The Volokh Conspiracy

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Public Opinion about Regulation

Is the publc getting what it wants from the administrative state?


University of Chicago emeritus professor of economics Sam Peltzman has a new paper in the Journal of Law & Economics, "Public Opinion about Regulation," looking at public perceptions of regulation. Here is the abstract:

The paper describes how ordinary citizens view economic regulation and summarizes answers to questions about regulation and regulators since the 1970s from the General Social Survey. The pattern is clear: ordinary citizens are skeptical and wary. They want less regulation and do not trust regulators to do what is right. The mistrust has become stronger over time. However, the public supports environmental and electricity rate regulation. These sentiments are shared across age, sex, race, education, and income groups and the left/right ideological spectrum. The public tends to oppose less traditional regulation, such as wage and price controls, government ownership of some industries, and regulation of steel prices. But there is less consensus across demographic groups: blacks, the less educated, and low-income groups are less hostile, or marginally friendly, to less conventional modes of regulation. The paper concludes by contrasting public opinion with the path of regulation since the 1970s.

And from the body of the paper:

the broad public seems to lean more toward the public choice rather than the public interest view. No single result is definitive, but the pattern is telling: ordinary citizens are not on average confident in regulators, nor do they trust regulators to do what is best for the country. By two to one, they say they want less business regulation. They are also wary of extending the reach of regulation.

This skepticism about regulation is apparently not a new phenomenon and is arguably on the rise. . . .

This skepticism of regulation is not universal, however. Environmental regulation, in particular, seems to be viewed more favorably than some other forms of regulation.

There are exceptions to this general hostility. The middle and lower panels include questions about particular kinds of regulation or government intervention in markets. They are questions of should we or should we not regulate rather than how much. I list the questions according to priors informed by how the typical student in a typical introduction to economics course might respond, that is, probably friendlier to regulation of externalities or natural monopoly than to, say, steel prices. The answers mostly bear out these priors.

For example, the public is nearly unanimous in favoring legal restraint on industrial pollution (see responses to grnlaws). Fans of Coasean bargaining or Elinor Ostrom might take comfort from the diminished support for regulation when the group to be restrained is people (pubdecid) rather than industry. But the overall message is clear: the public likes environmental regulation. The public is also decidedly positive toward regulation of electricity prices, less so toward financial services prices, and negative about steel price regulation. (The first three questions about industry regulation are effectively about price regulation, though they allow a government ownership option.)The public is decidedly hostile to government ownership of banks and electric utilities.

Whether this is due to the apparent need for such regulation, or a lack of examination of the public choice problems that can infect environmental regulation is unclear.

And from Peltzman's conclusion:

This brief tour has shown that public opinion is wary of regulation and skeptical about regulators in general, while making allowance for some particular kinds of regulation. The negative view of regulation is shared broadly across population groups: age, sex, race, education, and income. There is some evidence that this negative view is increasing over time. There is broad consensus favoring environmental and electricity rate regulation. This consensus breaks down for nontraditional government interventions like wage and price controls, maximum hours worked, regulation of bank prices, and government ownership of banks and electric utilities. . . .

I began by noting the muted role assigned to public opinion by interest-group-centric economic theories of regulation. In a way, the evidence here lends weight to those theories. If the general public is wary and skeptical, what has it got? The answer is more regulation, not less. . . .

Not only has the ordinary citizen gotten more regulation rather than less, but the gap between what the public wants and gets seems to be growing over time. This suggests an agenda for further research that might clarify what the public's preference for less regulation means specifically and what obstacles to related changes in policy stand in the way.