> It seems intuitively plausible to me that regulation like SOX can be both beneficial in terms of trust in the markets and a deterrent for smaller companies to go public.

While I agree, I think the problem here is that many, many things are intuitively plausible. Maybe market fraud is increased and the markets are less safe for small businesses, or maybe policies or custom or collusion have cemented big players who have less interest in small companies. We need data and reason to sort the wheat from the chaff.

Our intuitions suck. If they were good, we would have had the right physics in 1,000 BCE instead of 1900 CE. (Not my line, but a good one.)

Not your original point, but as a physicist, I chuckle at the proposition that we had "the right physics" in 1900 CE. The turn of the century marks the discovery of quantum physics and relativity, demonstrating that we're not even close to "the right physics".

Yeah, I thought for about 15 seconds before choosing that date, but then decided it wasn't too important. Perhaps the better way to express it is, 'when did we not have the wrong physics'? When did we jettison alchemy and the rest forever in favor of modern science?

I'd guess earlier than 1900, but I don't know. And of course, there are many gray areas.

> When did we jettison alchemy and the rest forever in favor of modern science?

Wake me up when people stop believing in homeopathy.

I agree. Unfortunately it is extremely difficult to measure the effects of any particular regulation. It's a one-off, under very specific historical circumstances and it interacts with a huge number of equally unrepeatable events.

I don't envy economists. No double-blind lab trials here. Even if we had Putnams Twin Earth our experiments would probably fail for some weird semantic reason :)