Amicus brief of “Scholars of Public Choice Economics” North Carolina Board of Dental Examiners case

I was on vacation when this was actually filed, but I wanted to take a moment to recognize the brief of “Scholars of Public Choice Economics” that the Institute of Justice filed a few weeks ago in the North Carolina Board of Dental Examination Supreme Court appeal. The brief is here. Thanks to Paul Sherman at IJ for working with me on the brief and thanks to all of the 40-odd economists and law professors who signed on in support of the brief.

I also wanted to call attention to the excellent amicus brief of “Antitrust Scholars” filed by Rebecca Haw Allensworth, Aaron Edlin, and Einer Elhauge, whose basic conclusions I endorse as well.

The expansion of self-interested occupational licensing regimes over the several decades has gone on largely beneath the public’s radar screen. But overly-restrictive licensing regimes, usually instigated and administered by the self-interested members of the regulated industry itself, raise prices, harm consumers, and are a drag on the economy. I also suspect that it contributes to the peculiar development of declining labor market mobility over time, as restrictive licensing rules make interstate migrations more costly (there are, of course, other contributing causes as well). At the same time, there is no evidence that overly-restrictive licensing laws actually protect consumers or advance any other legitimate interests (other than to transfer wealth to members of the regulated industry). Indeed, by reducing the supply and raising the price of professional services, overly-restrictive licensing rules can make consumers worse off by leading them to do-it-yourself or other completely unregulated alternatives.

In the North Carolina Board of Dental Examiners case, the Supreme Court will have an opportunity to try to put some teeth into antitrust law scrutiny of these licensing regimes. Our brief seeks to explain the underlying political economy dynamics of how these laws come to be and why the most persuasive explanation for their existence often is the self-interest of the economic members of the regulated industry itself, not consumer protection.

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Ilya Somin · August 19, 2014