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Improve Regulation with Localism and Competition

by Tisha Casida, published

Often the issue of “regulation” is implicitly framed as “people who want no regulations” versus “people who want copious amounts of regulations,” but there is a very large middle-ground where most people will agree that some regulations are good, and that we must work together as a community and a country to understand how best to apply those regulations.

When it comes to federal regulations, it could be argued that many of them and the agencies that enforce them are unconstitutional and could be nullified at the state and county level. There are also not enough federal resources to effectively enforce all of the rules and regulations on the books for an entire country of 300 million people– and therefore, we must turn to the states and local governments for regulation.

One solution would be to de-federalize the regulatory regime and leave it up to states and local governments to pass and enforce regulations. If competition works for businesses, why not make governments compete with each other in terms of which state or county's regulations are best for both consumers and businesses?

For example, when it comes to regulations for agriculture and the food supply, different county and state governments can write and enforce their own regulations based on their better understanding of local issues, and then which state to live and do business in will be just one more business choice that farmers, ranchers, and producers have. This will force state and local governments to compete with each other to produce better regulations.

Part of this process can be how businesses educate their customers about what regulations they are following (since the whole point of regulations is to protect the consumer). Eventually, states and counties that do the best job of both meeting the needs of the consumer, as well as meeting the needs of the farmers, ranchers, and producers would see economic growth and most likely attract even more business. Again, the competition between regulators could help produce better public policy.

Broad, over-reaching, one-size-fits-all rules and regulations that come from Washington, DC hurt not only businesses, but also consumers. For instance, there are several treatments that have proven effective at fighting cancer, but as soon as these products reach the Food and Drug Administration (FDA), they are often stalemated for years, and then consumers lose, doctors lose, and businesses lose.

Having regulations at the federal level is ineffective for everyone, and if we left it up to state and local governments– that is where people can be closest to the decision-making as well as closer to their representation. At the state and local level, it is easier to hold people accountable and have transparency. So, for people who want to have effective regulations, it follows that we should decentralize these rules and regulations.

Photo Credit: Wikimedia Commons / Author: teofilo

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