Dr Oliver Marc Hartwich, a Research Fellow at the Centre for Independent Studies, says we don't know because we haven't measured the impact of bureaucracy on business. He says we need to measure it so we can reduce the cost of compliance with the various regulations. He says red tape clogs up the system, harming economic growth, much like pollution can harm our natural environment.
In his paper "Towards a Red Tape Trading Scheme: Treating Excessive Bureaucracy as Just Another Kind of Pollution" he suggests government departments are forced to participate in a cap and trade scheme, much like the proposed emissions trading scheme. It would promote accurate measurement and encourage departments to cut back on the amount of red tape they foist on businesses.
But who would enforce the new scheme? He has a great answer to that question --- listen to the podcast!