Analysen und Berichte

Enste and Wicher suggest that political regulation is always wealth-reducing. However, their analysis neglects various relevant determinants of the wealth indicator. Economic wealth cannot be estimated from the quantity of regulation, as quality and other aspects matter. Hence, political acumen is required. Enste and Wicher reply to criticism of the regulation index and the analysis of the impact of regulation on education. They argue that they neither ignore the positive effects of regulation (taken into account with the data on good governance indicators) nor demand a zero regulation policy. Instead, the main goal of the analysis is to provide an international comparison for “better regulation”.     

Regulierung, Bildung und Wohlstand — der IW-Regulierungsindex

Education is considered as a key factor for the future development of an economy. Therefore, a well-designed education system is indispensable for a society to maintain or increase its welfare. The regulation of the education system is one of the main tools to which a government has recourse in order to infl uence the system. By using the regulation index created by the Cologne Institute for Economic Research (Institut der deutschen Wirtschaft (IW) K?ln), it is possible to quantify this regulation and to identify positive or negative trends. The authors show that a higher extent of regulation usually correlates with negative economic performance. In terms of education, the results indicate that a higher extent of regulation has a negative impact on the labour market, threatening sustainable long-term development of the economy.