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The Public Management of Risk: Separating Ex Ante and Ex Post Monitors

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  • Yolande Hiriart

    (Toulouse School of Economics (IDEI-LERNA))

  • David Martimort

    (Toulouse School of Economics (EHESS, IDEI-GREMAQ))

  • Jerome Pouyet

    (Paris School of Economics)

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 but 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

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2010.144.

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Date of creation: Nov 2010
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Handle: RePEc:fem:femwpa:2010.144

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Keywords: Risk Regulation; Monitoring; Capture; Integration; Separation;

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Citations

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Cited by:
  1. 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.
  2. Pierre Bentata & Karim Barkat, 2012. "Environmental Regulation and Civil Liability Under Causal Uncertainty: An Empirical Study of the French Legal System," CAE Working Papers 97, Aix-Marseille Université, CERGAM.
  3. 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.
  4. 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.
  5. Angelucci, Charles & Russo, Antonio, 2012. "Moral Hazard in Hierarchies and Soft Information," TSE Working Papers 12-343, Toulouse School of Economics (TSE).

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