Assessing the Effectiveness of Regulatory Offsetting Schemes: Lessons from the UK Experience

Modern democracies are often characterized by strong regulatory growth. While governmental regulations offer clear benefits, they also impose burdens on businesses, citizens, and public administrations. To address this issue, some countries have adopted "regulatory offsetting" schemes, which require governments to offset new policy provisions by abolishing existing ones. Despite their increasing implementation, the effectiveness of these schemes in curbing regulatory growth remains unclear. This paper examines this issue by exploring the case of the United Kingdom. As the first country to introduce such a scheme, the UK offers a compelling case study. The policy initially began as a "one-in, one-out" rule and progressively increased in stringency to "one-in, two-out" and eventually "one-in, three-out" before being abolished. This progression provides a unique opportunity to analyze the different versions of offsetting schemes and their potential effects within a single context. We assess the effectiveness of the regulatory offsetting scheme on rule growth dynamics using text-as-data approaches. By extracting key information, such as the number of restrictive or replacement clauses from the texts, we aim to provide a deeper understanding of the scheme's impact.