RULEOCRACY: States governed by the Democratic Party top the list of regulations and government interventionism

A regulation, understood as "the way in which the state apparatus produces norms that delimit the rules in a certain area and territory," is not bad in itself. However, according to the Mercatus Center of George Mason University, their "accumulation" in a given economy "worsens economic conditions, inadvertently increasing poverty rates, destroying jobs and raising prices."

With this premise, the Mercatus Center set out to study each state in this aspect, with the aim of drawing up a ranking of the most regulated states in the country.

"Jurisdictions that allow regulations to accumulate steadily over the years experience slower economic growth. Other studies indicate that the growth of these regulations is correlated with higher poverty rates, job losses and higher inflation, among other effects," explained the Mercatus Center.

To the surprise of few, four of the five most regulated states are governed by Democrats, while the five least regulated states have Republican administrations.

Democrats shine in the ranking of the most regulated states in the country

From one to forty-eight, since data for Arkansas, West Virginia and the District of Columbia were not available, the Mercatus Center ranked the states on the number of regulations. Passing cleanly, the greater the number, the worse economic conditions, while the fewer the number, the more favorable these conditions become for both citizens and businesses.

The study was conducted by Dr. Patrick A. McLaughlin and Dustin Chambers. The former is the director of policy analysis and a senior research fellow at the Mercatus Center at George Mason University, and the latter is a professor of economics at Salisbury University's Perdue School of Business and a senior fellow at the Mercatus Center.

The study revealed that Democrats govern seven of the ten most regulated states and four of the top five most regulated states. In turn, Republicans govern eight of the ten least regulated states, as well as the five least regulated states in the country.

The crown for the most regulated state went to California, which has 420,434 state regulations, followed by New York (300,095) and New Jersey (296,926).

The top five most regulated states in the country

At the other end of the ranking, Alaska ranked as the least regulated state in the country, with only 64,918 regulations, followed by Montana's 59,654 and North Dakota's 55,561, a state governed by Doug Burgum, who looms as a possible Energy Secretary in an eventual second Trump administration.

The five states with the fewest regulations

“Regulations tend to pile up in every state that doesn't actively try to stop the trend”

VOZ spoke exclusively with Dr. Patrick A. McLaughlin, who explained the impact of excessive regulations on the average citizen.

“I think the average citizen knows that regulations influence higher prices or worse economic growth, the most obvious effect is going to be how over-regulation can hinder job opportunities. Every time someone tries to open up a day-care center or set up a new restaurant, they learn whether their state has been trying to streamline the process, or have just let regulations build up until they simply become insurmountable obstacles,” he said.

At the same time, he pointed out that states with excessive regulations could scare away investments from large and medium-sized companies, given that they seek to “minimize political uncertainty.” 

“If a state has built up a large stockpile of regulations, that creates a lot of uncertainty – when there are so many rules that no one can know them all, you are always at risk of being in violation of something,” he continued.

Finally, he analyzed the fact that Democratic states are in the majority among the most regulated states in the ranking. "I think regulations tend to accumulate in all states that don't actively try to stop or reverse the trend. Texas, for example, is in the top 5 most regulated states, and it's certainly not a Democratic state. However, with some exceptions, it does seem like politicians are less eager to reform the regulatory process in traditionally Democratic states,” he said.

California, the king of the states with the most regulations

The Golden State of Gavin Newsom topped the ranking thanks to its Code of Regulations (CCR), which contains 23,110,146 words.

In terms of its most regulated activities, there were insurance companies and related activities (17,266), utilities (15,996), petroleum and coal products manufacturing (13,698), paper manufacturing (12,985) and chemical manufacturing (11,780).

California has up to three times more regulations on insurance companies than the average of the other states and more than two times for the rest of the industries mentioned.

Regarding the "policy areas most affected by state regulation," industry, trade and development rank first with 167,482 regulations. The state average in this field is 21,261, meaning that California has almost eight times as many regulations in this field as the rest of the states.

Rounding out the list are environmental protection (72,713) and health services (58,951).

A guide to reducing regulatory harm

The Mercatus Center also added to its ranking a best practices guide for legislators to take note of and "improve their regulatory systems" in the relevant states.

While no magic solutions exist, the experts explained that such improvements can be implemented through two mutually non-exclusive paths: regulatory budgets and standard suppression.

A regulatory budget simply involves fixing the number of regulations that the state can have at one time. To do so, one would have to set the target number of regulations to cut and establish a system of "one in and x out." Something similar was applied during the Trump Administration when, for every new regulation, two others were to be eliminated.

True to its name, rule removal is fairly concerned with eliminating existing regulations. However, this can be simplified by stipulating up front that regulations are automatically removed after a period of time unless the legislature explicitly renews them. It's sort of like adding an expiration or sunset date to them.

"If the regulation provides the intended benefit, it need not be eliminated. If the regulation is ineffective or cumbersome, it can be eliminated," the Mercatus Center stated.