# Red tape

Red tape is usually defined as excessive or unnecessary government regulations and bureaucracy that generate financial or time compliance costs. Red tape is in excess of the necessary administrative burden, or cost to the public, of implementing government policies and procedures. This definition is also consistent with popular usage, which generally views red tape as negative.$^{:276,278–279}$
Red tape can hamper the ability of firms to compete, grow, and create jobs. Research finds red tape has a cost to public sector workers, and can reduce employee well-being and job satisfaction.
In 2005, the UK's Better Regulation Task Force suggested that red tape reforms could lead to an increase in income of 16 billion pounds per year, an amount greater than 1% of GDP. 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. This represented about 28% of the total burden of regulation for businesses in Canada.
Some governments have introduced initiatives to limit or cut red tape, such as a one-for-one rule that removes one regulation each time a new administrative burden is imposed on business. Experience from British Columbia, Canada suggests a successful red tape reduction initiative requires strong political commitment.

## 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.$^{:275}$ 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.$^{:276}$ This definition is consistent with popular usage, which generally views red tape as negative.$^{:278–279}$
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. $^{:276}$
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.

## Origins and history

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 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.
In Britain, Charles Dickens spoke of red tape in David Copperfield: "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." 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".
As of the early 21st century, Spanish bureaucracy continued to be notorious for extreme levels of red tape (in the figurative sense). 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. Similar issues persist throughout Latin America. In Mexico in 2009, it took six months and a dozen visits to government agencies to obtain a permit to paint a house. 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. 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.

## 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. 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. This cost represents 1.5% of GDP for the U.S. and 1.7% for Canada.
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.) 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.
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. The European Union's (EU) "Cutting Red Tape in Europe" report presented suggestions on how to reduce the administrative burden when member states implement EU legislation. The total administrative burden reduction potential of all recommendations in the report was estimated to exceed 41 billion euros annually.
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. 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.

## 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.
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. Nevertheless, while Regulations decreased from 684 to 605 between 2014 and 2023, regulatory Requirements increased from 129,860 to 149,401. 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%. 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. 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.
In the United States, cutting red tape was a central principle of a 1993 National Performance Review study requested by the Clinton Administration. 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.

## Perceptions of red tape

Applying rules consistently can affect the extent to which individuals perceive that red tape exists in a government agency. 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.
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.

## Red tape and public sector employee job satisfaction

Red tape can reduce employee flexibility and autonomy, thereby reducing job satisfaction. 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. 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.
A study of Dutch child welfare employees showed red tape reduced interactions with clients and job effectiveness, which decreased job satisfaction. Highly motivated employees were found to be more sensitive to burdensome rules and procedures.
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. 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.

## 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. Red tape has been found to be an obstacle to investment and growth in a study using data for 68 countries.
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.$^{:298}$ 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. 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.

### 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. 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.$^{:10–11}$$^{:298–299}$$^{:685}$$^{: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.$^{:685}$ 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.$^{:10–11}$