The difference between regulation and red tape

My research brief this week, “Growth in Local Wineries and Distilleries Reflect Regulatory Differences,” builds on a recent blog post. It shows how North Carolina’s wineries have come back much more strongly than its distilleries. Given that North Carolina was the national leader in both industries before Prohibition killed them off, it posits that a lighter regulatory environment in wine as a big reason for the difference.

In setting it up, I explained that yes, Virginia, there is a range of regulatory levels. It’s important to keep that in mind:

When the state decides to regulate an industry, it doesn’t necessarily apply the same level of regulation it uses for other regulated industries. This fact about regulation is one reason why we advocate reforming the state’s occupational licensing system into one that uses the “least restrictive regulation necessary” to address a legitimate state concern in an occupation.

Just because we need to regulate something doesn’t mean we should go whole hog.

It’s also why people outside of government tend to distinguish between regulation (making the rules of the game) and red tape (an unnecessary tangle that makes it harder to be productive for no good reason).

The point is this: Even if there’s an industry where the state has a proper role for regulating it, that doesn’t mean all regulatory options are proper. As with occupational licensing and other areas, the choice about regulating isn’t a toggle switch between chaotic anarchy and absolute government control.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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