The Regulatory Burden On Businesses In The U.S.

Economix takes aim at a Rick Perry claim that overregulation in the United States, and not cheap labor, is the reason so many jobs have been offshored from the U.S:

Is that statement true? Are American regulations so burdensome that they are driving companies abroad?
Certainly the United States tax code is impenetrably complicated, and companies do have to deal with plenty of regulations. But even so, the United States is far friendlier to business than are emerging markets like India and mainland China, according to international analyses of regulatory climates.
For the last nine years, the World Bank has been grading countries on 10 measures of business regulation: getting electricity, enforcing contracts, protecting investors, dealing with construction permits, trading across borders, registering property, resolving insolvency, paying taxes, getting credit and starting a business.
Based on these criteria, these are the top 10 countries where it is easiest to operate a business:

• Singapore
• Hong Kong
• New Zealand
• United States
• Denmark
• Norway
• United Kingdom
• South Korea
• Iceland
• Ireland

That’s right: The United States comes in fourth.
Hong Kong beats the United States, but mainland China — that bugaboo of American employment protectionists — does not. Instead, China comes in 91st. Despite the higher regulatory burden, American-based multinational companies have increased their employment in China by 161,400 from 2007 to 2008, a gain of about 20 percent, according to the Bureau of Economic Analysis. (The most recent data are for 2008.) In fact, American employment in China rose 77 percent in the prior decade, from 1998 to 2008.

Not only are China and India tough as a regulatory regime, but they are also crazily corrupt. Businesses in India need to operate their own private infrastructure, because the Indian government is too corrupt and dysfunctional to provide reliable utilities.  As for the regulatory burden in the United States, I think the problem is that businessmen love to whine and blame others for a lackluster economy. Government makes a perfectly believable bogeyman, and the echo chamber makes it seem true.