Does the Separation of Regulatory Powers Reduce the Threat of Capture? Evidence from the US Maritime Bureaucracy
AbstractRecent economic theories have investigated the susceptibility of diverse public bureaucratic structures to capture by private industry. In particular, Laffont and Martimort (1999) propose that the separation of regulatory powers will reduce the threat of capture. We analyse investor reaction to a reorganization of the United States maritime bureaucracy that created two separate agencies to carry out the duties previously assigned to a single entity. We find strong evidence that investors interpreted the agency split as detrimental to ocean carriers, supporting the theory advanced by Laffont and Martimort. We also find some evidence that net exporting industries benefited from separation.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4093.
Date of creation: Oct 2003
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Find related papers by JEL classification:
- H1 - Public Economics - - Structure and Scope of Government
- K2 - Law and Economics - - Regulation and Business Law
- L5 - Industrial Organization - - Regulation and Industrial Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-13 (All new papers)
- NEP-COM-2004-02-29 (Industrial Competition)
- NEP-LAW-2004-06-13 (Law & Economics)
- NEP-POL-2004-06-13 (Positive Political Economics)
- NEP-REG-2004-06-13 (Regulation)
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