Red tape

This article is about the idiom referring to excessive bureaucratic regulation. For other uses, see Red tape (disambiguation).

Red tape is excessive or redundant regulation or bureaucratic procedures that create financial or time compliance costs.^{[1][2][3]: 274, 278–9} It is usually associated with governments, but can apply to other organizations, such as private corporations.^{[1][3]: 273–4}

Red tape differs from beneficial rules and safeguards.^{[3]: 276, 278–9} It is the administrative burden, or cost to the public, over and above the necessary cost of implementing policies and procedures.^{[1][4][3]: 274, 278–9 [5][6][7][8]} A distinction is sometimes made between rules that are dysfunctional from inception ("rules born bad"), and rules that initially served a useful function but evolved into red tape ("good rules gone bad").^{[3]: 273, 285–289}

Red tape can hamper the ability of firms to compete, grow, and create jobs.^[9][10] Research finds red tape has a cost to public sector workers, and can reduce employee well-being and job satisfaction.^[11][12][13] In 2005, the UK's Better Regulation Task Force suggested that red tape reforms could lead to an increase in GDP of 16 billion pounds per year, a greater than 1% rise.^[14] The Canadian Federation of Independent Business estimated the cost to business of red tape arising from federal, provincial and municipal government regulations was $11 billion in 2020, or about 28% of the total burden of regulation for businesses in Canada.^[10]

Many governments have introduced measures to limit or cut red tape, including the European Union, Argentina, the United States, and India.^[15][16][17] Experience from British Columbia, Canada suggests a successful red tape reduction initiative requires strong political commitment.^[18][19]

Red tape definition

The term "red tape" is sometimes employed as "an umbrella term covering almost all imagined ills of bureaucracy", both public and private.^[3]: 275 However, red tape is usually defined more narrowly as government policies, guidelines, and forms that are excessive, duplicative or unnecessary, and that generate a financial or time-based compliance cost.^{[10][3]: 276} Red tape can be categorized as dysfunctional from inception (say because of inadequate comprehension of the problem being addressed); or may evolve into red tape when a rule is inadvertently changed or is no longer needed (for example, a rule that requires carbon copies when communication migrates to electronic mail).^{[3]: 285–289}

Whereas red tape refers to unnecessary rules, administrative burden (sometimes called "white tape") recognizes that regulations that are intended for useful purposes may nonetheless entail a compliance cost.^{[5][20][21][3]: 276 [5][6][22][23]}

Determining whether a regulation is justified rather than red tape can be difficult. Nevertheless, making the proper distinction is relevant when implementing reforms, and cutting red tape differs from deregulation.^[19]

Origins and history

Bundle of US pension documents from 1906 bound in red tape

It is generally believed that the term "red tape" originated in the early 16th century with the Spanish administration of Charles V, King of Spain and Holy Roman Emperor, who started to use red tape, balduque, in an effort to modernize the administration that was running his vast empire. The red tape was used to bind the most important administrative dossiers that required immediate discussion by the Council of State, and separate them from files that were treated in an ordinary administrative way, which were bound with ordinary string.^[24] The origin of the word balduque is the name of the Dutch city 's-Hertogenbosch Bolduque or Bois-le-Duc ("the duke's forrest"), where in those days the red tape was manufactured.

In Britain, Charles Dickens spoke of red tape in David Copperfield (1850): "Britannia, that unfortunate female, is always before me, like a trussed fowl: skewered through and through with office-pens, and bound hand and foot with red tape."^[24] The English practice of binding documents and official papers with red tape was popularized in Thomas Carlyle's writings, protesting against official inertia with expressions like "Little other than a red tape Talking-machine, and unhappy Bag of Parliamentary Eloquence".^[25] As of the first decade of the 21st century, the British barristers' briefs continued to be bound with pink-coloured ribbon known as red tape.^[1]

In the United States, red tape was used to tie personal records of Civil War veterans, reputedly making access to them inconvenient.^[24] Early references to red tape in the U.S. include that of President Warren G. Harding's Secretary of the Interior Albert B. Fall (later convicted for his role in the Teapot Dome scandal) who, according to his own annual report for 1921, set himself the goal of removing "red tape and technicalities" from the management of the department's economic resources to combat stagnation.^[26]: 40 Similarly, the task handed to Scott C. Bone on his appointment as Governor of Alaska on 23 June 1921 was to "unravel government red tape".^[26]: 39 In 1921, the official explanation for the 3rd U.S. Infantry Regiment's strenuous march of 800 miles from Camp Sherman, Ohio to Fort Snelling was given as "red tape". While the army reportedly had insufficient funds to transport the regiment by rail, the cost to supply the troops on the march exceeded what their train fare might have been.^[27]

Red tape has historically often been associated with military procurement. In 1938, the IG Farben chairman Carl Krauch used the argument that red tape was responsible for previous delivery delays on the part of private enterprise in persuading Hermann Göring, the head of the Four Year Plan, to appoint him as plenipotentiary for the chemical industry over an Army Ordnance representative.^[28] In his speech at the meeting of SS Major-Generals in occupied Poznań on 4 October 1943, the SS leader Heinrich Himmler made reference to "red tape" as an example of a potential obstacle to "inventions" within Nazi Germany's armaments industry.^[29] In 1947, a contractor who had worked during World War II under Vannevar Bush in the Office of Scientific Research and Development remembered Bush's "impatience with Army red tape", apparently referring to the OSRD's executive secretary Irvin Stewart's organisational efforts.^[30]

As of the early 21st century, Spanish bureaucracy continued to be notorious for extreme levels of red tape (in the figurative sense).^{[31][better source needed]} In 2013, the World Bank ranked Spain 136 out of 185 countries for ease of starting a business, which took on average 10 procedures and 28 days.^[32] Similar issues persist throughout Latin America.^[31][33] In Mexico in 2009, it took six months and a dozen visits to government agencies to obtain a permit to paint a house.^[34] To obtain a monthly prescription for gamma globulin for X-linked agammaglobulinemia, a patient had to obtain signatures from two government doctors and stamps from four separate bureaucrats before presenting the prescription to a dispensary.^[35] Mexico was the original home of Syntex, one of the greatest pharmaceutical firms of the 20th century, but in 1959, the company left for the American city of Palo Alto, California, in what is now Silicon Valley, because its scientists were fed up with the Mexican government's bureaucratic delays which repeatedly impeded their research.^[36]

Cost of red tape

It is impossible to know exactly how much of the burden of government regulations is red tape — ie, is excessive and delivers little or no benefit. However, a survey by the Canadian Federation of Independent Business (CFIB) found red tape represented about 28% of the total burden of regulation in Canada in 2020.^[10] A European Union (EU) survey reported in 2008 that 36% of EU small and medium enterprises felt that red tape had "constrained their business activities".^[37]

The total cost of regulation for U.S. business was estimated in 2021 at US$364.3 billion, and for Canadian business in 2020 at US$31.9 billion, or CAN$38.8 billion.^[38] This cost represents 1.5% of GDP for the U.S. and 1.7% for Canada.^{[39][40][41][42]}

The CFIB estimated that the cost of red tape arising from Canadian federal, provincial and municipal government regulations was $11 billion in 2020. (This excluded covid-19 related costs, to make the amount more comparable to previous years.)^[10] The annual cost of red tape per employee was higher for firms with fewer than 5 employees, at $1945, versus $398 for firms with 100 or more employees.^[10]

The Better Regulation Task Force suggested in 2005 that red tape reforms could potentially deliver an increase in income of 16 billion pounds per year, an amount greater than one percent of UK GDP.^[14] The EU's "Cutting Red Tape in Europe" report, which presented suggestions on how to reduce the administrative burden when member states implement EU legislation, estimated that the administrative burden reduction potential of all recommendations in the report exceeded €41 billion annually.^[43] Such calculations have been questioned, however, given that it can be difficult to ascertain costs of regulation in industries that are composed of diverse firms.^[44]

While a regulation may be useful, the cost of imposing it may exceed the benefits. The Canadian federal government applies a cost-benefit analysis to most regulatory proposals, which takes into account the cost of the policy to consumers, businesses, and other sectors of society.^[45] Since the 1970s, Australian governments have sought to subject regulation to rigorous cost-benefit analysis so as to constrain both the stock and flow of the regulatory burden.^[46]

Red tape reduction initiatives

It can be difficult to distinguish between justified regulatory costs and unneeded regulations. For this reason, the expression "cutting red tape" has been used to refer to both initiatives to reduce unnecessary regulation, and to policies to reduce the overall regulatory burden.^[19]

Canada's Red Tape Reduction Act of 2015 implemented a one-for-one rule that requires the removal of a regulation each time regulators impose a new administrative burden on business.^[15] Nevertheless, while Regulations decreased from 684 to 605 between 2014 and 2023, regulatory Requirements increased from 129,860 to 149,401.^[18][45]

A more successful reduction in red tape took place in the province of British Columbia, Canada, following a 2001 election promise to reduce the regulatory burden by 33%.^[19] At the time, regulation was heavy, with rules imposed on, for example, the size of televisions in restaurants, the number of par-four holes at golf courses, and the maximum seating capacity of ski hill lounges.^[19] After three years, a 37% reduction was achieved. A central element of the program was a strong commitment from the minister responsible and the provincial premier.^[18][19]

In the United States, cutting red tape was a central principle of a 1993 National Performance Review study requested by the Clinton Administration.^[47] In November 2024, U.S. President-elect Donald Trump said Elon Musk and Vivek Ramaswamy would co-lead a new Department of Government Efficiency which would provide advice from outside government on methods to "slash excess regulations", among other objectives.^[48][49]

In the European Union (EU), reducing the administrative burden on firms has been a prominent theme since the 1990s.^[44] In 2024, the European Commission President advocated a red tape reduction program that emphasized simplification (eliminating regulatory overlap and contradictions), speed, and coherence to deal with the EU's patchwork of national regulations.^{[44][50]: 6–7} A ongoing EU objective has been to remove red tape in order to facilitate trade across the European single market. For example, recycling labels on paint cans in Spain and France may differ because the two countries' interpretation of EU legislation are not aligned, and this prevents a can of paint made for the Spanish market from being sold in France.^[51][52] The European Round Table for Industry recommends stronger single-market enforcement so that lawmakers better transpose EU laws into national laws, which would promote regulatory harmonization and reduce the need for firms to manage different administrative processes in each EU country.^[51][52]

South Korea established a standing regulatory-management system with the Framework Act on Administrative Regulations (FAAR), which codified the definition, registration and publication of regulations, mandated Regulatory Impact Analysis (RIA), and provided for a presidential Regulatory Reform Committee; a wholesale amendment in 2010 then required sunset or re-examination clauses for new or strengthened regulations so that rules are periodically maintained, revised, or repealed.^[53][54] In 2014 the government launched the online Regulatory Reform Sinmungo, a permanent channel that routes public and business complaints to ministerial review, coordination by the Office for Government Policy Coordination, and, where needed, recommendations by the Regulatory Reform Committee; for example, when minors entered age-restricted premises (lodgings, bathhouses, nightlife venues) using forged or borrowed IDs, proprietors who had checked IDs in good faith previously had to wait for criminal outcomes before relief from sanctions, creating repeat filings and long delays, whereas after statutory and rule changes authorities may waive administrative sanctions without awaiting criminal decisions if evidence shows deception or verification was impossible (with criteria standardized in guidance), reducing redundant paperwork and processing time.^[55][56][57] In 2015 one-stop services began bundling procedures; a typical case is “Transfer Notification Plus,” under which eligible movers request utility fee concessions (electricity, gas, district heating, TV fee) at the same time as filing a change-of-address (online via Government24 or at a local office), replacing multiple provider-specific applications with a single authentication and consent for inter-agency data use and thereby reducing visits, duplicate documentation, mis-entries, and missed applications.^[58][59] In 2019 a cross-government regulatory sandbox was introduced to reduce pre-market uncertainty for new technologies and services by combining quick checks, temporary approvals, and test-bed exemptions with safety/privacy conditions; for instance, autonomous delivery robots received a bundled approval for sidewalk operation in designated zones and limited use of onboard video (masking, retention limits) with insurance obligations, replacing overlapping permits and repeat filings and accelerating trials.^[60][61][62] Also in 2019, a Presidential Decree on Proactive Administration was adopted to curb procedural overload caused by ambiguous rules or lack of precedent by providing pre-execution consulting with audit bodies, safe-harbor/leniency and HR incentives for good-faith decisions, and ministerial committees that consolidate or remove redundant documentary requirements through digital originals and administrative data-sharing—measures designed to break the chain “interpretive uncertainty → extra documents → delay.”^[63][64] In 2025 the government created the Core Regulation Rationalization Strategy Meeting, chaired by the President, to prioritise cross-ministerial reforms; the first session was held on 15 September 2025 at KIST, where President Lee Jae-myung stated: “Amid complex interests, ministerial differences have left regulations tangled like a spiderweb; sweeping them away is this administration’s goal.”, emphasising the removal of unnecessary procedures.^[65][66]

India

Since the mid-2010s, India has introduced several measures to lower administrative burden. In September 2021, the government launched a National Single Window System (NSWS) designed to integrate clearances across central ministries and states for investors and businesses.^[67] In addition to providing a common entry point, NSWS consolidates information requirements and aims to standardise application formats, support online tracking and enable time-bound processing across participating authorities. By December 2022, official updates reported over 44,000 approvals processed via the portal.^[68]

Legal changes have targeted minor, technical contraventions that can generate procedural delays. The Jan Vishwas (Amendment of Provisions) Act, 2023 decriminalised 183 provisions across 42 central laws, generally replacing imprisonment with monetary penalties and providing for adjudication rather than prosecution for a set of compliance breaches.^[69] A follow-on Jan Vishwas (Amendment of Provisions) Bill, 2025 was introduced in the Lok Sabha in August 2025, proposing additional decriminalisation and rationalisation measures intended to reduce litigation and routine interface with enforcement agencies.^[70]

Administrative processes have also been digitised. In direct taxation, the “faceless” assessment, appeals and penalty schemes are intended to minimise discretionary variation in routine cases by using electronic communication, randomised allocation and team-based decision-making.^[71] Transparency and grievance redress mechanisms complement these procedural reforms. The Right to Information (RTI) Act, 2005 established a statutory regime for access to information,^[72] while the Centralised Public Grievance Redress and Monitoring System (CPGRAMS) provides a 24×7 online portal for citizen complaints and publishes disposal and pendency statistics at regular intervals.^[73]

Sectoral regulators have used regulatory sandboxes to allow controlled, time-limited testing of innovations before broader authorisation. The Reserve Bank of India and the Securities and Exchange Board of India operate sandbox frameworks under which selected entities trial products or processes under specified limits and reporting obligations, with lessons used to inform subsequent regulatory adjustments.^[74][75]

Commentary also notes ongoing constraints, including the uneven rollout of the four national labour codes and state-level land and permitting processes, which can maintain compliance complexity even as central procedures are simplified.^[76] For cross-country comparisons, the World Bank discontinued its “Doing Business” rankings and launched Business Ready in 2024, which assesses regulations and public services without a single composite rank; this affects how changes in administrative burden are benchmarked across jurisdictions.^[77]

New Zealand

In March 2023, New Zealand established the Ministry for Regulation (Te Manatū Waeture).^[78] It is a central government agency tasked with improving the quality of regulation across the public sector. https://www.regulation.govt.nz/ The Ministry was created following the disestablishment of the New Zealand Productivity Commission and is led by CE Gráinne Moss - 'Ministry of Regulation' now official, new chief executive appointed". The Post. 7 March 2024. Archived from the original on 22 May 2024. Retrieved 22 May 2024. The Ministry comes under the portfolio of Minister David Seymour. https://en.wikipedia.org/wiki/Ministry_for_Regulation

The Ministry plays a pivotal role in identifying outdated, ineffective, or overly complex regulations and recommending reforms that promote efficiency, transparency, and economic productivity. The Ministry's core functions include, ensuring the quality of new regulation, improving existing regulatory systems and leading sector reviews to identify and remove unnecessary rules.

One of its key initiatives was to build a Red tape tipline - https://www.regulation.govt.nz/our-work/report-a-red-tape-issue/ This allows individuals and organisations to report regulatory burden that hinder productivity or innovation, via an online portal. Feedback is used to prioritise reviews and recommend legislative changes. To date this tipline has had over 12,000 submissions. The tipline has received reports ranging from obsolete fax machine servicing requirements to impractical flour dust detection standards in bakeries. One of the initiatives led to changes in the rules around small, detached buildings like sheds and garages.^[79] The changes remove unreasonable setbacks and make better use of space for New Zealand sections and removed unnecessary bureaucracy which was no longer fit for purpose.

The Ministry for Regulation represents a significant shift in New Zealand’s approach to regulatory oversight and the reduction of red tape. By centralising responsibility for regulatory quality and engaging directly with the public and industry, the Ministry aims to restore a ‘can-do’ culture and reduce the economic and social costs of poor regulation. https://www.regulation.govt.nz/our-work/what-weve-done/

Perceptions of red tape

Applying rules consistently can affect the extent to which individuals perceive that red tape exists in a government agency.^[80] A survey-based experiment in the context of a jury duty summons found inconsistently-applied rules may be viewed as ineffective or unfair, fueling the perception of a high level of red tape.^[80]

Perception of red tape (as opposed to useful regulation) may be relevant in the public service context, since employees may be more willing to comply with rules that they perceive as valuable.^[81]

Red tape and public sector employee job satisfaction

Red tape can reduce employee flexibility and autonomy, thereby reducing job satisfaction.^[11] A 2022 study that used survey data from 354 school principals in Chile found they experienced increased emotional exhaustion and risk of burnout when they were advised of a potential increase in red tape in the form of compliance tasks.^[11] Research conducted into experiences of public-school leaders and teachers in Belgium found that when employees were faced with high levels of red tape from utilising digital tools, they were more likely to experience emotional exhaustion and, therefore, have higher turnover intention.^[13]

A study of Dutch child welfare employees showed that red tape reduced interactions with clients and job effectiveness, which decreased job satisfaction.^[12] Highly motivated employees were found to be more sensitive to burdensome rules and procedures.^[12]

In 2020, the Canadian government released the Blueprint 2020 report, which brought together insights from engagements with over 2,000 public servants about their experiences with internal red tape.^[82] This report found that internal red tape is a significant concern for public servants. Key issues included having unclear direction on rules, policies, and guidelines; and poor internal client service.^[82]

Recent Korean surveys consistently suggest that formalistic work practices—“showcase” or pseudo-work, unnecessary documents, reports, meetings, and approvals—can undermine public employees’ job satisfaction. A police-organization survey study published in 2016 (n=294) reports that the more individuals perceive red tape (formalistic procedural burdens), the significantly lower their job satisfaction.^[83] Conversely, it also presents the result that the clearer the rules and procedures (formalization), the significantly higher the job satisfaction.^[83] In sum, non-value-adding formalism (“red tape”) is associated with lower job satisfaction, whereas clear, purposive rules (“green tape”) are associated with higher job satisfaction. Another Korean study analyzed the effects of perceptions of organizational structure on turnover intention using data from the Korea Institute of Public Administration’s 2019 Public Service Life Survey (general service officials in central government ministries and metropolitan local governments, n=4,102).^[84] In multiple regression results, the higher civil servants perceived red tape, the higher their turnover intention; clarity of rules (formalization) was not significant in the regression model, but in simple correlation an inverse (negative) relationship with turnover intention was observed.^[84] Meanwhile, surveys of youth and jobseekers in Korea repeatedly report “job security” as a top reason for preferring civil service.^[85][86] These results suggest that there may be a tension between stability-centered entry motives and on-the-ground experiences of procedural burdens. In addition, in the 2025 nationwide perception survey by the Ministry of the Interior and Safety and the Korea Institute of Public Administration (n=73,795), the top priority for improving public-sector efficiency was “showcase/formalism and other pseudo-work” (22.06%), and 48.11% of respondents agreed that unnecessary documents and reports contribute to inefficient decision-making.^[87] During the same period, the official 2024 Public Service Life Survey reported that the average score (5-point scale) for overall job satisfaction was 3.14 and showed a year-over-year downward trend, while the average intention-to-leave score was a relatively high 3.41.^[88] In other words, the large-scale survey result identifying formalism as the most urgent problem and the official statistics showing low job satisfaction and high intention to leave were observed simultaneously in the same period.^[87][88]

India

In India, administrative red tape has long shaped the day-to-day experience of public sector employees. Extensive procedures, layered rules and documentation requirements can slow decision-making and encourage risk-averse behaviour, particularly where officials anticipate post-facto scrutiny by vigilance and investigative bodies. Scholarly and official reviews have linked “file-pushing,” serial notings and a preference for procedural compliance over timely outcomes to concerns about personal liability and reputational risk, even for routine administrative actions.^[89][90]

These dynamics can affect job satisfaction in several ways. First, heavy compliance workloads and multiple layers of ex-ante and ex-post checks may reduce decision latitude, with officials focusing on process defensibility rather than problem-solving or innovation. Second, delays created by sequential approvals and inter-departmental consultations can translate into pressure on staff who must reconcile statutory timelines with practical bottlenecks. Third, ambiguity in interpreting overlapping rules may incentivise excessive caution, as employees seek to minimise audit objections or adverse noting by superiors. Together, these factors can dampen morale, crowd out professional judgement and reinforce a culture of minimal-risk choices.^[89][90]

Reform measures have sought to address motivation, capability and discretion. The National Programme for Civil Services Capacity Building (popularly known as Mission Karmayogi) aims to shift from rule-based to role-based competencies, emphasising continuous learning, ethical standards and outcome orientation across services under the Ministry of Personnel, Public Grievances and Pensions.^[91] Digitisation has complemented this approach. Faceless income-tax assessment, appeals and penalty schemes are designed to reduce in-person interfaces, lower discretionary variation in routine processes and, by extension, lessen perceived individual exposure for frontline decision-takers.^[71] Similar e-office practices and workflow tools, while variable across organisations, seek to streamline documentation burdens and shorten movement of files.

Analyses nonetheless note that institutional path dependencies can limit the immediate impact of reforms on job satisfaction. Where accountability frameworks remain centred on strict ex-post compliance, officials may continue to prioritise procedural risk management over timely delivery even within digitised systems. Inter-ministerial coordination and the coexistence of legacy rules with newer process reforms can also create transition frictions that sustain caution in decision-making. As a result, while capacity building and digitisation have the potential to improve motivation and decision quality, the overall effect on day-to-day satisfaction depends on how far organisational incentives, internal guidance and supervisory practices realign toward outcome-oriented public administration.^{[89][90][91][71]}

New Zealand

Red tape has been a challenge in the public sector for many years. In New Zealand recent research highlights its detrimental impact on employee performance, engagement and retention. This research from the Victoria University of Wellington highlights how red tape negatively affects performance management in the New Zealand particularly in the public sector. ‘Competing goals and red tape make public management difficult, offer little accountability, and inhibit employee development, which often must run parallel to formal practices.’ ^[92]

Excessive administrative requirements and competing goals reduce managerial effectiveness, hinder staff development and contribute to staff frustration. ‘Their propensity for red tape and emphasis on formal administrative processes over interpersonal processes risk undermining the informal psychosocial processes now recognized as critical to effective Public Management’ ^[93]

Recent public management restructuring and cost cutting have led to increased workloads and reduced morale. The lack of career mobility and bureaucratic red tape may lead to long term turn over as staff seek more agile and empowering workplaces. Reducing red tape can significantly improve job satisfaction and retention. By streamlining administrative processes managers can focus on development and succession planning rather than compliance. Enabling faster decision making and introducing innovation boosts engagement and job satisfaction. The Ministry for Regulation’s ‘Red Tape Tipline’ allows the public and public servants to raise regulatory issues directly, signalling a shift towards a more responsive outlook.^[94]

Leadership plays a vital role in mitigating the effects of red tape and empowering employees to make decisions. Effective leaders foster environments where employees feel valued and supported. The Public Service Commissions workforce data shows that job satisfaction and engagement are closely tied to perceptions of autonomy and development opportunities. ,^[95]

To ensure the efforts to reduce red tape are valuable, there would be benefits in monitoring and evaluating the impact on red tape reduction on morale and performance. By leveraging technology and business tools, governments can create a more efficient and responsive environment enhancing service delivery as an external rewards and internally reduce turnover, focus on engagement and succession planning.^[96]

Red tape, economic growth, and corruption

Red tape and economic growth

While efficient government institutions can foster economic growth, cumbersome and unnecessary bureaucracy that delays permits and licenses slows technological advances.^[97] Red tape has been found to be an obstacle to investment and growth in a study using data for 68 countries.^[97]

Policies that require government regulation and bureaucratic intervention can stifle economic progress, as has been documented by economist Anne Krueger in the context of an import-substitution development strategy.^{[98][99]: 298} This type of policy reduces the incentive to produce exports, thereby generating a foreign exchange "shortage" that puts pressure on governments to restrict imports to high priority areas such as medicines over consumer luxuries. These restrictions require increased intervention, such as additional customs inspections and import approvals. In turn, this leads to delays and greater complexity of the system, which raises costs for importers. The higher costs create an incentive for black-market activity, thereby leading to political pressure to tighten still further the restrictive import regime. Over time, regulation and red tape promote more red tape and regulation in a vicious circle, as supporters of import substitution become more entrenched, while those who oppose it, such as exporters, cannot survive in the new environment.^[98] Rising costs of administration in the private sector, along with costs of delays and market inefficiency, weigh on economic performance and often result in an economic crisis.^[98]

Red tape and corruption

The existence of regulations and authorizations provides a kind of monopoly power to the officials who must approve or inspect regulated activities.^[100] When regulations are not transparent, or an authorization can be obtained only from a specific office or individual (that is, there is no competition in the granting of these authorizations), bureaucrats have a great deal of power which may lead to corruption.^{[100]: 10–11 [99]: 298–299 [97]: 685 [101]: 32}

Officials may even intentionally introduce new regulations and red tape in order to be able to extract more bribes by threatening to deny permits.^{[97]: 685 [99]} Particularly in developing and transition economies, surveys indicate that a large proportion of an enterprise manager's time (especially for small enterprises) requires dealing with bureaucracies, and this time can be reduced through the payment of bribes.^{[100]: 10–11}

See also

• Busy work
• Byzantinism
• Crony capitalism
• Cronyism
• Gestor
• Humphrey Appleby
• Instruction creep
• Jobsworth
• License Raj
• Micromanagement
• Paperwork Reduction Act
• Paternalism
• Prig
• Purple crocodile
• Regulatory impact analysis
• Sludge theory