Is Dodd-Frank the Biggest Law Ever?

41 Pages Posted: 31 Jul 2020

See all articles by Patrick A. McLaughlin

Patrick A. McLaughlin

Mercatus Center at George Mason University

Oliver Sherouse

Small Business Administration Office of Advocacy

Mark Febrizio

George Washington University - GW Regulatory Studies Center

M. Scott King

George Mason University, Department of Economics, Students

Date Written: July 20, 2020

Abstract

The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 continued a trend toward lengthier and more complex acts of Congress. We use novel metrics of the size, scope, and complexity of acts of Congress to assess Dodd-Frank’s place in this trend. Our analysis is consistent with the hypothesis that, in terms of its regulatory effects, Dodd-Frank is the biggest act of Congress in recent history and may become the biggest ever. We argue that this trend toward longer and more complex laws can cause deterioration in the quality of the regulations the laws authorize for two procedural reasons. First, a large act can create a regulatory surge that overwhelms the quality control process. Second, because a large act can precipitate the creation of many regulations by different agencies that target the same industry, the agencies create rules in relative ignorance of their potential interactions.

Keywords: Dodd-Frank, financial regulation, complexity of law, scope of law, RegData

JEL Classification: C63, C81, C82, G28, K23

Suggested Citation

McLaughlin, Patrick A. and Sherouse, Oliver and Febrizio, Mark and King, M. Scott, Is Dodd-Frank the Biggest Law Ever? (July 20, 2020). Mercatus Working Paper Series, Available at SSRN: https://ssrn.com/abstract=3664165 or http://dx.doi.org/10.2139/ssrn.3664165

Patrick A. McLaughlin (Contact Author)

Mercatus Center at George Mason University ( email )

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Arlington, VA 22201
United States
(703) 993-9670 (Phone)

HOME PAGE: http://www.patrickamclaughlin.com

Oliver Sherouse

Small Business Administration Office of Advocacy ( email )

409 Third St., S.W.
Washington, DC
United States

Mark Febrizio

George Washington University - GW Regulatory Studies Center ( email )

Washington, DC
United States

M. Scott King

George Mason University, Department of Economics, Students ( email )

Fairfax, VA
United States

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