IESET.
Hypotheses·regulatory·eu_regulatory_burden_productivity_drag

The cumulative EU regulatory stack (GDPR 2018, MiFID II 2018, DMA 2022, DSA 2022, AI Act 2024, Taxonomy Regulation 2020, CSRD 2023, MiCA 2023, CBAM 2023, plus sector-specific accretion) has imposed measurable productivity drag on EU firms relative to US counterparts in the same sectors.

The drag is concentrated in scale-sensitive sectors (digital platforms, asset management, large manufacturing, financial services) where fixed compliance costs are spread over smaller market size than US peers achieve. Over 2018-2023, the cumulative TFP differential between EU and US in affected sectors exceeds 5 percentage points. This is consistent with the Draghi Report (2024) characterisation of EU competitiveness decline.

INCONCLUSIVEengine/runs/eu_regulatory_burden_productivity_drag

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['constructed: gross value added per hour worked (OECD STAN or similar). EU-KLEMS preferred where available.', 'constructed: total factor productivity index (sector-level where possible; else country-level OECD productivity database)']

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

This test cannot make a firm call yet. no outcome variable loaded; missing: ['constructed: gross value added per hour worked (OECD STAN or similar).

why it matters

This matters because regulatory claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 11 country or place units from 2015 to 2023, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Eu post 2018 gdpr dummy
  • Eu post 2022 dma dsa dummy
Possible pathway
  • Rich-country pmr overall
  • Fraser efw regulation subindex
What we checked
  • Log labour productivity
  • Log productivity index
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/eu_regulatory_burden_productivity_drag
1007550250201520192023DEUFRAITAESPNLDBELPOL
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show log_labour_productivity across 11 sampled countries over 2015–2023.
The shapes above are stylised — none of the lines are real data.
Placeholder for eu_regulatory_burden_productivity_drag. Published chart will be generated from engine/runs/eu_regulatory_burden_productivity_drag/chart_data.json.

Who has skin in the game — schools predicting on this

1 school list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Classical Liberalwins if SUPPORTEDpartial/no-call

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:54:29Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

The cumulative EU regulatory stack (GDPR 2018, MiFID II 2018, DMA 2022, DSA 2022, AI Act 2024, Taxonomy Regulation 2020, CSRD 2023, MiCA 2023, CBAM 2023, plus sector-specific accretion) has imposed measurable productivity drag on EU firms relative to US counterparts in the same sectors. The drag is concentrated in scale-sensitive sectors (digital platforms, asset management, large manufacturing, financial services) where fixed compliance costs are spread over smaller market size than US peers achieve. Over 2018-2023, the cumulative TFP differential between EU and US in affected sectors exceeds 5 percentage points. This is consistent with the Draghi Report (2024) characterisation of EU competitiveness decline.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if β_eu_post_2018 is non-negative or not statistically significant at p<0.10 on log labour productivity, OR if after controlling for energy prices + COVID exposure + fiscal-response magnitude, the EU-post-2018 coefficient loses significance. The rigorous falsification would also include a placebo test (EU-post at a pre-2018 fake date should show no effect).

formal test & threshold
test:      eu_post_2018_productivity_divergence_panel_fe
threshold: β_eu_post_2018 < -0.02 (log points) at p<0.10 AND robust to energy-price + COVID controls

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
11 countries · 2015 – 2023
Evidence type
associational

Two-way FE panel. β_eu_post_2018 identifies EU-member average post-GDPR productivity divergence from the US + non-EU-baseline. Because USA is the sole non-EU control + possibly GBR post-2020 (Brexit creates control variation), the identification is admittedly narrow. Sensitivity: swap OECD PMR overall for regulation-subindex-only to isolate pure regulatory channel from broader PMR. Known limitations: (1) Single control country (USA) is weak identification; adding CAN, AUS, CHE as non-EU-advanced controls would strengthen. (2) TFP measurement is notoriously noisy and depends on KLEMS-type sectoral decomposition not uniformly available. (3) The 2018-2023 window overlaps with COVID + energy crisis + war in Ukraine. Year FE soak up common shocks but the shocks were heterogeneous across EU vs US.

Data

VariableSourceTransform
log_labour_productivity
outcome
constructed:gross value added per hour worked (OECD STAN or similar). EU-KLEMS preferred where available.tier 5
log
log_tfp_index
outcome
constructed:total factor productivity index (sector-level where possible; else country-level OECD productivity database)tier 5
log
eu_post_2018_gdpr_dummy
treatment
constructed:indicator = 1 for EU member states in year 2018 onward. USA = never-treated as control.tier 5
indicator
eu_post_2022_dma_dsa_dummy
treatment
constructed:indicator for incremental effect post-DMA/DSA era.tier 5
indicator
oecd_pmr_overall
channel
oecd_pmr:OECD.ECO.GCRDtier 4
level
fraser_efw_regulation_subindex
channel
fraser_efw:area_5_regulationtier 4
level
log_population
control
world_bank_wdi:SP.POP.TOTLtier 2
log
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
debt_to_gdp
control
imf:GGXWDG_NGDPtier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — eu_regulatory_burden_productivity_drag

Verdict: INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['constructed: gross value added per hour worked (OECD STAN or similar). EU-KLEMS preferred where available.', 'constructed: total factor productivity index (sector-level where possible; else country-level OECD productivity database)']

Pre-registration

  • Claim: The cumulative EU regulatory stack (GDPR 2018, MiFID II 2018, DMA 2022, DSA 2022, AI Act 2024, Taxonomy Regulation 2020, CSRD 2023, MiCA 2023, CBAM 2023, plus sector-specific accretion) has imposed measurable productivity drag on EU firms relative to US counterparts in the same sectors. The drag is concentrated in scale-sensitive sectors (digital platforms, asset management, large manufacturing, financial services) where fixed compliance costs are spread over smaller market size than US peers achieve. Over 2018-2023, the cumulative TFP differential between EU and US in affected sectors exceeds 5 percentage points. This is consistent with the Draghi Report (2024) characterisation of EU competitiveness decline.
  • Falsification rule: Not supported if β_eu_post_2018 is non-negative or not statistically significant at p<0.10 on log labour productivity, OR if after controlling for energy prices + COVID exposure + fiscal-response magnitude, the EU-post-2018 coefficient loses significance. The rigorous falsification would also include a placebo test (EU-post at a pre-2018 fake date should show no effect).
  • Falsification test: eu_post_2018_productivity_divergence_panel_fe

Estimate

  • Error: no outcome variable loaded; missing: ['constructed: gross value added per hour worked (OECD STAN or similar). EU-KLEMS preferred where available.', 'constructed: total factor productivity index (sector-level where possible; else country-level OECD productivity database)']

Variables resolved

  • constructed: indicator = 1 for EU member states in year 2018 onward. USA = never-treated as control. → eu_post_2018_gdpr_dummy (treatment, publisher=constructed, n=99)
  • oecd_pmr:OECD.ECO.GCRD,DSD_PMR@DF_PMR,1.2 → oecd_pmr_overall (decomposition_channels, publisher=oecd_pmr, n=105)
  • fraser_efw:area_5_regulation → fraser_efw_regulation_subindex (decomposition_channels, publisher=fraser_efw, n=4718)
  • world_bank_wdi:SP.POP.TOTL → log_population (controls, publisher=world_bank_wdi, n=14447)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • imf:GGXWDG_NGDP → debt_to_gdp (controls, publisher=imf, n=8113)

Variables missing data

  • constructed: gross value added per hour worked (OECD STAN or similar). EU-KLEMS preferred where available. (outcome, name=log_labour_productivity) — vintage not on disk
  • constructed: total factor productivity index (sector-level where possible; else country-level OECD productivity database) (outcome, name=log_tfp_index) — vintage not on disk
  • constructed: indicator for incremental effect post-DMA/DSA era. (treatment, name=eu_post_2022_dma_dsa_dummy) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:54:29+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Data readiness: - OECD PMR (ready ✓) - WGI, Fraser EFW (registered, some data pending) - EU-KLEMS sectoral TFP — specialist fetcher needed for v1.1 - OECD STAN labour productivity — available via OECD API (ready ✓) v1 runs on country-level data on disk; v1.1 adds sectoral decomposition when EU-KLEMS fetcher ships.

Authored framework. Read the transparency note.