Purpose

This independent blog collects news about projects or achievements in regulatory reform / better regulation. It is edited by Charles H. Montin. All opinions expressed are given on a personal basis.
Background on regulatory quality, see "Archive" tab. To be regularly informed or share your news, join the Smart Regulation Group on LinkedIn: 1,300 members, or register as follower.

09 February 2011

Business licensing: a concern on both sides of the Atlantic

Our network now comprises an expert in business inspections and licensing reform, Florentin Blanc, who has just drawn our attention to the rise in the number of regulated professions. He points us to a Wall Street Journal article highlighting the "insane proliferation of professional licensing cartels" across American state government and examining some of the political economy behind it, which is that the licensing fees charged by licensing agencies can turn into profit centers reducing the need for more transparent forms of taxation.
This article has naturally sparked a lively discussion in the blogosphere (see example of such a post). The main issue is whether licensing mostly serves as a form of protectionism, allowing veterans of the trade to box out competitors who might undercut them on price or offer new services.
This type of development is of course in contradiction with the principles underlying the recent landmark Executive Order from President Obama which is too general to directly address such an issue. In the European Union, on the contrary, the Services Directive was the starting point of a major review of all regulatory requirements against the criteria of nondiscrimination, necessity and proportionality. This investigation covered different types of requirements such as prior authorisations, registration requirements, territorial restrictions, etc), which may constitute unjustified barriers to the functioning of the Single Market (obstacles to cross-border provision of services). The results to the "mutual evaluation process" have just been published by the Commission (27 January 2011). Merci Florentin !

No comments:

Post a Comment