Short answers, pulled from the story.
Regulatory economics is the application of law by government or regulatory agencies for purposes including remedying market failure, protecting the environment, and managing economic activity. Its ideal goal is to ensure the delivery of safe and appropriate services while not discouraging the effective functioning and development of businesses.
Regulatory capture is the process through which a regulatory agency created to act in the public interest instead advances the commercial or special concerns of the industry it was meant to regulate. It occurs because firms in a regulated industry have a concentrated financial stake in shaping the rules, while individual consumers have little personal incentive to influence regulators.
The Administrative Procedure Act, enacted by Congress in 1946, established uniform procedures for federal agencies to issue regulations and adjudicate claims. It also set forth the process for judicial review of agency action.
Strong regulatory environments are associated with improved investor protection, reduced information asymmetries, and greater confidence in market institutions, all of which facilitate capital flows across borders. Research by Haddad et al. in 2026 used the Scaled Correlation Index to show that variations in regulatory quality influence how deeply a country's equity markets are embedded in the global financial system.
According to the World Bank's Doing Business database, starting a business takes an average of 19 working days in OECD countries and an average of 60 days in Sub-Saharan Africa. The cost as a percentage of gross national product, not including bribes, is 8% in the OECD and 225% in Africa.
President Ronald Reagan, during his two terms from 1981 to 1989, pursued Reaganomics, which combined income and corporate tax cuts with deregulation and reduced government spending. Many economists have concluded that Reagan-era deregulation policies contributed to the Savings and Loan Crisis of the late 1980s and 1990s.