Regulatory Decentralization and Stringency: The Case of Comparative Minimum Wage and Renewable Energy Policies

Abstract

This article investigates the concept and measurement of regulatory decentralization with a focus on minimum wages and renewable electricity standards. These two policy areas are chosen because they admit of a clear interpretation in continuous terms and vary substantially across jurisdictions. Concurrent central and subcentral regulatory competencies have a straightforward quantitative interpretation in these two policy areas. The article presents data on the effective autonomy of subcentral governments to determine their own minimum wage rates and renewable energy standards. It then tests whether more decentralized minimum wage and renewable energy regulatory regimes yield a consistently lower level of regulation and higher degree of interregional policy variation. I find that central governments are more likely to set regulatory minimums than maximums in these areas, and that therefore regulatory centralization does promote a higher level of regulation, but likely not through a competitive dynamic, and less policy variance.