PEW: State Strategies to Help Businesses Launch and Expand

Article Posted on August 16, 2018

By: The Pew Charitable Trusts

State governments can undermine opportunities for investment and job creation when businesses spend too much time or money on inefficient regulatory processes, or when new business projects get delayed because firms don’t understand how to comply with the rules. To address this challenge, state policymakers can focus on two types of reforms. First, they can improve the efficiency of regulatory systems so businesses can comply with the rules in a less costly and time-consuming manner. Second, they can partner with businesses to increase compliance as well as economic opportunity. Together, these changes form a powerful economic development strategy by making it quicker and easier for entrepreneurs to launch a new business or bring an innovative product to market.

Policymakers often focus their efforts on trying to reduce or eliminate requirements. Increasingly, however, they are finding that business leaders are less interested in eliminating regulations outright and more interested in getting help navigating the regulatory process and receiving timely and predictable regulatory decisions.

And businesses aren’t the only beneficiaries. When regulatory systems are functioning well, they help to maintain worker safety, protect public health, and minimize environmental pollution. They also create a more level playing field; businesses that make a good faith effort to play by the rules are not put at a disadvantage compared to competitors who take advantage of dysfunctional regulatory systems to cut corners—and costs.

In fact, improving how states regulate has the potential to be one of the most cost-effective approaches to boosting the economy. While tax incentives—states’ primary economic development approach—cost billions of dollars a year, the results are inconsistent; better regulatory administration, on the other hand, can make government more efficient, providing savings that states can use to lower taxes or to invest in more effective programs…


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