Deregulation, a term which gained widespread currency in the period 1970-2000, can be seen as a process by which governments remove, reduce, or simplify restrictions on business and individuals with the intent of encouraging the efficient operation of markets. Capitalism is the Economic system in which the Means of production are owned by private Persons and operated for Profit and where Anarcho-capitalism (also known as Free-market anarchism) is an individualist anarchist Political philosophy that advocates the elimination Historically corporatism (corporativismo refers to a political or Economic system in which power is held by civic assemblies that represent Economic Libertarianism is a term used by a broad spectrum of political philosophies which prioritize individual Liberty and seek to minimize or even abolish the Liberalism is a broad array of related ideas and theories of Government that consider individual Liberty to be the most important political goal Originally coined by its critics and opponents " neoliberalism " is a label referring to the recent reemergence of Economic liberalism or Classical liberalism Social democracy is a Political ideology of the left and centre-left Classical economics is widely regarded as the first modern school of economic thought. The Austrian School, also known as the “ Vienna School ” or the “ Psychological School ” is a heterodox school of economics that advocates In Economics Keynesian economics (ˈkeɪnziən also Keynesianism and Keynesian Theory) is based on the ideas of twentieth-century British economist Neoclassical economics is a term variously used for approaches to Economics focusing on the determination of prices outputs and income distributions in markets Monetarism is a school of economic thought concerning the determination of national income and monetary Economics. Supply-side economics is an arguably heterodox school of Macroeconomic thought that argues that economic growth can be most effectively created using incentives for New Keynesian economics is a school of contemporary Macroeconomics that strives to provide microeconomic foundations for Keynesian economics. The physiocrats were a group of Economists who believed that the wealth of nations was derived solely from the value of land Agriculture or land development Mercantilism is the idea that a colony should export more goods than it imports and that a colony should sell at higher prices and buy at lower prices Feudalism, a term first used in the early modern period (17th century in its most classic sense refers to a Medieval Europe Political system composed The Age of Enlightenment or The Enlightenment is a term used to describe a phase in Western philosophy and cultural life centered upon the eighteenth century The Industrial Revolution was a period in the late 18th and early 19th centuries when major changes in agriculture manufacturing and transportation had a profound effect on the Adam Smith ( baptised 16 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of Political economy. Milton Friedman (July 31 1912 November 16 2006 was an American Nobel Laureate Economist and Public intellectual. John Maynard Keynes 1st Baron Keynes CB (ˈkeɪnz "cains" (5 June 1883 &ndash 21 April 1946 was a British Economist whose ideas Ayn Rand (ˈaɪn ˈrænd &ndash March 6 1982 born Alisa Zinov'yevna Rosenbaum (Алиса Зиновьевна Розенбаум was a Russian born American John Stuart Mill (20 May 1806 &ndash 8 May 1873 British Philosopher, political economist, civil servant and Member of Parliament, was an influential David Ricardo (18 April 1772 &ndash 11 September 1823 was an English political economist, often credited with systematizing economics and was one of the most influential In international trade the principle of comparative advantage refers to the fact that although one country may have an absolute disadvantage with another value can be created for both The invisible hand is a Metaphor coined by the Economist Adam Smith. Sao Paulo Stock Exchangejpg|thumb| Virtual market arena where buyer and seller are not present and trade via intemediates and electronical information See also the closely related articles Emergence and Self-organization. Supply and demand is an Economic model describing effects on price and quantity in a Market. Economic freedom is freedom to produce trade and consume any goods and services acquired without the use of force fraud or theft A free market is a Market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers Free trade is a system in which the trade of goods and services between or within countries flows unhindered by government-imposed restrictions Freedom of contract or contractualism is the idea that individuals should be free to bargain among themselves the terms of their own contracts without government interference Limited Government is a government structure where any more than minimal governmental intervention in personal liberties and the economy is not usually allowed by Law, usually Property is any physical or virtual entity that is owned by an individual Privatization is the incidence or process of transferring ownership of business from the Public sector (government to the Private sector (business The history of Capitalism dates back to early forms of Merchant capitalism practiced in the Middle East and Western Europe during the Capitalism has been critiqued from many perspectives during its history Anti-capitalism describes a wide variety of movements ideas and attitudes which oppose Capitalism. A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to

Overview

The stated rationale for 'deregulation' is often that fewer and simpler regulations will lead to a raised level of competitiveness, therefore higher productivity, more efficiency and lower prices overall. Productivity in Economics refers to measures of output from production processes per unit of input The term inefficiency has several meanings depending on the context in which its used Allocative inefficiency - Allocative efficiency theory

As a result of deregulation, France Télécom operates phone booth in Wellington, New Zealand. France Télécom () is the main Telecommunication company in France and one of the largest in the world

Deregulation is different from liberalization because a liberalized market, while often having less and simpler regulations, can also have regulations in order to increase efficiency and protect consumer's rights, one example being anti-trust legislation. In general liberalization (or liberalisation) refers to a relaxation of previous government restrictions usually in areas of social or economic policy Consumers refers to individuals or households that use goods and services generated within the economy. A right is a legal or moral Entitlement or Permission. Rights are of vital importance in theories of Justice and deontological ethics United States antitrust law is the body of Laws that prohibits anti-competitive behavior (monopoly and Unfair business practices. However, the terms are often used interchangeably within deregulated/liberalized industries.

A parallel development with 'deregulation' has been organized, ongoing programs to review regulatory initiatives with a view to minimizing, simplifying, and making more cost effective regulations. Such efforts, given impetus by the Regulatory Flexibility Act of 1980, are embodied in the United States Office of Management and Budget's Office of Information and Regulatory Affairs, and the United Kingdom's Better Regulation Commission. The Regulatory Flexibility Act is perhaps the most comprehensive effort by the U The Office of Information and Regulatory Affairs ( OIRA) is an office of the United States Government that Congress established in the 1980 Paperwork The Better Regulation Commission is as Non-departmental public body of the British government independent of any government department but under the oversight of Department Cost-benefit analysis is frequently used in such reviews. Cost-benefit analysis is a term that refers both to a formal discipline used to help appraise or assess the case for a Project or proposal which itself is In addition, there have been regulatory innovations, usually suggested by economists, such as emissions trading. Emissions trading (or emission trading) is an administrative approach used to control Pollution by providing economic Incentives for Academic research on wedding economic theory with regulatory activity continues.

One can distinguish between deregulation and privatization. Privatization is the incidence or process of transferring ownership of business from the Public sector (government to the Private sector (business Privatization can be seen as taking state-owned service providers into the private sector. This can result in making the privatized enterprise more subject to market forces than was the state-owned entity. But the degree to which there is freedom to operate in the market and the extent of competitiveness in the market for the goods and services of the privatized entity or entities may depend on other measures taken in addition to privatization.

In some instances, partial privatization may be selected, where provision of some portion(s) of the state-owned service are provided by private-sector contractors, but the government retains the capacity to self-operate at contract intervals, if it so chooses. An example of partial privatization would be some forms of school bus service contracting, such as arrangements where equipment and other resources purchased with government capital funds are used by the contractor for a period of time in providing services, but ownership is retained by the governmental unit. A school bus contractor is a private company or proprietorship which provides School bus service to a school district or non-public school In such situations the arrangement can be seen as a sort of contracting out of functions for which the government takes responsibility.

One influential measure of worldwide business regulations that has inspired mostly deregulation but also in some instances increased regulations is the Ease of Doing Business Index. The Ease of Doing Business Index is an index created by the World Bank.

Case study: United States

The experience of the United States offers a broad view of modern deregulation, as many service industries were effectively deregulated beginning in 1971. Studies show that transportation deregulation has increased GDP by up to 3% annually. ^[1] During deregulation of Savings and Loan associations, about $160 billion was lost - $124. A savings and loan association, also known as a thrift, is a Financial institution that specializes in accepting Savings deposits and making Mortgage 6 billion by the US Government - and re-regulation was enacted. In the electricity area, the process is under debate due to setbacks like the California energy crisis. The California electricity crisis (also known as the Western U

History of regulation

Many industries in the United States became regulated by the federal government in the late 19th and early 20th century. Entry to some markets was restricted in order to stimulate and protect the initial investment of private companies into infrastructure to provide "public" services, such as water, electric and communications utilities. With entry of competitors highly restricted, monopoly situations were created, necessitating price and economic controls to protect the public. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient Other forms of regulation were motivated by what was seen as corporate abuse of the public interest by businesses already extant, such as occurred with the railroads following the era of the so-called robber barons. The term robber baron (Raubritter dates back to the twelfth and thirteenth centuries originally referring to certain Feudal Lords In the first instance, as markets matured to where multiple providers could be financially viable offering similar services, prices determined by competition were seen as more favorable than those set by regulatory process.

One problem that encouraged deregulation was the way in which the regulated industries often controlled the government regulatory agencies, using them to serve the industries' interests. This article is for the legal term For regulation of genes see Regulation of gene expression. Even where regulatory bodies started out functioning independently, a process known as regulatory capture often sees industry interests come to dominate those of the consumer. Regulatory capture is a term used to refer to situations in which a Government regulatory agency created to act in the public interest instead acts in favor of the commercial A similar pattern has been observed with the deregulation process, itself often effectively controlled by the regulated industries through lobbying the legislative process. Such political forces, however, exist in many other forms for other "special interest" groups.

Deregulation 1970-2000

'Deregulation' gained momentum in the 1970s, influenced by research at the University of Chicago and the theories of Ludwig von Mises, Friedrich von Hayek, and Milton Friedman, among others. The University of Chicago is a Private university located principally in the Hyde Park neighborhood of Chicago. Ludwig Heinrich Edler von Mises (ˈluːtvɪç fɔn ˈmiːzəs ( September 29, 1881 – October 10, 1973) was an Austrian Friedrich August von Hayek CH ( May 8, 1899 March 23, 1992) was an Austrian British Economist Milton Friedman (July 31 1912 November 16 2006 was an American Nobel Laureate Economist and Public intellectual. Two leading ‘think tanks’ in Washington, the Brookings Institution and the American Enterprise Institute, were active in holding seminars and publishing studies advocating deregulatory initiatives throughout the 1970s and 1980s. The Brookings Institution is a nonprofit public policy organization based in Washington D The American Enterprise Institute for Public Policy Research (AEI is a conservative Think tank, founded in 1943 Alfred E. Kahn played an unusual role in both publishing as an academic and participating in the Carter Administration's efforts to deregulate transportation. Alfred E Kahn (1917- is an American professor and expert in Airline regulation.

The first comprehensive proposal to "deregulate" a major industry in the United States, transportation, originated in the Richard Nixon Administration and was forwarded to Congress in late 1971. ^[2] This proposal was initiated and developed by an interagency group in which the Council of Economic Advisors (represented by Hendrik Houthakker and Thomas Gale Moore), the White House Office of Consumer Affairs (represented by Jack Pearce), The Department of Justice, the Department of Transportation, The Department of Labor, and other agencies participated (Rose, et al, pp 152-160).

The proposal addressed both rail and truck transportation, but not air carriage. (92d Congress, Senate Bill 2842) The developers of this legislation in this Administration sought to cultivate support from commercial buyers of transportation services, consumer organizations, economists, and environmental organization leaders. (Rose, et al, pp 154-156) This 'civil society' coalition became a template for coalitions influential in efforts to deregulate trucking and air transport later in the decade.

After Nixon left office, the Gerald Ford presidency, with the allied interests, secured passage of the first significant change in regulatory policy in a pro-competitive direction, in the Railroad Revitalization and Regulatory Reform Act of 1976, Pub. Gerald Rudolph Ford Jr (July 14 1913 December 26 2006 was the thirty-eighth President of the United States, serving from 1974 to 1977 and the fortieth Vice President The Railroad Revitalization and Regulatory Reform Act of 1976, Pub L. 94-210. President Jimmy Carter devoted substantial effort to transportation deregulation, and worked with Congressional and civil society leaders to pass the Airline Deregulation Act (October 24, 1978), Staggers Rail Act (signed October 14, 1980), and the Motor Carrier Act of 1980 (signed July 1, 1980). James Earl "Jimmy" Carter Jr (born October 1 1924 was the thirty-ninth President of the United States, serving from 1977 to 1981 and the recipient of the 2002 The Airline Deregulation Act (or ADA) is a United States federal law signed into law on October 24, 1978. The Staggers Rail Act of 1980 (See Public Law 96-448 signed into law by President Jimmy Carter on October 14, The Motor Carrier Regulatory Reform and Modernization Act, more commonly known as the Motor Carrier Act of 1980 (MCA is a federal law of the United States which deregulated

These were the major "deregulation" acts in transportation. They set the general conceptual and legislative framework which has replaced the regulatory systems put in place between the 1887 and the 1930s. The dominant common theme of these Acts, as evidenced in the articles individually treating these Acts in this encyclopedia, was to lessen Barriers to entry in transport markets and promote more independent, competitive pricing among transport service providers, substituting the freed-up competitive market forces for detailed regulatory control of entry, exit, and price making in transport markets. In Economics and especially in the theory of Competition, barriers to entry are obstacles in the path of a firm which wants to enter a given Market Thus the term 'deregulation' arose, though regulations to promote competition were put in place.

A series of enactments were needed substantially to work out the process of encouraging competition in transportation. Interstate buses were addressed in 1982, in the Bus Regulatory Reform Act of 1982. Freight forwarders (freight aggregators) got more freedoms in the Surface Freight Forwarder Deregulation Act of 1986. The Surface Freight Forwarder Deregulation Act of 1986 Public Law 99-521 is a Federal law of the United States which eliminated federal regulation of prices services and entry as As many states continued to regulate the operations of motor carriers within their own state, the intrastate aspect of the trucking and bus industries was addressed in the Federal Aviation Administration Authorization Act of 1994, which provided that "a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier. " 49 U. S. C. 14501(c)(1) (Supp. V 1999).

Ocean transportation was the last to be addressed. This was done in two steps, the Ocean Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998. These acts were less thoroughgoing than the legislation dealing with U. S. domestic transportation, in that they left in place the "conference" system in international ocean liner shipping, which historically embodied cartel mechanisms. However, these acts permitted independent rate making by conference participants, and the 1998 Act permitted secret contract rates, which tend to undercut collective carrier pricing. According to the United States Federal Maritime Commission, in an assessment in 2001, this appears to have opened up substantial competitive activity in ocean shipping, with beneficial economic results. The Federal Maritime Commission (FMC is an independent federal agency based in Washington D

The Emergency Natural Gas Act (signed February 2, 1977) was a mix of regulation in response to OPEC price hikes and deregulation and the 1973 oil crisis in the U. The Organization of the Petroleum Exporting Countries ( OPEC) is a Cartel of thirteen countries made up of Algeria, Angola, Ecuador The 1973 oil crisis began on October 17 1973 when the members of Organization of Arab Petroleum Exporting Countries (OAPEC consisting of the Arab members of S. The Airline Deregulation Act is also a notable example. The Airline Deregulation Act (or ADA) is a United States federal law signed into law on October 24, 1978. Its reintroduction of competitive market forces to the heavily regulated commercial airline industry was highly successful.

Communications in the United States (and internationally) is an area in which both technology and regulatory policy have been in flux. Rapid development of computer and communications technology – particularly the internet – have increased the size and variety of communications offerings. One can see an emerging era in which wireless, traditional landline telephone, and cable companies increasingly invade each others’ traditional markets and compete across a broad spectrum. The Federal Communications Commission and Congress appear to be attempting to facilitate this evolution. In mainstream economic thinking, development of this competition would militate against detailed regulatory control of prices and service offerings, and hence favor ‘deregulation’ as to prices and entry into markets. See for this line of thinking Crandall, “Competition and Chaos – U. S. Telecommunications Since the 1996 Telecom Act”, Brookings Institute, 2005. On the other hand, there exists substantial concern about concentration of media ownership resulting from relaxation of historic controls on media ownership designed to safeguard diversity of viewpoint and open discussion in the society, and about what some perceive as high prices in cable company offerings at this point. See for further development of this area Telecommunications Act of 1996 and Concentration of media ownership. The Telecommunications Act of 1996 was the first major overhaul of United States Telecommunications law in nearly 62 years amending the Communications Act of Concentration of media ownership (also known as media consolidation) is a commonly used term that refers to the majority of the media outlets being owned by a small number of

Deregulation by Countries

Argentina

Argentina underwent heavy economic deregulation, privatization, and had a fixed exchange rate during the Menem administration (1989–1999). For a topic outline on this subject see List of basic Argentina topics. Privatization is the incidence or process of transferring ownership of business from the Public sector (government to the Private sector (business In Finance, the exchange rates (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how Carlos Saúl Menem Akil (born July 2, 1930) was President of Argentina from July 8, 1989 to December 10, 1999

Australia

Australia was an early leader in deregulation with a broad program of deregulation beginning in the early 1980s. For a topic outline on this subject see List of basic Australia topics. Having announced a wide range of deregulatory policies, Prime Minister Bob Hawke announced the policy of 'Minimum Effective Regulation' in 1986. Robert James Lee (Bob Hawke, AC (born 9 December 1929 was the 23rd Prime Minister of Australia and longest serving Australian Labor Party Prime Minister Year 1986 ( MCMLXXXVI) was a Common year starting on Wednesday (link displays 1986 Gregorian calendar) This introduced now familiar requirements for 'regulatory impact statements' but it took many years before the policy was complied with by government agencies. Australia experienced deregulation of their labour market during the late 1980s under Hawke/Keating Labor government's. Since then the country has had extensive deregulation of their labour market since 2005. This process was made under John Howard's Liberal Party of Australia. See also Howard Government John Winston Howard AC (born 26 July 1939 was the 25th Prime Minister of Australia from 11 March The Liberal Party of Australia is an Australian political party. In 2007, the Rudd Labor Government promised extensive deregulation, particularly in the business sector, even appointing Lindsay Tanner Minister for Finance and Business Deregulation. The First Rudd Ministry ( Australian Labor Party) is the 65th Australian ministry. Lindsay James Tanner (born 24 April 1956) is an Australian politician with the Labor Party, and Federal Finance Minister Shortly afterwards it announced it would regulate to ban plastic bags in supermarkets.

Canada

The province of Ontario attempted to in 2002 but since pulled back due to voter and consumer backlash at the resulting price chaos. Ontario (ɒnˈtɛrioʊ is a province located in the central part of Canada, the largest by population and second largest after Quebec The government is still searching for a stable working regulatory framework. See Ontario electricity policy for more. Ontario electricity policy refers to plans legislation incentives guidelines and policy processes put in place by the Government of the Province of Ontario, Canada, to address

The province of Alberta has deregulated their electricity provision. Customers are free to choose which company they sign up with. However there are few companies to choose from and the price of electricity has increased substantially for consumers because the market is too small to support competition.

Former Premier Ralph Klein based the entire deregulation scheme on the Enron model, and continued with it even after it was shown that the Enron guys were NOT "the smartest guys in the room.

European Union

• 2003 Corrections to EU directive about software patents
• Deregulation of the air industry in Europe in 1992 gave carriers from one EU country the right to operate scheduled services between other EU states. Software patent does not have a universally accepted definition

Japan

Since the economic bubble in 1990s collapsed, the Japanese government has seen deregulation as an effective way to lift its economy because it has a huge deficit and cannot make a large tax cut. A tax cut is a reduction in taxes. Economic stimulus via tax cuts along with interest rate intervention and deficit spending are one of the central tenets of Keynesian economics

New Zealand

Due to the deregulation of the postal sector, several postal operators can install mail collection boxes in New Zealand’s streets.

See also: Economy of New Zealand

New Zealand has had extensive deregulation since 1984. The Economy of New Zealand is a Market economy which is greatly dependent on international trade mainly with Australia, the United States, New Zealand is an Island country in the south-western Pacific Ocean comprising two main landmasses (the North Island and the South Island It was instigated by the Labour Party. The New Zealand Labour Party is a New Zealand political party

Russia

Russia went through wide-ranging deregulation (and concomitant privatization) efforts in the late 1990s under Yeltsin, now partially reversed under Putin. Russia (Россия Rossiya) or the Russian Federation ( Rossiyskaya Federatsiya) is a transcontinental Country extending Privatization is the incidence or process of transferring ownership of business from the Public sector (government to the Private sector (business Boris Nikolayevich Yeltsin () (1 February 1931 23 April 2007 was the first President of the Russian Federation, serving from 1991 to 1999 Vladimir Vladimirovich Putin (; born 7 October 1952 in Leningrad, USSR; now Saint Petersburg, Russia was the second President of Russia The main thrust of deregulation has been the electricity sector (see Unified Energy System), with railroads and communal utilities tied in the second place. The Unified Energy System (OAO RAO UES of Russia ЕЭС России or Единые Энергетические Системы was an Electric power Holding company Deregulation of natural gas sector is one of the more frequent demands placed upon Russia by the United States and European Union. OJSC Gazprom, (Газпром long version Открытое Aкционерное Oбщество Газпром sometimes transcribed as Gasprom is the largest Russian company The United States of America —commonly referred to as the The European Union ( EU) is a political and economic union of twenty-seven member states, located primarily in

United Kingdom

The United Kingdom has developed a programme of better regulation since 1997. The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located The Better Regulation Commission is as Non-departmental public body of the British government independent of any government department but under the oversight of Department This has developed to include a general programme for government departments to review, simplify or abolish their existing regulations, and a "one in, one out" approach to new regulations. In 2006, new primary legislation is proposed (a Legislative and Regulatory Reform Bill) which is intended to establish statutory principles and a code of practice.

Related Legislation

• 1976 - Hart-Scott-Rodino Antitrust Improvements Act PL 94-435
• 1977 - Emergency Natural Gas Act PL 95-2
• 1978 - Airline Deregulation Act PL 95-50
• 1978 - National Gas Policy Act PL 95-621
• 1980 - Depository Institutions Deregulation and Monetary Control Act PL 96-221
• 1980 - Motor Carrier Act PL 96-296
• 1980 - Regulatory Flexibility Act PL 96-354
• 1980 - Staggers Rail Act PL 96-448
• 1982 - Garn - St Germain Depository Institutions Act PL 97-320
• 1982 - Bus Regulatory Reform Act PL 97-261
• 1989 - Natural Gas Wellhead Decontrol Act PL 101-60
• 1992 - National Energy Policy Act PL 102-486
• 1996 - Telecommunications Act PL 104-104
• 1999 - Gramm-Leach-Bliley Act PL 106-102
• 2002 - Ontario Bill 210- Electricity Supply, Pricing and Conservation Act

See also

• Public service company
• Electricity provider switching
• Stranded costs

References

• Barnum, John W. "What Prompted Airline Deregulation 20 Years Ago?," Presentation to the Aeronautical Law Committee of the Business Law Section of the International Bar Association, September 15, 1998. Available at [1]
• Crandall,Robert “Competition and Chaos – U. S. Telecommunications Since the 1996 Telecom Act”, Brookings Institute, 2005.
• Derthick and Quirk, The Politics of Deregulation, Brookings Institution, 1985.
• Kahn, Alfred E. "Airline deregulation" in Concise Encyclopedia of Economics.
• Moore, Thomas Gale. "Rail and Truck Reform: The Record So Far. " Regulation. November/December 1988.
• Robyn, Dorothy, Braking the Special Interests, University of Chicago Press, 1987

External links

• Jump, Jive an’ Reform Regulation: How Washington Can Take a Swing at Regulatory Reform (CEI, 2000) by Clyde Wayne Crews, Jr.
• Powering a Generation of Change, National Museum of American History
• Deregulation of Business, by Ekaterina Zhuravskaya and Evgeny Yakovlev
• About Energy Deregulation, by Multiut Corporation, Nachshon Draiman CEO
• World Bank "Doing Business project"
• From Economic Deregulation to Safety Regulation Department of Transportation comprehensive study indicating, among other things, that transport deregulation reduced distribution costs in the United States from about 14% of gross domestic product to under 11% (If this measure is selected, current dollar savings can be calculated by multiplying current GDP by @3%).