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Testing which proposed regulations need “competition-proofing”

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Author Info
Sean Lyons () (Department of Economics, Trinity College)

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Abstract

When assessing the likely net impact of regulation, many jurisdictions test for specific effects on areas of concern, such as small businesses or the environment, as well as for more generalised costs and benefits. This paper considers how best to design a negative-clearance test for the competition effects of regulations. We start by examining the well-documented UK “competition filter”, which proves to have serious shortcomings. Important classes of potentially damaging measures will not trigger the UK filter, and we illustrate this by applying the filter to four controversial measures that are currently, or were recently, on the statute books in Ireland. Structural and other features of the UK filter that lead to these outcomes are identified. We then outline an alternative test structure that should reduce such “false negatives” while remaining practical to apply.

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File URL: http://www.tcd.ie/Economics/TEP/2005_papers/TEP20.pdf
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Publisher Info
Paper provided by Trinity College Dublin, Department of Economics in its series Trinity Economics Papers with number tep20020.

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Length: 31 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:tcd:tcduee:tep20020

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Postal: Trinity College, Dublin 2
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Find related papers by JEL classification:
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
K20 - Law and Economics - - Regulation and Business Law - - - General
K29 - Law and Economics - - Regulation and Business Law - - - Other

References listed on IDEAS
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  1. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring. [Downloadable!] (restricted)
  2. Nancy L. Rose, 1985. "The Incidence of Regulatory Rents in the Motor Carrier Industry," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 299-318, Autumn. [Downloadable!] (restricted)
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