Network industries and regulatory jurisdiction
AbstractThis paper presents new developments in the economics of federalism to analyze the determinants of specific investments in network industries and the interaction between structural and behavioral regulation. Central or federal policy making is more focused and specialized and makes it more difficult for interest groups to organize. Under some conditions, however, central powers will be associated with more underinvestment than local powers. The latter cannot afford specific regulation due to high fixed administrative costs, but may use other policy objectives as a commitment device. When technology allows the introduction of competition in some segments, the possibilities for organizing the institutional architecture of regulation expand. Liberalization will typically require institutional cooperation, but cooperation has costs and may be inhibited by distributional concerns.
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Bibliographic InfoPaper provided by IESE Business School in its series IESE Research Papers with number D/859.
Length: 31 pages
Date of creation: 05 May 2010
Date of revision:
Network Industries; Regulatory Jurisdiction; Cooperation; Liberalization;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-25 (All new papers)
- NEP-IND-2010-09-25 (Industrial Organization)
- NEP-NET-2010-09-25 (Network Economics)
- NEP-REG-2010-09-25 (Regulation)
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