AbstractRegulation of economic activity is ubiquitous around the world, yet standard theories predict it should be rather uncommon. I argue that the ubiquity of regulation is explained not so much by the failure of markets, or by asymmetric information, as by the failure of courts to solve contract and tort disputes cheaply, predictably, and impartially. The approach accounts for the ubiquity of regulation, for its growth over time, as well as for the fact that contracts themselves are heavily regulated. It also makes predictions, both across activities and across jurisdictions, for the efficiency of regulation and litigation as strategies of enforcing efficient conduct.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15651.
Date of creation: Jan 2010
Date of revision:
Publication status: published as Andrei Shleifer. "Efficient Regulation," in Daniel P. Kessler, editor, "Regulation vs. Litigation: Perspectives from Economics and Law" University of Chicago Press (2011)
Note: LE POL
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Other versions of this item:
- K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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