Regulatory complexity and reform costs — take two

A recent paper, “Network Analysis of the French Environmental Code”, available here, analyzes links in French regulation, finds a rich club of ten codes often cited by all others and shows what regulatory complexity could be interpreted as.

I wrote earlier about reform costs and I believe that regulatory complexity and reform costs are tightly connected. But reform cost is harder than just stating the complexity of a regulatory network. If the network we are discussing has ten major codes that all are referenced too, changes that pertain to them are actually cheaper — so the really high reform costs will occur in regulatory networks that do not exhibit power law structures, or where the core sets of regulation are harder to change. One way of thinking about any regulatory network is that the more connected a law is the harder it is probably to change it – the constitution is harder to change than an environmental protection agency’s guidelines – so we need to measure both regulatory “rigidity” and connectedness to figure out reform costs over time in any arbitrary regulatory network.

The topology of a regulatory network, generally, is a fascinating subject for research. I hope to see more research like this, and one question is if citing another code is the right way to craft edges. I imagine that you could also think about what laws are dispositive and what aren’t, how they relate to each-other and what the scope is.

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