Dependent Controllers and Regulation Policies: Theory and Evidence
AbstractThis paper analyzes the effects of supervisors’ (i.e., regulators and judges) selection rules on regulated prices. A checks and balances’ regulatory review process strengthens the role of the judicial power and election increases the populism of implicitly motivated supervisors. Election arises when the risk related to expropriation of sunk investments and the inter-party distance are lower. Employing U.S. electric power market’s data, the empirical evidence strongly confirms these predictions. Indeed, when treated as endogenous, only the election of administrative law judges and not the one of regulators significantly lowers the level of electricity rates. Moreover a more effective supervision technology shows a marginal negative effect on regulated rates as well.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2006.109.
Date of creation: Aug 2006
Date of revision:
Election; Agency; Judges; Regulation; Electricity;
Find related papers by JEL classification:
- K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-10-07 (All new papers)
- NEP-ENE-2006-10-07 (Energy Economics)
- NEP-LAW-2006-10-07 (Law & Economics)
- NEP-REG-2006-10-07 (Regulation)
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- Estache, Antonio & Wren-Lewis, Liam, 2010.
"What Anti-Corruption Policy Can Learn from Theories of Sector Regulation,"
CEPR Discussion Papers
8082, C.E.P.R. Discussion Papers.
- Antonio Estache & Liam Wren-Lewis, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," Working Papers ECARES ECARES 2010-033, ULB -- Universite Libre de Bruxelles.
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