Glossary

Deregulation

The reduction or removal of government rules governing business and economic activity.

Also called: regulatory reform, regulatory rollback, cutting red tape

Deregulation is the process of repealing or reducing government regulations on industry and markets. It can involve removing price and entry controls, simplifying rules or ending whole regulatory regimes.

A major wave occurred in the 1970s and 1980s with the airline (1978), trucking, rail, telecommunications, banking and energy industries, under presidents of both parties, with Jimmy Carter's Airline Deregulation Act as a notable example. Economists generally credit airline and trucking deregulation with lower prices and more competition. Later efforts include rollbacks of environmental, financial and labor rules by successive administrations, using the Congressional Review Act, executive orders and rescinding rules; some presidents have adopted "one in, two out" policies for new regulations.

Supporters argue that regulations impose costs that exceed benefits, hamper innovation and small businesses and are often the product of regulatory capture. Critics argue that deregulation of finance contributed to the 2008 crisis and that rollbacks of environmental and safety rules harm health and workers; they also say the costs of regulation are overstated. The debate frequently turns on cost-benefit analysis and on whether markets self-correct. The term is often contrasted with "better regulation," which proposes reform rather than reduction.

Last reviewed November 8, 2026

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Related terms

Regulatory capture The tendency of a regulatory agency to come under the influence of the industry it is supposed to oversee, serving it more than the public. Administrative state A term for the federal agencies that make and enforce rules with binding effect, often seen as a fourth branch of government. Cost-benefit analysis A method that weighs the estimated costs and benefits of a policy or regulation, usually in dollar terms, to judge whether it is worthwhile. Congressional Review Act A 1996 law letting Congress overturn federal agency rules by a simple-majority resolution that is immune to Senate filibuster. Crony capitalism An economy in which success depends on close ties between business leaders and government officials, not on competition.