Deregulation
Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a result of new trends in economic thinking about the inefficiencies of government regulation, and the risk that regulatory agencies would be controlled by the regulated industry to its benefit, and thereby hurt consumers and the wider economy. Economic regulations were promoted during the Gilded Age, in which progressive reforms were claimed as necessary to limit externalities like corporate abuse, unsafe child labor, monopolization, and pollution, and to mitigate boom and bust cycles. Around the late 1970s, such reforms were deemed burdensome on economic growth and many politicians espousing neoliberalism started promoting deregulation.
The stated rationale for deregulation is often that fewer and simpler regulations will lead to raised levels of competitiveness, therefore higher productivity, more efficiency and lower prices overall. Opposition to deregulation may involve apprehension regarding environmental pollution and environmental quality standards, financial uncertainty, and constraining monopolies.
Regulatory reform is a parallel development alongside deregulation. Regulatory reform refers to organized and ongoing programs to review regulations with a view to minimizing, simplifying, and making them more cost effective. Such efforts, given impetus by the Regulatory Flexibility Act of 1980, are embodied in the United States Office of Management and Budget's Office of Information and Regulatory Affairs, and the United Kingdom's Better Regulation Commission. Cost–benefit analysis is frequently used in such reviews. In addition, there have been regulatory innovations, usually suggested by economists, such as emissions trading.
Deregulation can be distinguished from privatization, which transfers state-owned businesses to the private sector.
By country
Argentina
underwent heavy economic deregulation, privatization, and had a fixed exchange rate during the Menem administration. In December 2001, Paul Krugman compared Enron with Argentina, claiming that both were experiencing economic collapse due to excessive deregulation. Two months later, Herbert Inhaber claimed that Krugman confused correlation with causation, and neither collapse was due to excessive deregulation.Deregulation again become a focus point of Javier Milei presidency since 2023 by reducing the government intervention and simplifying bureaucracy from repealing rent control to liberalizing the communication sector. Deregulation and State Transformation Minister Federico Sturzenegger has stated in 2025 that there will be more red tape cuts in 2025 which include lowering tax to imported cars and cut electric car regulations. The deregulation policies so far has stabilized the economy for the first time with balanced budget and controlled inflation.
Australia
Having announced a wide range of deregulatory policies, Labor Prime Minister Bob Hawke announced the policy of "Minimum Effective Regulation" in 1986. This introduced now-familiar requirements for "regulatory impact statements", but compliance by governmental agencies took many years. The labor market under the Hawke/Keating governments operated under the Prices and Incomes Accord. In the mid-90s John Howard's Liberal Party began deregulation of the labor market with the Workplace Relations Act 1996, going much further in 2005 through its WorkChoices policy. However, this was reversed under the following Rudd Labor government.Brazil
After Dilma's impeachment, Michel Temer introduced a labor reform, besides allowing up to 100% of foreign capital on Brazilian air companies and giving more protection to state-owned enterprises from political pressure.Bolsonaro administration also promoted deregulations, such as Economic Freedom Law, Natural Gas Law, Basic Sanitation Legal Framework, besides allowing the direct sale of ethanol by fuel stations and opening rail transport industry to private investment. and deregulating the use of foreign currency.
Canada
Natural gas is deregulated in most of the country, with the exception of some Atlantic provinces and some pockets like Vancouver Island and Medicine Hat. Most of this deregulation happened in the mid-1980s. Comparison shopping websites operate in some of these jurisdictions, particularly Ontario, Alberta and British Columbia. The other provinces are small markets and have not attracted suppliers. Customers have the choice of purchasing from a local distribution company or a deregulated supplier. In most provinces the LDC is not allowed to offer a term contract, just a variable price based on the spot market. LDC prices are changed either monthly or quarterly.Ontario began deregulation of electricity supply in 2002, but pulled back temporarily due to voter and consumer backlash at the resulting price volatility. The government is still searching for a stable working regulatory framework.
The current status is a partially regulated structure in which consumers have received a capped price for a portion of the publicly owned generation. The remainder has been at market price and there are numerous competing energy contract providers. However, Ontario is installing Smart Meters in all homes and small businesses and is changing the pricing structure to Time of Use pricing. All small volume consumers were scheduled to shift to the new rate structure by the end of 2012.
Alberta has deregulated its electricity provision. Customers are free to choose which company they sign up with, but there are few companies to choose from and the consumer price of electricity has increased substantially as it has in all other Canadian provinces.. Consumers may choose to remain with the public utility at the Regulated Rate Option.
European Union
In 2003, there were amendments to EU directive on software patents.Since 2006, the European Common Aviation Area has given carriers from one EU country the freedom of the air in most others.
Ireland
The taxi industry was deregulated in Ireland in 2000, and the price of a license dropped overnight to €5,000. The number of taxis increased dramatically.However, some existing taxi drivers were unhappy with the change, as they had invested up to €100,000 to purchase licenses from existing holders, and regarded them as assets. In October 2013 they brought a test case in the High Court for damages. Their claim was dismissed two years later.
New Zealand
New Zealand Governments adopted policies of extensive deregulation from 1984 to 1995. Originally initiated by the Fourth Labour Government of New Zealand, the policies of deregulation were later continued by the Fourth National Government of New Zealand. The policies had the goal of liberalizing the economy and were notable for their very comprehensive coverage and innovations. Specific policies included: floating the exchange rate; establishing an independent reserve bank; performance contracts for senior civil servants; public sector finance reform based on accrual accounting; tax neutrality; subsidy-free agriculture; and industry-neutral competition regulation. Economic growth was resumed in 1991. New Zealand was changed from a somewhat closed and centrally controlled economy to one of the most open economies in the OECD. As a result, New Zealand, went from having a reputation as an almost socialist country to being considered one of the most business-friendly countries of the world, next to Singapore. However, critics charge that the deregulation has brought little benefit to some sections of society, and has caused much of New Zealand's economy to become foreign-owned.Russia
Russia went through wide-ranging deregulation efforts in the late 1990s under Boris Yeltsin, now partially reversed under Vladimir Putin. The main thrust of deregulation has been the electricity sector, with railroads and communal utilities tied in second place. Deregulation of the natural gas sector is one of the more frequent demands placed upon Russia by the United States and European Union.United Kingdom
The Conservative government led by Margaret Thatcher started a programme of deregulation and privatization after the party's victory at the 1979 general election. The Building Act 1984 reduced building regulations from 306 pages to 24, while compulsory competitive tendering required local government to compete with the private sector in delivering services. Other steps included express coach, British Telecom, privatization of London bus services, local bus services and the railways. The feature of all those privatizations was that their shares were offered to the general public. This continued under Thatcher's successor John Major, in as much as he narrowly succeeded in gaining an opt out for Britain from the social aspects of the Maastricht Treaty in 1992.From 1997 to 2010, the Labour governments of Tony Blair and Gordon Brown developed a programme called "better regulation". This required government departments to review, simplify or abolish existing regulations, and a "one in, one out" approach to new regulations. In 1997, Chancellor Brown announced the "freeing" of the Bank of England to set monetary policy, so the Bank was no longer under direct government control. In 2006, new primary legislation was introduced to establish statutory principles and a code of practice and it permits ministers to make Regulatory Reform Orders to deal with older laws which they deem to be out of date, obscure or irrelevant. This act has often been criticized and was described in Parliament by Lord Jenkin as the "Abolition of Parliament Act".
New Labour privatized only a few services, such as Qinetiq. But a great deal of infrastructure and maintenance work previously carried out by government departments was contracted out to private enterprise under the public–private partnership, with competitive bidding for contracts within a regulatory framework. This included large projects such as building new hospitals for the NHS, building new state schools, and maintaining the London Underground. These were never privatized by public offer, but instead by tendering commercial interests.