Measuring Government Policy with Text Analysis

Most governments would claim to support business, but is government policy enhancing business activity or constraining it? Are government regulations becoming more or less business friendly? Is government policy more favourable to some sectors of business than others? These and similar questions are ones that citizens and businesses ask every day.

It has been difficult for social scientists to measure governments’ business policies. Until now, such assessments have mainly been made through broad-brush surveys of regulatory environments, which have been limited in scope and frequency. This project offers a better way of measuring the effects of government policy on business.

By applying advanced computational linguistics in order to undertake a computerised text analysis of government policy, the project will provide a detailed picture of government policy. Since June 2004, all UK legislation has contained an explanatory memorandum detailing the impact of the legislation on businesses. This valuable material has until now been overlooked, but it provides an unparalleled opportunity to look in detail at the impact on business of each and every piece of legislation issued by the government – regardless of the policy field.

The project will provide citizens and businesses with highly sought information on the business friendliness of government policy. There is also increasing interest in the link between government actions and the decisions of economic actors such as businesses, households and banks. The results of this project will help give us a clearer idea of that relationship, and help us understand how markets respond to changes in legislation.