As my colleague Christine Hall reported earlier this week, our Canadian think tank friends at the Fraser Institute have a new book out on changing demographics and entrepreneurship, featuring a chapter contributed by CEI’s very own Wayne Crews.
Wayne’s chapter examines regulatory barriers to entrepreneurship and how government red tape can mean not just higher costs for consumers and smaller returns for investors, but new companies and products that never come into existence at all. As Wayne says, ““If getting things done requires too many steps, there will be fewer entrepreneurs”:
The counterintuitive examples one finds to the maxim that increases in regulatory restrictions reduce entrepreneurship may not seem as counterintuitive when rent-seeking and political predation are taken into account. This section assesses some of the literature’s empirical evidence regarding the conceptual linkages between regulation and entrepreneurship (and characteristics of the entrepreneur and his economy) discussed above. We also address some problems in measurement, such as difficulties in holding constant moderating and mediating variables that can influence the empirical relationship between regulation and entrepreneurship. However, the attempt to measure matters for good governing. As the World Bank stated in Doing Business (2017), “[Hernando] de Soto’s conjecture, which turned out to be right, was that measuring and reporting would create pressure for improvements in the efficiency of government.”
Read more from Wayne in his Forbes column this week, summarizing the arguments of his chapter: “Next-Level Prosperity: Explaining and Reversing Declining Entrepreneurship Rates”.