Socio-economic effects of economic regulations

Regulation is to monitor and control of private sector economic activities by government for the benefit of public interest. Market failures are tried to be minimized by regulation. Regulation is one of the important policy tools in the process of determining and supervising the rules that will ensure the orderly functioning and development of the market. Regulation is used to ensure efficiency in the economy, to maintain public order and to optimize social welfare. The aim of this study is to investigate the effects of economic regulations on socioeconomic structure. Five models were developed to analyse the effects of economic regulations on economic growth, employment, foreign direct investment, income redistribution and exports. Annual data of selected developed and developing countries for the period 2000-2021 are examined by panel data analysis method. The findings of the study shows that there is no relationship between economic regulation and economic growth in the developed country sample. In the developing country sample, increases in economic regulations have a positive impact on economic growth. In the employment model, no relationship is found between economic regulation and employment in the developed country sample. The finding shows that an increase in economic regulation has a negative impact on employment in the developing country sample. In the foreign direct investment model, no relationship is found determined between economic regulation and foreign direct investment in the developed country sample. The findings show that increases in economic regulations have a positive effect on foreign direct investment in the developing country sample. In the export model, it is found that increases in economic regulations have a negative effect on exports in the developed country sample. In the developing country sample, the finding exhibits that increases in economic regulations have a positive effect on exports. In the income redistribution model, it is found that increases in economic regulations have a negative effect on income distribution in the developed country sample. No relationship is found between income distribution and economic regulations in the developing country sample. Based on the findings of the study, policy recommendations are developed for having more positive effect of economic regulations on the socioeconomic structure.