Subsidies are a commonplace feature of government programs, and can be found in regulatory programs as well as in budget expenditures and in the tax code. An accurate accounting of regulatory subsidies, accessible to the general public, could improve government regulation by helping to ensure that such subsidies are used only when, and to the degree that, they serve a sound public purpose. This is easier said than done, however. This paper explores the concept of a regulatory subsidy and review some examples. A more technical Appendix examines some of the obstacles to creating a clear accounting of regulatory subsidies, and suggest areas where useful studies might be pursued.
March 12, 2012