This volume is one in a series commissioned by the AEI-Brookings Joint Center for Regulatory Studies to contribute to the continuing debate over regulatory reform. The series will address several fundamental issues in regulation, including the design of effective reforms, the impact of proposed reforms on the public, the political and institutional forces that affect reform, and the effect of globalization on regulation.

Many forms of regulation have grown dramatically in recent decades—especially in the areas of environment, health, and safety. Moreover, expenditures in those areas are likely to continue to grow faster than the rate of government spending. Yet the economic impact of regulation receives much less scrutiny than direct, budgeted government spending. We believe that policymakers need to rectify that imbalance.

The federal government has made substantial progress in reforming economic regulation—principally by deregulating prices and reducing entry barriers in specific industries. For example, over the past two decades consumers have realized major gains from the deregulation of transportation services. Still, policymakers can achieve significant additional gains from fully deregulating other industries, such as telecommunications and electricity.