Crises often illuminate “inefficient” public policies—ones with costs that outweigh their benefits. Society can tolerate (and may not even notice) them in ordinary times, allowing the policies to continue and protect and enrich special interests. But in crises, their costs become less tolerable.
Because of the coronavirus, the U.S. economy is experiencing simultaneous negative shocks to demand and supply. The demand shock is broadly understood: “social distancing” is causing people to avoid (and governments to close or curtail) mass transit, restaurants, personal services, and other businesses. The supply shock is less recognized but more troubling: quarantines and worker illness threaten to disrupt supply chains for goods that are in strong demand, including medical supplies, food, disinfectants and cleaners, and energy.
Inefficient regulations exacerbate this supply shock, limiting production and raising prices. Chris Edwards and Jeff Singer have written about some of these regulations that governments are now hastening to suspend in order to boost supply.
Cato’s policy journal Regulation examines government rules on economic activity, points out inefficient ones, and suggests reforms. In times like these, improving any regulations would be helpful; however, several articles over the last several years are especially relevant to the coronavirus crisis.
Below the jump is a list of these articles, with short summaries of each and links to the full articles. The list is divided into two sections: rules whose reform would help immediately, and rules whose reform would help in future crises. For federal and state policymakers looking for responses to the current crisis, this list is a good place to start.
Read more at https://www.cato.org/blog/coronavirus-regulation
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