> This implicitly assumes that the future government wouldn't implement the non-beneficial regulations if the current government doesn't do the beneficial ones

No, there is another case you haven't covered. The situation in which regulation, made in the best of its ability to combat a problem at the time, now hinders progress more than it helps. Either the incentives were malformed and misaligned from the start, or the solution was targeting an ephemeral problem and written in a way where interpretations can be abused to target newer solutions for newer problems.