The Red Tape Conundrum

(Credit: Illustration by Timothy Goodman; Photograph by Brian Henn)

It may well be the biggest bogeyman in business—bigger, perhaps, than even taxes: We’re talking, of course, about red tape. The idea that burdensome and overly complicated government regulation is strangling growth is almost as old as commerce itself. But right now the hue and cry from the business community is louder than at just about any time in recent memory. Concern about regulation is soaring among executives. In a recent survey by Deloitte, North American chief financial officers named new, burdensome regulation as the No. 2 threat to their business, behind only the possibility of a recession. When the National Federation of Independent Business, which represents 325,000 small U.S. companies, conducted its quadrennial survey earlier this year, its members identified “unreasonable government regulations” as the second-biggest threat, after rising health care costs. And for a fourth year in a row, the CEOs surveyed by the Business Roundtable for its annual economic outlook cited regulation as the top cost pressure facing their companies. Red tape has emerged as a major talking point in the presidential campaign—with each candidate approaching the topic in characteristic fashion. Hillary Clinton has promised to be the “small-business President” and has wonkishly outlined plans to cut red tape by streamlining the startup process for entrepreneurs and expanding access to credit through community banks and credit unions.

For learn more about red tape, watch this Fortune video.

For more on where the Hillary Clinton and Donald Trump stand on regulation, click here.

Red tape is clearly a major source of friction—but is it really strangling business? The answer is less obvious than it may seem. For a phenomenon that’s seemingly ever present, red tape can be harder to pinpoint than you might think. Weighing the costs of regulations against their benefits is not always a straightforward task. How do you tweak your model, for example, to account for slowing down a global-warming Armageddon? Or fully account for the stability—and transparency—that keep your financial markets healthy?

Red tape regulations

FortuneRules and Red TapeNew York TimesMoby Dick

Click image to enlarge.

Cleveland ClinicRed Tape: Its Origins, Uses & Abuses

Read about four industries where technology is racing ahead of regulation here.

AT&TFortuneJPMorgan Chase

To read more on how one small business owner is dealing with regulation, click here.

The Business of America Is LobbyingUnsafe DelaysmakingThe Daily Show

Want to start a taco truck in NYC? Here are all the rules you'll have to know.

AppleIBMA version of this article appears in the Nov. 1, 2016 issue of Fortune with the headline "Red Tape."This story has been updated. An earlier version stated incorrectly that China ranked No. 5 in the World Bank's "Doing Business 2016" report. In fact, Hong Kong ranked No. 5 and China ranked No. 84.