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Faced With Declining Institutions, Is America Closed for Business?

June 10, 2013, 3:00 PM
Bureaucracy

What's the Latest Development?

A number of indices suggest that America's political institutions are falling in stature (shocker, right?) and that the nation's ability to support entrepreneurs is suffering as a result. "The U.S. has seen a marked deterioration in its World Governance Indicators. In terms of 'voice and accountability,' 'government effectiveness,' 'regulatory quality' and especially 'control of corruption,' the U.S. scores have all gone down since the WGI project began in the mid-1990s." The US currently ranks as the sixth-worst country in which to start a business, requiring 433 days to legally establish a company.

What's the Big Idea?

It has long been known that robust institutions can help struggling nations grow their economy, but little has been said about the ability of institutional reform to boost economic growth in already-established countries. What is mainly at fault, according to Harvard economics professor Niall Ferguson, is needless regulation: "Who benefits from the growth of complex and cumbersome regulation? The answer is: lawyers, not forgetting lobbyists and compliance departments. For complexity is not the friend of the little man. It is the friend of the deep pocket. It is the friend of cronyism."

Photo credit: Shutterstock.com

Read it at the Wall Street Journal

 

Faced With Declining Instit...

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