Ibrahimi, Klea; Benoît, Cyril; & Fazekas, Mihály (2026). Legislative Procedural Scrutiny and Firm Performance. GTI-WP/2026:01, Budapest: Government Transparency Institute.
How do legislative procedures shape economic outcomes and competition among firms? This paper examines whether reduced scrutiny in the lawmaking process creates unequal economic advantages within industries.
Drawing on a novel dataset linking UK legislation from 2009 to 2015 with more than 200,000 firm-year observations across 21 sectors, the study investigates four dimensions of legislative scrutiny: legislative volume, accelerated procedures, frequent amendments, and non-governmental bill sponsorship.
The findings reveal that reduced legislative scrutiny is associated with higher profits, revenues, and profit margins among unusually high-growth firms, while their lower-growth counterparts experience relative losses. Rather than improving overall sectoral performance, weaker scrutiny appears to widen economic disparities between firms operating under the same legal framework.
These results highlight the importance of how laws are made, not just what they contain, in shaping market competition and the distribution of economic advantages. The paper underscores the potential value of stronger legislative oversight, transparency, and public consultation in promoting more equitable competitive conditions.
Read the full working paper HERE.