From the Globalance Investment Commentary (Wealth Cockpit):
In a recent study, consultancy firm PWC surveyed 1,300 CEOs across 68 countries as to how they view growth prospects for their businesses. Their assessment of the principal risks to economic growth was particularly interesting.
Surprisingly, they did not see rising energy or commodity prices, the level of public debt or faltering banks as constituting the main risks. The biggest headache for CEOs was caused by the inexorable growth of bureaucracy. As much as 72% of the CEOs surveyed claimed that overregulation posed the biggest risk to the growth of their business.
The extent to which regulatory costs place burdens on business in a particular country can only be guessed at. Depending on the survey methodology used and the (in)dependence of the authors, the costs involved are between 1.7% of annual economic output in Switzerland and 10% in the US. In the case of the US, this equates to an annual cost of USD 1,750 billion.
The chart on the right illustrates the increasing level of regulation in the US. In 1913, the US Federal Tax Code was 400 pages long. After the Second World War, the Tax Code exploded in complexity, ballooning to 71,684 pages by 2010. Clearly, coping with all this regulation comes at the expense of business innovation and initiative.
Source: Political Calculations, 2010