Research on Interstate Compact, Regulatory Accumulation in Arizona, and the Likelihood of an Authoritarian Crackdown in Hong Kong

New Mercatus research from the week of Feb 10-14

An Interstate Compact to Phase Out Company Giveaways

Michael D. Farren | State Testimony

Academic research shows that economic development subsidies generally don’t achieve their stated goals. Despite these economic problems, political-economic analysis implies that governments continue to pursue economic development subsidies because they appear to be beneficial for the policymakers who support them. In his recent testimony before the Maryland General Assembly, research fellow Michael D. Farren illustrates why these subsidies remain a problem and how an interstate compact offers an opportunity for a cooperative solution. 

Prompting a Regulatory Reset in Arizona

James Broughel | State Testimony

In his testimony before the Arizona State Senate, senior research fellow James Broughel analyzes the costs of regulatory accumulation and how Arizona can approach a regulatory reset. Despite real progress in recent years to reduce red tape, Arizona’s regulatory institutions could be strengthened to ensure that regulatory clutter does not continue to accumulate. 

A regulatory reset would be an effective way to conduct periodic spring cleaning of unnecessary regulations by ensuring the removal of obsolete regulations in a sensible, bipartisan manner. This reset would be beneficial, as the accumulation of unnecessary regulations can slow down economic growth and weaken the effectiveness of regulations that are justified to protect health, safety, and the environment.

Predicting Authoritarian Crackdowns

Weifeng Zhong and Julian TszKin Chan | Research Paper

In the latter part of 2019, Hong Kong was the site of a series of protests against a proposed extradition bill and, more generally, the tightening of control by the Chinese government. As the unrest became more dangerous, some observers speculated about the likelihood of an authoritarian crackdown by the Chinese government.

Senior research fellow Weifeng Zhong and data scientist Julian TszKin Chan’s newest research paper offers an index of proximity, in days, of a crackdown. To produce this index, they use an innovative approach to read and anticipate the Chinese government’s behavior: they pick up the signals from the government’s own propaganda.