Guy

Matt Yglesias on American federalism and regulatory excess:

I wouldn’t disagree with the observation that there are some elements of our economy that are badly over-regulated. It’s much more difficult to start or expand a business than it should be and this is one of the reasons why our economy has gotten so dominated by cookie-cutter chains that have enough scale to amass expertise and legal clout needed to navigate this thicket. There’s more occupational licensing than their needs to be. There’s too much regulation saying that buildings have to be short, or can only occupy so big a percentage of the lot, or have to have so many parking spaces. At the same time that I think the country’s overall policy dynamic is too tilted toward the automobile, the actual vehicle registration process is weirdly cumbersome, and the rules governing auto dealers are positively insane.

But all this malfeasance is done by state and local governments.

Rather than the small scale of the units leading to better policy via competition, what seems to me to happen is that the lack of public attention paid to policymaking at the state, county, and municipal level leads to much more pure interest-group capture than you see on the federal level. Not that interest groups don’t have a lot of clout in federal politics. But the relatively competitive nature of elections and the relatively bright spotlight shown on national politics puts a check on these things. At the state level, bad policy really runs amok. So I wind up being skeptical that you could really improve much of anything even in those areas when I think the libertarian perspective is broadly correct by devolving more authority downward.