At what point is strict regulatory friction a concern to economic growth?

[Cryptomultiplier]

‎We live in a world today where regulations rule over new innovation and industries and for a business or industry to make profit, they would have to adjust their models most times to meet the regulatory requirements of the state or region they operate in.
Sometimes they even get fined or have to pay huge revenue just to operate and am sure this affects the production cost, delivery of quality and cost of purchase.
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‎When regulations shifts from defining what and what to avoid to dictating how fast an economy is allowed to evolve and grow, it is certain that economic growth in that instance has dropped significantly and that's why I believe some strict regulatory policies become a major friction that slows economic growth at the exact point where the cost of compliance with the rules outweighs the social or economic harm those rules were created to prevent.
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‎When a business or industry always requires regulatory and administrative permission to move fast, the baseline state of that industry changes from innovation until its proven dangerous, to stagnate until proven safe. This threshold is precisely where productivity growth drops because of the friction of regulatory policies.
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‎At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

[abhiseshakana]

Based on my own experiences as bussines owner when processing legalization of business permits and approval to drill wells for industry The boundaries between beneficial and detrimental climate regulations are cost estimation whether its cost or its benefit outweigh. Regulation become obstacle for economic growth when cost is outweight than its benefit, bureaucracy more complicated than protective purpose, can hinder innovation without scientific basis and it open opportunity for fraud.

On the other hand i love regulation and support it voluntary compliance if regulation actually protected safety of society, protecting environment and reduce pollution, and creates healthy business competition.

What we need to point out that regulation ideally as tools for achieving a balance between economic efficiency and the protection of public interests. As business man my cost benefit analysist is simple, bigger risk bigger regulation cost,  such as petrochemical, nuclear and mining industry will have multiple cost than consumer based industry, no complicated or overlapping authority, the process must have a timeline and certain time process, uncertainty make cost can be calculated or can make unpredictable cost, unstable regulation due to regulations change frequently also make headache due to  increase investment risk, the last when government apply the same rules to all industries without risk  analysis.

[bitLeap]

‎At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

Regulations should serve as a means to facilitate industry players in developing their products or businesses within a safe framework. However over time regulations have instead morphed into instruments of monopoly, often under the influence of various forms of pressure. Meanwhile the administrative process for obtaining official permits frequently stalls, causing creative industry players who were initially optimistic to lose interest.

[m2017]

At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

From the very moment these regulatory requirements arise, I wouldn't say they pose a threat, but rather create obstacles to rapid development and slow economic growth. But in some countries, it truly seems as if regulators are stifling businesses with their regulations. People (businesses) shouldn't be interfered with, and the market itself will "balance" the situation, because in their quest for profit and advantage, businessmen will do everything themselves (organize production, establish supply and marketing lines, and so on). Therefore, the regulator's role should be one of coordination and assistance to businesses, rather than trying to squeeze them dry in the form of taxes and create bureaucratic obstacles. Ultimately, this is beneficial (and necessary) for both parties.

[X-ray]

Too strict regulation supress innovation, currently happening in EU. For the past decade it is falling behind the U.S. and there is gap between productivity and GDP.

It's clear that enforcing strict regulatory friction will result in stunted economic growth, doesn't matter how you see it but politicians and lawmaker will say otherwise.

[Darker45]

Regulation is necessary. We can't do away with it. As a matter of fact, to a great extent, businesses thrive because of regulatory policies. The consuming public is also protected and looked after by regulations. In general, it's largely regulations that determine the success or failure of an economy.

However, regulations should be practical, sensitive, and balanced. Judging from my country's experience, it must be hard. It seems it's extremely difficult to strike a great balance. To find a perfect compromise between the interests of the people, the government, and powerful investors always remains a hard goal to achieve. But my observations suggest that it's often the public's interest--the consumers and small enterprises--that's sacrificed in the process.

[Opiate32]

I don’t think the number of regulation is the major concern. A country can have so many regulation and still attract investment if they are consistent and enforced fairly but what discourages business is when this rules keep changing and different agencies keep interpreting this same regulations differently.

A business can actually adapt to strict rules but much more harder to adapt to uncertainty. Once compliance becomes unpredictable, companies stops planning for growth and start planning for survival.

[Majestic-milf]

 When a regulatory body that's tasked with keeping order in the country are slacking or do not know their jobs, you'd find out that they'd be making strict rules when it's not necessary and bend it when it's supposed to be firm, causing a sort of friction on the growth as well.
Too much regulations leave no room for creativity or new ideas and because existing companies and agencies will be trying to conform or stay in line with these rules, there won't be room for anything else, this now makes growth difficult.
Although where there's a disadvantage, you can find advantage but people would be discouraged by the load it's putting on their companies and businesses to appreciate the advantages.

[Fortify]

‎
‎At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

There is no "one size fits all" solution to regulation and trying to find one is an effort in futility. Well designed and intentioned regulations might only work for a short period of time, even if they solved the problem precisely. This is because business is dynamic with people trying to constantly reimagine and improve on old ideas. It's easy to find examples of bad legislation, I remember an example of a law in England that was intended to tax bigger houses, so the tax was calculated based on the number of windows you had - which created unintended consequences where some people removed windows to save money. An example of a good regulation would be forcing supermarkets to charge a token amount for plastic bags, which is designed to encourage re-use rather than the old wasteful method and has largely worked as intended.

[DPHOR]

What I like about regulation is that it channels and controls how business, companies this including both private sectors to narrow down their operations to the country framework where they would have to abide to their generalization, where such wouldn't cause either environmental factor, climatically effects or even causing a natural occurrence or disaster, this is for those companies that are involved in drilling or sky building. This would give a better economical benefit for the said state and countries to be in a sound and organized way without either those companies or business owners to keeping what that will caused harm to the life of those people who are living around those environments or geopolitical region. Hence, regulations also ensures that people's life aren't generally affected by the industries and businesses that are being operated around them. Again, regulations also brings about taxation which they would also use those taxation for insurance of life and states or country development.

[Fiatless]

‎At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

When regulatory requirements are designed to benefit the majority of citizens, then it's acceptable. The aim of every business is profit, and in most cases, owners will do everything they can to maximize high returns. They don't care if they are destroying the economy or the environment.

Nevertheless, there should be a balance between regulation and innovation. The government should be open to changes and discoveries in every industry. They should not be rigid or closed because it would affect businesses negatively.

I came across the news that Zimbabwe is restricting the export of raw materials. Rather, the government is encouraging extracting companies to invest in the processing of these raw materials. This will create more revenue and employment. This is the type of regulatory law that is needed for the good of the country.

[jcojci]

Too strict regulation makes economy difficult to grow. People want to build a business but they should fills many things before they can start so that hinders business owners from starting their business and being skeptical about licensing. You could see what happens if the regulations are too strict, from the starts until the business owner gets their license. The government should realize this and if they want to see the economy starts growing and improves, they need to revise their regulations and if necessary, they can request to invite the owner business to hear their suggestion.

[knowngunman]

I don’t think the number of regulation is the major concern. A country can have so many regulation and still attract investment if they are consistent and enforced fairly but what discourages business is when this rules keep changing and different agencies keep interpreting this same regulations differently.

A business can actually adapt to strict rules but much more harder to adapt to uncertainty. Once compliance becomes unpredictable, companies stops planning for growth and start planning for survival.

You're talking about Nigeria to be specific. For years now, we've been living in exactly what you described. We have three different agencies regulating crypto activities with different rules and interpretation. The CBN ordered banks to flagged any accounts linked with crypto activities. The security exchange commission says crypto has connection with security and they will regulate it. Meanwhile, the tax authorities is figuring out how to apply tax.

One country with three different agencies with different messages. Several exchanges had to suspend their service in the country due to lack of clarity because you could be compliant with security and exchange commission and still get your account flagged by bank based on CBN order. Some countries have more strict rules but still attract investors because the rules is clear and not confusing.

[tabas]

I came across the news that Zimbabwe is restricting the export of raw materials. Rather, the government is encouraging extracting companies to invest in the processing of these raw materials. This will create more revenue and employment. This is the type of regulatory law that is needed for the good of the country.

This is a good strict rule from the government of Zimbabwe because they know that they're rich in raw materials and instead of exporting, better to do the process and benefit from it. I think Indonesia has the same policy when Apple can't enter their market and the same goes for the EV industry because they're one of the manufacturers of the car batteries. Each other that's rich in any material or precious metals understand that they shouldn't import it and better do the process within their country so that it is their people that gets the employment and other beneficial economic contribution.

[Obim34]

‎At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

While regulation can be a limitation for some, it can also become favorable to other industries and businesses or even a country at large. Regulations are not supposed to be one sided or unjustifiably decided, and I hope we don't only look at regulations from the owner's perspective but also consider a concern for protecting customers against business owners. There must be a fine balance between ownership protection and customer protection.

Regulations are meant to stem from brilliant ideas, and not selfish thoughts, if it goes contrary, It becomes limitations instead.

[stompix]

‎At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

This point:



Well, this is one example of regulations doing close to nothing while just making more problems down the line, but the EU lately has been going nuts; I can give you a few things where regulations are just being stupid:
- Scores for well-being of piglets on a farm (scoring involves toys, chewing material, noise control)
- Animals can't be transported if the temperature reaches over 30C
- Are you in a historical building sweating like hell at 36C, no air conditioning for you to save the planet, meanwhile meat is $2 more expensive per kilo because of piglets' toys

When regulations start hurting the people more than they actually help them, that's the point where everything goes in flames

[DiMarxist]

‎When a business or industry always requires regulatory and administrative permission to move fast, the baseline state of that industry changes from innovation until its proven dangerous, to stagnate until proven safe. This threshold is precisely where productivity growth drops because of the friction of regulatory policies.
‎
‎At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

Regulatory oversight is the duty of every responsible government, for an economy to be healthy then government needs to step into every sector of the economy so that there will be rules and regulations and even a competitive business environment. Anywhere there is no regular it leads to abuse in terms of the price of goods and services that a company will be offering to the public, we have seen some companies monopolizing a particular sector of an economy it all boils down to lack of regulatory framework in parts of the government.


I don't personally think that there is actually a point where government regulations will become a problem, to the economy of a country. You can't have a real economic growth if the environment is not structured in a way that companies will not respect laid down regulations and can act arbitrarily on their own, the way that they like. Regulation is there to bring about sanity in an environment.

[dzonikg28]

‎At what point do you think that strict regulatory friction becomes a concern to the economic growth of a business, an industry and the country at large?

This point:



Well, this is one example of regulations doing close to nothing while just making more problems down the line, but the EU lately has been going nuts; I can give you a few things where regulations are just being stupid:
- Scores for well-being of piglets on a farm (scoring involves toys, chewing material, noise control)
- Animals can't be transported if the temperature reaches over 30C
- Are you in a historical building sweating like hell at 36C, no air conditioning for you to save the planet, meanwhile meat is $2 more expensive per kilo because of piglets' toys

When regulations start hurting the people more than they actually help them, that's the point where everything goes in flames

This is one great stupid example for regulation, but there are so many more.

Scores for well-being of piglets on a farm (scoring involves toys, chewing material, noise control)

The crazy part about those toys is that there are rules as to what those toys have to look like and what they consist of. A normal plastic ball is not sufficient.

I can't exactly remember when it was, but they once introduced a watt limit for vacuum cleaners in order to reduce energy consumption. I think the result could have been easily anticipated back then. They conducted an analysis and found out that lower vacuum cleaners need longer to clean up, which ended up in about the sae energy consumption or so.

Similarly stupid was the regulation for the acceptable curve of cucumbers, no kidding. At first I think they wanted to ban cucumbers with a certain curve, but then they decided to apply different classes to cucumbers depending on their curve. They literally defined categories like 10 mm of bend per 10 cm length and so on and so forth.

[BABY SHOES]

Too strict regulation makes economy difficult to grow. People want to build a business but they should fills many things before they can start so that hinders business owners from starting their business and being skeptical about licensing. You could see what happens if the regulations are too strict, from the starts until the business owner gets their license. The government should realize this and if they want to see the economy starts growing and improves, they need to revise their regulations and if necessary, they can request to invite the owner business to hear their suggestion.

Including in my country where complicated regulations and bureaucracy make it increasingly difficult for business actors to get permits, sometimes regulations often change from time to time making those who want good business continue to shout at the government.

Currently, I see micro-business actors complain because they are taxed even though their income is small, the government does not want to know that those who have businesses must pay taxes without thinking about how the economic impact on the lower classes.

The government often hears advice from business people, it's just that the actions of officials are often nonsense there is no evidence that is felt.

[stadus]

When business owners are no longer in profits and no longer serving the purpose why they are into such business, and consumers feel the same way, that is already a sign that strict regulations are no longer creating a balance between business owners and consumers.

The goal purpose of any strict regulation is not only to help the government itself, but also to provide a safe and fair market both for business owners and consumers. So in any case where regulations are more seen serving the private interests of leaders than the public, then this is not anymore a regulation created for economic growth of the people, both business owners and consumers, but a regulation that set leaders to maximize their own power and status over the public.

And admit it or not, this is already happening in different country's governments, that's why we are seeing limited growth for the people, while instant growth and massive wealth accumulation for the public officials.