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The public management of risk: Separating ex ante and ex post monitors

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  • Hiriart, Yolande
  • Martimort, David
  • Pouyet, Jerome

Abstract

When a firm undertakes risky activities, the conflict between social and private incentives to implement safety care requires public intervention which can take the form of both monetary incentives and also ex ante or ex post monitoring, i.e., before or after an accident occurs. We delineate the optimal scope of monitoring depending on whether public monitors are benevolent or corruptible. We show that separating the ex ante and the ex post monitors increases the likelihood of ex post investigation, helps prevent capture and improves welfare.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 94 (2010)
Issue (Month): 11-12 (December)
Pages: 1008-1019

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Handle: RePEc:eee:pubeco:v:94:y:2010:i:11-12:p:1008-1019

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Web page: http://www.elsevier.com/locate/inca/505578

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Keywords: Risk regulation Monitoring Capture Integration and separation;

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References

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Citations

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Cited by:
  1. Bentata Pierre, 2013. "Environmental Regulation and Civil Liability Under Causal Uncertainty: An Empirical Study of the French Legal System," Review of Law & Economics, De Gruyter, vol. 9(2), pages 239-263, October.
  2. Pierre Bentata & Karim Barkat, 2012. "Environmental Liability and Regulation: An Empirical Study of the French Institutional Division of Labour," CAE Working Papers 98, Aix-Marseille Université, CERGAM.
  3. Angelucci, Charles & Russo, Antonio, 2012. "Moral Hazard in Hierarchies and Soft Information," TSE Working Papers 12-343, Toulouse School of Economics (TSE).
  4. Pierre Bentata, 2014. "Liability as a complement to environmental regulation: an empirical study of the French legal system," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(3), pages 201-228, July.
  5. Alfredo Dammert & Arturo Vásquez & Raúl García & Victor Zurita & Humberto Ortiz & Erix Ruiz, 2011. "¿Cuál Es El Costo De La Contaminación Ambiental Minerasobre Los Recursos Hídricos En El Perú?: Comentarios," Documentos de Trabajo 2011-326, Departamento de Economía - Pontificia Universidad Católica del Perú.
  6. Pedro Herrera & Oscar Millones, 2011. "¿Cuál Es El Costo De La Contaminación Ambiental Minera Sobre Los Recursos Hídricos En El Perú?," Documentos de Trabajo 2011-321, Departamento de Economía - Pontificia Universidad Católica del Perú.

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