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Choosing Whether to Comply with a General Duty or with a Specification Standard

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  • Calcott Paul

    (Victoria University of Wellington, Wellington, New Zealand)

Abstract

Regulated firms sometimes have a choice about whether to discharge a general duty or to comply with specification standards. This paper formalizes rationales for giving firms such a choice, but also points out drawbacks. One rationale is that choice can make compliance less onerous and hence more attractive. A second rationale is that the more socially efficient form of compliance can vary among firms. Whether this approach actually would be conducive to social efficiency depends on a range of factors, including the proportion of firms that would otherwise comply, the inflexibility that specification standards impose on firms, and on how strictly general duties would be interpreted.

Suggested Citation

  • Calcott Paul, 2018. "Choosing Whether to Comply with a General Duty or with a Specification Standard," Review of Law & Economics, De Gruyter, vol. 14(2), pages 1-21, July.
    • Handle: RePEc:bpj:rlecon:v:14:y:2018:i:2:p:21:n:2
    DOI: 10.1515/rle-2016-0004
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    References listed on IDEAS

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    1. Burrows, Paul, 1999. "Combining regulation and legal liability for the control of external costs," International Review of Law and Economics, Elsevier, vol. 19(2), pages 227-244, June.
    2. W. Kip Viscusi, 1996. "Economic Foundations of the Current Regulatory Reform Efforts," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 119-134, Summer.
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    More about this item

    Keywords

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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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