation (such as the failure of the Savings & Loan sector of the U.S. during the 1980s) have encouraged re-regulation (adding regulations) or, more correctly, a more balanced approach to regulation that emphasizes the quality of regulation over the quantity. That is, instead of simply removing (or adding) regulations on business, the point is to regulate business intelligently, using as sophisticated economic theory as possible.
One problem that encouraged deregulation was the way in which the regulated industries often captured the government regulatory agencies, using them to serve the industries' interests. Unfortunately, the deregulation process itself was often captured by the regulated industries.
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2 Japan 3 New Zealand 4 United States |
See also: Economy of New Zealand
European Union
Japan
Since the economic bubble in 1990s collapsed, the Japanese government has seen deregulation as an effective way to lift its economy because it has a huge deficit and cannot conduct a large tax-cut.New Zealand
New Zealand has had extensive deregulation since 1984. It was instigated by the Labour Party.United States
Deregulation was a major trend in the United States in the last quarter of the twentieth century. A number of major deregulation initiatives were passed. Some of these were withdrawn quickly (but not quickly enough to avoid major problems), including the deregulation of savings and loans. American savings banks, which were permitted to lend unfettered, had their depositors funds insured by the federal government, creating a moral hazard. Others have been considered more widely successful, including deregulation of transportation, the gas market, and the electricity market. In 1996, the media market was significantly deregulated.
Related Legislation