Regulation and Growth

This report presents a literature review on the link between regulation and growth. Firstly, it provides an overview of economic regulation. More specifically, it explains why some markets are regulated while others are not, and how governments typically go about controlling markets. Secondly, the theoretical work that has been done to explain the link between regulation and growth along with empirical studies testing for this relationship are presented. It was found in the literature that the level of regulation is an important determinant of productivity growth at the national level through its impact on incentives to invest, innovate or to enter or leave a market.