Friday, June 7th, 2013
My latest blog post is online at GoLocalProv and is called “Three Economic Ideas for Rhode Island.” In it I give three ideas for improving the state’s economy, one tactical, one strategic, and one I call “the impossible dream.” Here’s a sample:
A more difficult but potentially more beneficial item would be regulatory harmonization with Massachusetts. Trying to negotiate with them would be pointless. Trying to beat them is nearly impossible. But neither is required. Simply pass a law that says, in effect, “If it’s legal in Massachusetts, it’s legal in Rhode Island. If you’re licensed to do it in Massachusetts, you’re licensed to do it in Rhode Island.”
What a scheme like this does is in effect creates a common market between the states, similar to the European Union except not based on treaties and bureaucracy. A state like California can get away with bespoke regulations like proprietary emissions standards. California is a huge and rich state, so businesses simply can’t ignore it.
By contrast, Rhode Island is small and not rich, so companies and people will not pay and price, bear any burden for the privilege of living and doing business here. But by in effect joining forces with Massachusetts, you’ve now got a market of seven million, which is more attractive.
This approach also reduces to some extent border arbitrage, and lets Rhode Island and Southern Massachusetts function as the integrated economy that they are. There will still be fiscal policy disparities, but you can’t fix everything at once. But anything reasonable that reduces barriers to doing business in Rhode Island is a good idea.