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]

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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?

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.