How do countries regulate?

IMG_0153Regulation is a major issue for business.

A lot of it is good and needed – to make sure we have standards that all must abide by and ensure fairness in the system.

But increasingly, regulation of an industry is driven for purely political reasons – done to achieve a political aim without really understanding the implications across a system.

While undertaking research on regulation I found that Europe has enacted 4 times as much regulation over the past 4 years as the US. A significant imbalance.

And the orientation of regulation changes by jurisdiction:

– the US generally regulates to favor big business

– China generally regulates to favor the SOEs (State Owned Enterprises)

– European regulation generally favors the individual

None of these are wrong – it just means significantly different outcomes for each piece of regulation – often creating unintended consequences for stakeholders that aren’t the primary audience of the regulation.

Truly understanding the impact of regulation on all stakeholders in a system is not too much to ask – or is it?

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