Regulations as Infrastructure

The regulatory state is very good at construction. It needs a maintenance department.

Jul 23, 2026

I recently gave a talk for the San Mateo County Economic Development Association (SAMCEDA) in San Mateo County, California. The talk began with a discussion of a bridge. Yes, I didn’t mention regulations for at least 30 seconds.

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The video is the talk as delivered. The essay below develops the same argument in a little more detail.

The infrastructure nobody notices

When a bridge works, nobody notices it.

People cross it on the way to work, school, a doctor’s appointment, or dinner. Trucks carry goods over it. Emergency vehicles use it. Thousands of plans depend on it, but almost nobody pauses to say, “Thank you, bridge.”

We notice the bridge when it stops working.

A closure creates detours. A weight restriction disrupts deliveries. Deferred maintenance becomes an emergency repair, usually at a much higher cost than ordinary upkeep would have required.

Regulations operate in much the same way—as infrastructure that people rarely notice.

They are part of the infrastructure through which economic and social activity moves. They establish rights, responsibilities, standards, permissions, and prohibitions. They can protect health and safety, make transactions more predictable, and create the conditions under which markets function.

Regulation is, in that sense, part of the operating system of the economy.

Calling regulation infrastructure does not mean that every regulation is good, any more than calling roads infrastructure means every road was well designed. It means that regulations form a durable system whose performance depends on its design, condition, and maintenance.

And like roads and bridges, regulatory infrastructure deteriorates when governments concentrate on construction and neglect upkeep.

Government is organized for construction

Most governments have a process for creating new regulations.

There may be a proposal, public notice, stakeholder consultation, a hearing, legal review, and sometimes an economic analysis. That machinery may work imperfectly, but it exists.

Far fewer governments have an equally serious process for rules that are already on the books.

Once adopted, a regulation can remain in force long after the technology, industry, risk, or administrative practice that gave rise to it has changed. The rule persists because persistence is the default.

That does not mean old regulations are necessarily bad. Some old rules remain essential. Others may be outdated, duplicative, contradictory, unnecessarily prescriptive, or simply ineffective.

The deeper problem is that, without a maintenance process, governments often do not know which category a rule belongs in.

Rulemaking is treated as a series of individual construction projects. But the regulatory code is a portfolio of accumulated infrastructure.

Every new rule tends to have a sponsor. The accumulated system rarely has an owner.

Good regulatory management is not anti-regulation. It is anti-neglect.

An inventory is not a verdict

Years ago, I created RegData to quantify regulation at the federal, state, and local levels.

At the federal level, the number of regulatory restrictions grew from roughly 400,000 in 1970 to around 1.1 million in the figures I used for the talk. California’s regulatory code contained approximately 420,000 restrictions. Idaho’s contained about 31,000.

Those numbers do not prove that California’s rules are bad or Idaho’s are good. A restriction count is not a benefit-cost analysis, a measure of enforcement quality, or a ranking of regulatory performance.

It is an inventory.

No serious transportation department would say, “Counting bridges tells us nothing about their structural condition, so there is no reason to count them.”

The inventory is what makes the next questions possible:

Which bridges are in good condition? Which need repair? Which are heavily used? Which are redundant? Which were designed for traffic patterns that no longer exist?

The same logic applies to regulations.

How many requirements exist? Which agency owns each one? When was it last reviewed? Does it still address the problem for which it was created? Does it conflict with another rule? Could its objective be achieved more simply?

Counting is not the end of regulatory management. But it is difficult to imagine competent management beginning without it.

And the size comparison raises an unavoidable question: if one jurisdiction’s regulatory infrastructure is many times larger than another’s, does it have a maintenance system that is correspondingly more serious?

Having the most bridges would not, by itself, prove that a state had the best transportation system. Having the most regulations does not prove that a jurisdiction has the best regulatory system.

Condition matters more than volume.

Rusty bolts

Some of the clearest evidence of regulatory neglect comes from provisions that seem almost comically outdated.

San Mateo County, for example, has a dedicated licensing chapter for fortune telling, covering activities such as clairvoyance, palmistry, astrology, spiritism, and fortune telling. The material I reviewed for the talk set the licensing fee at $2,400 per year, payable quarterly in advance.

I am not here to defend fortune tellers. But the provision raises reasonable maintenance questions.

What problem is the license intended to solve? If the objective is preventing fraud, why is a special occupational license preferable to generally applicable anti-fraud laws? Why was that particular fee selected? What evidence would tell us whether the rule works?

California’s regulations also retain real-estate rescission language involving the telegraph. Another filing rule still contemplates paper copies prepared for placement in a manila folder and attached with an Acco fastener—a piece of office hardware that much of the modern economy has managed to leave behind.

Are telegraphs responsible for California’s housing shortage? No.

Are Acco fasteners the principal obstacle to innovation? Of course not.

But the smallness of these examples is part of the point. Each provision is too minor to provoke a major reform campaign. Each can remain untouched for decades because the cost of fixing it appears larger than the immediate benefit.

A single rusted bolt does not prove that a bridge is failing. But enough rusted bolts, obsolete fittings, and layers of improvised patchwork tell us something important about the maintenance culture.

The provisions are not necessarily the disease. They are diagnostic evidence.

The Third Order problem

Regulators generally make decisions one rule at a time.

Businesses do not comply with rules one at a time.

A business complies with Rule A, Rule B, Rule C, and hundreds or thousands of other requirements simultaneously. Those requirements may come from different agencies and levels of government. They may use different definitions, deadlines, applications, reporting systems, and enforcement practices.

The first-order question surrounding a regulation is usually: What problem is this rule intended to solve?

The second-order question is: How will regulated parties respond? Will they alter a product, hire compliance personnel, change a production process, delay a project, or avoid a market?

The third-order question is: What happens when those responses interact with the rest of the regulatory system?

A rule can have a sensible purpose in isolation and still contribute to a dysfunctional portfolio. Requirements can overlap or contradict one another. Sequential approvals can turn several modest delays into a multiyear process. Fixed compliance costs can be manageable for established firms and prohibitive for potential entrants.

The burden of the system can therefore be greater than the sum of its individual rules.

This is one reason regulatory accumulation is easy to miss. Each rule has a rationale. Each burden may appear modest when viewed alone. By the time the cumulative effects emerge—in the form of fewer startups, slower projects, higher prices, or investment diverted toward compliance—no single regulation appears responsible.

Government manages the flow of new rules.

The public experiences the stock.

What regulatory maintenance looks like

Treating regulation as infrastructure points toward a practical management system. It requires at least three disciplines.

1. Build an inventory

A jurisdiction should know what it owns.

That means more than producing a page count. Governments should identify regulatory requirements, permits, forms, responsible agencies, affected activities, and the date on which each provision was last reviewed or amended.

An inventory does not prejudge whether a rule should stay or go. It creates the information necessary to make that determination.

2. Inspect and repair the existing stock

Old regulations should be reviewed systematically rather than only when a controversy erupts.

The relevant question is not simply whether a rule is old. It is whether the rule still works.

A review might conclude that a regulation should be preserved, strengthened, clarified, made technologically neutral, simplified, consolidated with another provision, or retired altogether.

Physical infrastructure inspection does not begin with a presumption that every old bridge must be demolished. Regulatory inspection should not begin with a presumption that every old rule must be repealed.

But neither should age confer permanent immunity from scrutiny.

3. Establish budget discipline

Without a constraint on regulatory growth, the stock will usually continue to expand.

A regulatory budget can take several forms. The basic idea is to require policymakers to recognize that regulatory capacity is finite and that new obligations should prompt examination of existing ones.

When an agency proposes a new requirement, it might be required to identify outdated requirements that can be simplified, consolidated, or removed. The point is not to claim that every new rule is bad. It is to make maintenance part of the rulemaking process.

British Columbia provides the most important example. The province created an inventory, established a goal of reducing regulatory requirements by roughly one-third, ultimately reduced the stock by more than one-third, and then used regulatory-budget discipline to keep it from simply growing back.

Research I coauthored on the British Columbia experiment estimated that the reform increased the province’s economic growth rate by about one percentage point.

The precise numerical target is less important than the institutional lesson: maintenance happened because someone was made responsible for it.

Without a mechanism that assigns that responsibility, the unglamorous work of regulatory upkeep will almost always lose out to more visible priorities.

Maintenance is not demolition

The familiar political framing pits regulation against deregulation.

The infrastructure framing suggests a more useful distinction: management versus neglect.

Maintaining a bridge may mean replacing it. It may also mean strengthening it, repairing its surface, changing its load rating, redesigning an interchange, or adding new safety features.

Regulatory maintenance should allow for the same range of outcomes.

Some rules should be removed. Some should be simplified. Some should be combined. Some should be updated for modern technology. Some may need to be strengthened because they no longer provide the protection the public expects.

The goal is not the smallest possible regulatory code.

The goal is a regulatory system that delivers public value without imposing unnecessary cost, delay, complexity, or uncertainty.

Indeed, regular review can strengthen the legitimacy of regulation. People are more likely to trust a system that can explain why its rules exist, whether they work, and how they have been updated in response to changing circumstances.

A government should be able to answer four basic questions about its regulatory infrastructure:

What do we own?

What condition is it in?

Which parts remain essential?

What is our maintenance plan?

Failure is usually quiet

A neglected bridge can eventually fail in a dramatic and visible way.

Regulatory infrastructure more often fails quietly.

The startup that is never formed does not issue a press release. The housing project abandoned during predevelopment never appears in the housing stock. The investment redirected from innovation to compliance is difficult to observe. The price increase caused by an accumulation of small requirements arrives without an itemized regulatory receipt.

That invisibility is one reason neglect can persist for so long.

But invisible costs are still costs.

A jurisdiction that continually adds to its regulatory infrastructure without inventorying, inspecting, and maintaining what it has already built should expect deterioration. It may not arrive as a sudden collapse. It will show up as fewer entrants, slower approvals, delayed investment, higher prices, and slower growth.

Regulations are infrastructure.

And infrastructure fails when it is only built and never maintained.

Thanks to SAMCEDA for inviting me to develop and present this argument.

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