Understanding Regulatory Environments and their Impact on Economic Change

We propose a framework for evaluating the effectiveness of regulatory activity based on the distinctions among boundary, conduct, and attribute regulation. The standard we use to evaluate the efficiency and effectiveness of regulations creating boundaries, regulating conduct, and defining attributes is whether the regulations are market-enhancing or market-debilitating. We argue that this framework provides a consistent means by which economists and policy observers can evaluate the impact and effectiveness of a wide variety of regulatory initiatives, including antitrust actions, as well as economic and social regulations. To illustrate the utility of our framework, we evaluate recent deregulatory efforts in the telecommunications industry.