Cutting Red Tape To Spur Economic Growth: U.S. states that have implemented policies such as regulatory budgets that cut red tape tend to grow faster than states that have maintained the status quo (Patrick McLaughlin, Aug 01, 2024, Discourse)
[S}everal U.S. states have reformed their regulatory process in some way over the past few years. The movement was arguably inspired by the Canadian province of British Columbia, which in 2001 recognized a need to cut some of the regulatory red tape that had built up over time. British Columbia’s groundbreaking red tape reduction initiative succeeded in reducing the quantity of regulations on its books by about 40% within three years. Moreover, the red tape reduction caused the province’s economic growth rate to increase by more than one percentage point, thereby converting British Columbia from economic laggard to leader in just a few years.
Now that some U.S. states have taken steps toward cutting accumulated red tape as well, we can start to answer some basic questions about these policy innovations: How well are they working in terms of cutting red tape? And are reform states seeing increased economic growth as a result, like British Columbia experienced? The positive effect of reforming the regulatory process and cutting red tape should not be ignored: Seemingly, any jurisdiction that proactively avoids unnecessary accumulation and cuts red tape might be able to boost its economy as British Columbia did.