Federal regulators often have good intentions when they propose new rules. However, at best, policymakers only consider the implications of each regulation on its own before it is implemented. They pay little attention to how the buildup of regulations over time has hindered innovation and damaged economic growth.
Research by the Mercatus Center at George Mason University indicates that the accumulation of rules over the past several decades has slowed economic growth, amounting to an estimated $4 trillion loss in US GDP in 2012 (had regulations stayed at 1980 levels). The accumulation of regulation has disproportionately disadvantaged certain groups, such as unskilled workers and low-income households. Unless Congress and agencies pursue substantive reform, regulatory accumulation will continue to stifle economic growth.
For several years scholars at the Mercatus Center have been examining how regulations and the regulatory process affect American consumers and businesses, and they have identified several adverse consequences. Recent research from the Mercatus Center, for example, adds to a growing body of scholarship that points to regulatory accumulation as a significant issue for the US economy.
According to the Mercatus Center’s RegData—a tool that uses text analysis to quantify the federal regulations targeting each industry in the United States—total regulatory restrictions have increased by nearly 20 percent since 1997, to more than 1 million. Several studies have quantified how the accumulation of rules can slow economic growth:
Proponents of regulation often cite the need to protect society as a whole, and particularly low-income individuals, as justification for regulating despite potential economic costs. However, numerous regulations disproportionately burden poor Americans, who are least able to afford them, by raising the prices of basic goods such as food and utilities.
The rapid growth in the quantity of federal rules has likely hindered the struggling labor market. An increasing regulatory burden can harm workers in various ways. A 2013 Mercatus study explains how:
Regulations that make entry into the market more difficult may increase inequality by corralling low-skilled workers into low-paying, less regulated fields or forcing them to operate illegally and incur the higher costs of doing so.
Regulatory accumulation may be particularly detrimental to economic prosperity to the extent that it deters entrepreneurship. If larger existing firms can overcome the costs of complying with regulations more easily than new, small firms, the startups that often drive innovation and job growth might never emerge.
Federal regulations have accumulated over many decades, resulting in a system of duplicative, obsolete, conflicting, and even contradictory rules. The consequences to the economy—and to the workers, consumers, and job creators who drive economic growth and prosperity—are costly. Regulatory accumulation is a consequence of a complicated regulatory process and creates a serious problem for the US economy.
Even the best-designed individual rule can create adverse effects by its interaction with the system of rules already in effect. In light of the several adverse effects already identified in this line of research, policymakers should more fully consider the consequences of regulatory accumulation and how the regulatory process results in such accumulation before adding to an already sizable pile of rules.
 Bentley Coffey, Patrick A. McLaughlin, and Pietro Peretto, “The Cumulative Cost of Regulations” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, 2016).
 Stuart Shapiro and Deanna Moran, “The Checkered History of Regulatory Reform since the APA,” N.Y.U. Journal of Legislation & Public Policy 19, no. 141 (2016): 141–82.
 Patrick A. McLaughlin and Robert Greene, “The Unintended Consequences of Federal Regulatory Accumulation,” Economic Perspectives, Mercatus Center at George Mason University, May 8, 2014.
 Patrick A. McLaughlin and Oliver Sherouse, RegData US 3.1 Annual (dataset), QuantGov, Mercatus Center at George Mason University, Arlington, VA, 2018, https://quantgov.org/regdata-us/.
 John W. Dawson and John J. Seater, “Federal Regulation and Aggregate Economic Growth,” Journal of Economic Growth 12, no. 2 (2013): 137–77.
 Patrick A. McLaughlin, “What If the US Regulatory Burden Were Its Own Country?,” Mercatus Center at George Mason University, April 26, 2016.
 Coffey, McLaughlin, and Peretto, “The Cumulative Cost of Regulations.”
 Norman V. Loayza, Ana Maria Oviedo, and Luis Serven, “The Impact of Regulation on Growth and Informality: Cross-Country Evidence” (Policy Research Working Paper No. 3623, World Bank, Washington, DC, May 2005).
 Diana Thomas, “Regressive Effects of Regulation” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, 2012).
 Dustin Chambers and Courtney A. Collins, “How Do Federal Regulations Affect Consumer Prices?” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, 2016).
 Keith Hall, “The Employment Costs of Regulation” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, March 2013).
 Dustin Chambers, Patrick A. McLaughlin, and Laura Stanley, “Regulation and Poverty: An Empirical Examination of the Relationship between the Incidence of Federal Regulation and the Occurrence of Poverty across the States” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, 2018).
 Dustin Chambers, Patrick A. McLaughlin, and Laura Stanley, “Barriers to Prosperity: The Harmful Impact of Entry Regulations on Income Inequality,” Journal of Public Choice, online (2018): 1–26.
 Steven Horwitz, “Breaking Down the Barriers: Three Ways State and Local Governments Can Improve the Lives of the Poor” (Mercatus Research, Mercatus Center at George Mason University, Arlington, VA, 2015).
 Patrick A. McLaughlin and Laura Stanley, “Regulation and Inequality: The Regressive Effects of Entry Regulations” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, 2016).
 Patrick A. McLaughlin, “Regulations Contribute to Poverty” (Testimony before the House Committee on the Judiciary, Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Mercatus Center at George Mason University, Arlington, VA, February 24, 2016).
 Dustin Chambers, Patrick A. McLaughlin, and Tyler Richards, “Regulation, Entrepreneurship, and Firm Size” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, 2018).
 James Bailey and Diana Thomas, “Regulating Away Competition: The Effect of Regulation on Entrepreneurship and Employment” (Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, 2015).