Unintended Legislative Inertia
84 Pages Posted: 29 May 2020 Last revised: 31 Dec 2021
Date Written: December 1, 2019
Abstract
Institutional and political forces create strong inertial pressures that make the updating of legislation a difficult task. As a result, laws and regulations often stagnate, leading to the continued existence of obsolete rules and policies that serve long-forgotten purposes. Recognizing the inertial power of past policies, legislatures over the last few decades have increasingly relied on a perceived solution — temporary legislation. In theory, this measure avoids inertia because it requires legislators to make a deliberate choice to extend it.
This Article argues that temporary legislation is a double-edged sword. While some temporary laws ultimately expire, many perpetuate through cycles of extension and re-authorization. Close examination reveals that temporary legislation often results in its own inertial force, leading to the unintended permanence of what is originally believed to be only a provisional measure. Using a case study from a large public subsidy adopted as a localized fix to a temporary problem, the Article demonstrates how the subsidy has inadvertently grown in scope and in size, creating its own inertial force that made its repeal exceedingly difficult.
Path-dependence dynamics of temporary legislation affect not only present-day policies, but also the ability of legislatures to resist status quo bias and bring about legal change. The Article concludes with normative insights on ways to utilize flexible rule-making whilst circumventing legislative inaction. Careful design of expiring provisions that is aware of the inertial power of temporary legislation can effectively ensure that laws are kept or discarded given their merits, not by force of history.
Keywords: Public Choice, R&D Tax, Legislative Inertia, Entrenchment, Innovation Incentive, Tax Credit
JEL Classification: K34
Suggested Citation: Suggested Citation