Economic Benefits from Regulation

Many students are taught and/or implicitly assume that deregulation is a supply-side policy designed to unleash innovation, drive market entry and stimulate growth. In this piece for Project Syndicate, Professor Diane Coyle argues that there are three important channels through which regulation can benefit an economy and in doing so, provides some important evaluation strands for A-level economics students.

In a nutshell the benefits of well-designed regulation include:

1. Technical standards help to utilise faster economies of scale
2. Strengthens competition when it tackles information asymmetries especially with complex products
3. Protects consumers even when this means less supernormal profits for businesses with market power