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This chapter challenges the idea that rural communities have “declined.” It argues that the term, “decline,” discounts how laws and policies have actively facilitated rural marginalization and socioeconomic distress for decades. “Decline” reframes an active phenomenon as one that occurred passively, making current rural challenges seem natural and inevitable. The chapter assesses how twentieth- and twenty-first-century federal and state laws and policies undermined traditional rural livelihoods in agriculture, natural resource and energy development, and manufacturing. The chapter then provides a legal history of transportation and telecommunications deregulation, and the role deregulation played in exacerbating geographic inequality. Overall, the chapter proposes that instead of declining, rural communities have been undermined, as policymakers have consciously traded rural welfare for some other perceived benefit. While those trade-offs may have afforded tangible societal benefits in some fashion, the decline framing discounts how rural communities were in fact knowingly sacrificed in the name of the greater good.
This article presents a longitudinal comparative analysis of the regulation of private funding to political parties in 15 West European democracies and explores how these rules have changed under the most recent wave of political finance reforms. In particular, the article questions whether a deregulation of political finance regulation may be in sight, with a downsizing of the role of the state in the political finance domain. While evidence does not support a clear movement toward deregulation, the article shows that the move from private to public subsidization may not be that irreversible as it seemed and that private funding to political parties is likely to become more prominent in the near future also in Europe.
The Deal New regulated banks, transportation, and energy among other industries, in the 1930s. In the 1970s, there was a mostly bipartisan effort to reduce regulation in those industries. Although Ronald Reagan is known as the deregulation president, it was Jimmy Carter that started deregulation in each of those industries. Alfred Kahn, whom Carter appointed to lead the Civil Aeronautics Board (CAB), together with recently retired Supreme Court Justice Stephen Breyer, advised Senator Ted Kennedy on how to deregulate airlines. The deregulation of truck, railroad, bus, and transportation, along with natural gas deregulation, followed. Deregulation was based on policy evidence that changes in those industries made it possible to lessen regulation and depend on markets to achieve greater efficiencies. By comparison, Congress decision to reduce regulation of savings and loan banks, based on industry lobbying, ended in disaster as S&Ls failed because of risky behavior and Congress had to bail them out. On balance, the regulation that occurred rebalanced the mix of government and markets in order to achieve a more robust economy.
The efforts of academics, conservative think tanks, and political leaders on emphasizing markets and reducing government paid off after the election of President Ronald Reagan, which resulted in a new mix of government and markets, although not to the extent that many proponents of small government favored. There have been additional legal procedures and political oversight, which has made it more difficult to regulate some markets; government services have been outsourced, and government spending on regulation and social welfare has been reduced. Bill Clinton, influenced by the anti-government mood in the county, supported deregulation of telecommunications, welfare, and banking, but Congress reversed the banking deregulation after a Wall Street collapse in 2008 and was forced to spend billions of dollars to save the economy. Despite the anti-government mood, nearly all the laws and programs established in the New Deal and Great Society eras have remained on the books and have not been repealed. Besides the bailout, there were some other significant expansions of government including most notably the Affordable Care Act, popularly known as Obama Care.
Business power is thought to increase over time when private actors are involved in the provision of public goods and services. This paper argues that this is partially true—and that in certain circumstances, state actors can even swiftly regain control of sectors previously ceded to private interests. When the latter fulfill some public functions on behalf or as delegates of the state, policymakers face ever greater pressures to sustain a relationship flawed by principal-agent problems—allowing business actors to derive appreciable political benefits. However, these conditions do not hold true after deregulation—when state actors retreat from a sector and attempt to direct the newly created market through licensing, norms, and standard setting. We demonstrate that deregulation sets the stage for a more competitive environment, making it harder for private interests to cooperate. This, in turn, can allow policymakers to enhance regulatory capacities and seize opportunities to highlight the shortcomings of private provision. After establishing this argument theoretically, we illustrate its implications through the comparative historical analysis of the health insurance sector in two European countries—Belgium and France. Despite their initial similarities, they experience contrasting developments regarding the welfare state’s dependency on private insurers for the provision of crucial collective goods.
This chapter addresses challenges to the KWV system as the overall surplus spiralled in the 1980s and cooperatives began offloading cheap wine onto the market in minimalist packaging. Independent producers and the SFW became increasingly critical of the KWV’s performance of its regulatory functions. The chapter provides an account of Tim Hamilton-Russell’s dogged campaign for the right to produce wine in the Hemel-en-Aarde and to market it as he saw fit. It also addresses the vine-smuggling scandal that broke in 1986, which culminated in the loosening of quarantine controls. The chapter then details how the end of white rule led to government scrutiny of the KWV. After a bitter struggle over the demands of the KWV to hold onto its assets as it converted to a private company, a political deal was struck that enabled part of them be reycled in support of a black empowerment agenda in the industry. The residual control functions were taken over by a set of new bodies. The chapter closes with a brief account of the arrival of international drinks companies and the full merger between Distillers and SFW to create Distell, in an effort to ward off potentially hostile competition.
Methadone, a medication used to treat opioid use disorder (OUD), has resulted in decreased opioid overdose deaths, while increasing treatment retention and lowering the rates of infectious diseases associated with intravenous substance use. Access to methadone is limited in the United States due to federal laws and regulatory policies that are rooted in racist “criminal justice approaches” to substance use. Unlike other controlled prescription medications, methadone is subject to restrictions on the number of doses a person can receive at any given time, known as “take-home doses” (THDs). Federal regulations mandate that patients receiving methadone must travel to government-certified clinics known as opioid treatment programs (OTPs) almost daily to receive medication for at least the first 90 days of treatment. Due to the need to practice social distancing during COVID-19, the Substance Abuse and Mental Health Services Administration (SAMHSA) – the regulatory agency which sets the accreditation standards for OTPs – released a federal waiver in March 2020 granting significant exemptions to THD regulations. Thousands of patients have now received increased THDs, a historic and impactful shift in care for people with OUD. This chapter begins with an overview of the regulation of methadone for OUD before COVID-19. Next, it reviews the evidence for regulatory reform alongside our analysis of qualitative data we collected during COVID-19 that reflects patients’ experiences with increased access to THDs. Based on the findings of our qualitative study and the empirical literature, we conclude the chapter with recommendations for modifications of THD regulations.
Discusses alternatives to traditional economic regulation, including competition for the market, contestability, state ownership, reliance on competition law, deregulation and negotiated agreements
We develop a simple two-sector neoclassical growth model in which the upstream sector produces intermediate goods, and the downstream sector produces final goods with outputs from the upstream. While the downstream sector features perfect competition, firms in the upstream sector engage in Cournot competition and charge a markup. We show that the deregulation and the introduction of competition in the upstream goods sector not only increases the productivity in the sector but also has a substantial spillover effect on the productivity of the downstream sector and factor prices. We calibrate the model to the Chinese economy and use the calibrated model to quantitatively evaluate the extent to which the deregulation in the upstream market in China from 1998 to 2006 can account for the rapid economic growth and the high and rising returns to capital in China over the same period. Our quantitative experiments show that the deregulation in the upstream sector can account for a significant share of economic growth in China during the study period. In addition, our model delivers implications that are consistent with several other relevant observations in China during the same period.
This article explores the UK vote in 2016 to exit the European Union, colloquially known as ‘Brexit’. Brexit has been portrayed as a British backlash against globalisation and a desire for a reassertion of sovereignty by the UK as a nation-state. In this context, a vote to leave the European Union has been regarded by its protagonists as a vote to ‘take back control’ to ‘make our own laws’ and ‘let in [only] who we want’. We take a particular interest in the stance of key ‘Brexiteers’ in the UK towards regulation, with the example of the labour market. The article commences by assessing the notion of Brexit as a means to secure further market liberalisation. This analysis is then followed by an account of migration as a key issue, the withdrawal process and likely future trajectory of Brexit. We argue that in contrast to the expectations of those who voted Leave in 2016, the UK as a mid-sized open economy will be a rule-taker and will either remain in the European regulatory orbit, or otherwise drift into the American one.
The COVID-19 pandemic has created economic crises and considerable loss of employment throughout the world. In the Australian context, social distancing restrictions and business closures contributed to a dramatic increase in unemployment, with 780,000 people losing work within weeks of the first COVID-19 outbreaks. Job losses were concentrated in casualised industries such as retail, recreation, arts and culture, hospitality, and accommodation. We examine policy discourses framing independent work, entrepreneurial workers and flexible work relations as essential for ‘economic recovery’, where this means business flexibility, productivity and future economic prosperity. We draw on these framings to show how the equation of flexible work relations and productivity underpins the Australian Government’s response to unemployment caused by the pandemic, as reflected in policy announcements and proposed changes to industrial relations law. In these proposals, constructions of ‘job creation’ and ‘economic recovery’ rationalise industrial relations changes that further empower business, through conflating public and business interest. At the same time, ensuing labour market deregulation and the changing profile of business renders the very idea of ‘jobs’ tendentious.
This chapter demonstrates that the lower degree of and narrower scope of the perceived strategic value of labor-intensive, non-value-added sectors, represented by textiles, for national security and resource management, has shaped their decentralization beginning under Gorbachev’s perestroika. Mass privatization after Soviet breakdown further reenforced the private governance pattern dominant in apparel and clothing. The cross-time sector and company case studies disclose the interacting strategic value and sectoral logics and show apparel and clothing factories have shut down or privatized to former managers only to languish with antiquated equipment. Today, Russian textile and garment manufacturers are outcompeted by illegal imports from China and the Commonwealth of Independent States. Industrial and technical textile sectors, which incorporate oil and petrochemicals and higher technological intensity, in contrast, experience the state intervention from central and regional governments of decentralized governance in response to political and economic pressures, such as oil boom and bust cycles and Western sanctions in post-Crimea annexation. The central government has designated petrochemicals a critical input for chemical fiber processing and provides fiscal incentives to develop technical textiles. Local governments have worked with local and national oligarchs to revive factories and production lines, and courted foreign direct investment.
The creation of an internal market that transcends all Member States has without doubt been the EU’s priority in the last sixty years. Conceptualising Europe as a market, however, requires a careful appreciation of how its economic objectives and its political objectives intersect. This chapter will focus on exactly this. We analyse what the different available methods of market integration, and their subsequent implications, tell us about the nature of the EU’s market. Which institutions have power, and why? What is the balance between economic interests and other values, and is that balance appropriate? In this chapter, we analyse the many parts to the puzzle that is the internal market. We will then focus on the two main regulatory techniques of the internal market: positive integration, through which the EU re-regulates the European market by the creation of new legislation and negative integration, which takes place where national rules governing the market are declared inapplicable as they impede the functioning of the internal market. Each of these regulatory techniques, as we will see, comes with its own assumptions, problems and implications.
Trump’s America First Energy Plan, which focuses on oil and gas expansion and rolling back regulations, promised to insulate the US economy from the volatile global oil market. In reality, the US shale oil industry, operating within the global oil markets, suffered contractions when oil supplier nations’ price wars caused global oil prices to crash. While the plan promised to bring Americans jobs and prosperity, predicating economic development on oil and gas extraction is a dubious strategy for several reasons. The shale industry, which contributed to the recent boom and expected future production, suffers from a shaky financial foundation. Even prior to COVID-19, traditional investors had begun cutting lending to shale companies and bankruptcies were accelerating. In March 2020, under Congress’s COVID-19 financial rescue package, the Trump administration executed a bailout for the oil and gas industry that shifted financial losses to American taxpayers without securing companies’ agreements to keep workers employed. The bailout replicates the decades-long economic model of the industry, which privatizes profits to the companies, while socializing the costs from the industry, through tax preferences and subsidies for the industry and through various laws that favor extraction over those that suffer from the industry’s adverse impacts.
How can America get back to an energy transition that's good for the economy and the environment? That's the question at the heart of this eye-opening and richly informative dissection of the Trump administration's energy policy. The policy was ardently pro-fossil fuel and ferociously anti-regulation, implemented by manipulating science and economic analysis, putting oil and gas insiders at the helm of environmental agencies, and hacking away at democratic norms that once enjoyed bipartisan support. The impacts on the nation's health, economy, and environment were - as this book carefully demonstrates - dire. But the damage can be reversed. Ordinary Americans, civil society groups, environmental professionals, and politicians at every level all have parts to play in making sure the needed energy transition leaves no one behind. This compelling book will appeal to course instructors and students, government and industry officials, activists and journalists, and everyone concerned about the nation's future.
Present-day advocates of antitrust reform referred to as “New Brandeisians” have invoked history in pressing the case for change. The New Brandeisians bemoan the upending of a mid-twentieth-century “golden age” of antitrust by an intellectual movement known as the Chicago School. In fact, mid-twentieth-century enforcement of antitrust was uneven and large corporations exercised substantial market power. The Chicago School also was not as decisive an agent of change as the New Brandeisians suggest. Doubts about the efficacy of government regulation and concerns about foreign competition did much to foster the late twentieth-century counterrevolution that antitrust experienced.
Economists are, at best, skeptical of politicians who trumpet industrial policies; they point to their failures in this country and abroad. They wish the politicians’ electoral mantra was “Growth, growth, growth,” not “Jobs, jobs, jobs.” They believe the focus on jobs leads to subsidies for declining industries where there are lots of workers and voters rather than for industries of the future, where there are few. Economic growth and higher standards of living inevitably mean that employment patterns will change over decades.
Even left-of-center economists love markets. For example, in their introductory economics textbook, New York Times columnist Paul Krugman and his wife Robin Wells say: “Markets are an amazingly effective way to organize economic activity.” By shrinking profits, and, in their wake, workforces, markets help societies create workforces with better-paying jobs.
Most economists, however, support government interventions to combat the monopolistic power of firms and to support some standards of safety for workers. An increasing number would support raises in the minimum wage. Nevertheless, economists strongly oppose the rapid increase in the licensing of occupations as well as many other regulations imposed on firms.
Have you ever wondered how your telephone company or Internet service provider can give you access to almost all people in the world, or how electricity suppliers can compete with each other if there is only one electric supply line passing through your street? This Element deals with the economics and public regulation of such network industries. It puts particular emphasis on the specific economic concepts used for analyzing them and on the regulatory reform movement and the compatibility of regulation and competition. Worldwide most of these industries have changed dramatically in recent years, telecommunications in particular. Network industries mostly exhibit economies of scale in production and similar economies in consumption. Both of these properties cause market power problems that often require industry-specific regulation. However, due to technological and market changes network policies have moved on from end-user regulation to wholesale regulation and in some cases to deregulation.
When we think about “regulation” – that is, a sustained and focused control mechanism over valuable activities, using rule setting, rule monitoring and rule enforcement – the first image that comes to mind is a public administrative agency. However, over the past three decades, private entities have gradually assumed greater and greater regulatory roles. When we send our children to schools, the quality of education as well as their safety and health are often monitored by private auditors. When they are sick and must be taken to an emergency room, the standards of treatment are in many hospitals determined by a private organization. When we buy them a toy, it is usually a product made by workers in developing countries whose labor conditions are evaluated by a nonprofit organization, and in factories whose environmental standards are defined by a private industry association.
From the 1970s to the 1990s there was a revolution in international financial markets, which combined the processes of financialisation and globalisation. Deregulation and financial innovation were the two underlying forces that facilitated this transformation. At the same time, distinctive national characteristics of banking structures and cultures influenced the way that financial globalisation affected the geographic distribution of financial activity. This article addresses these seismic shifts through three perspectives: changes in regulation and the geographic pattern of international banking activity, reform of the main stock markets in New York and London and the rise of financial conglomerates. It identifies complementarity as well as competition among international financial centres.