IDEAS home Printed from https://ideas.repec.org/a/mhr/jinste/urnsici0932-4569(199912)1554_696iipr_2.0.tx_2-b.html
   My bibliography  Save this article

Investing in Policy Reform

Author

Listed:
  • Jim Leitzel
  • Erik Weisman

Abstract

Sunk costs and uncertainty characterize many public policy changes, as well as private investments. The Dixit-Pindyck theory of investment under uncertainty can then be applied to policy reforms, generating a positive option value to delaying a policy reform. The potential to adjust enforcement provides an additional lever for policy makers, as examined here with respect to enforcing a drug prohibition. Control over enforcement can make it optimal to further delay ending a drug ban. A de jure drug legalization is then likely to follow de facto liberalization, as enforcement effort is first reduced.

Suggested Citation

  • Jim Leitzel & Erik Weisman, 1999. "Investing in Policy Reform," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(4), pages 696-696, December.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(199912)155:4_696:iipr_2.0.tx_2-b
    as

    Download full text from publisher

    File URL: http://www.ingentaconnect.com/content/mohr/jite/1999/00000155/00000004/art00007
    Download Restriction: Fulltext access is included for subscribers to the printed version.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grier, Kevin & Sutter, Daniel, 2007. "External influences on economic reform: Reform as a regional public good," European Journal of Political Economy, Elsevier, vol. 23(3), pages 660-673, September.
    2. Wesseler, Justus & Scatasta, Sara & Nillesen, Eleonora, 2007. "The maximum incremental social tolerable irreversible costs (MISTICs) and other benefits and costs of introducing transgenic maize in the EU-15," MPRA Paper 33229, University Library of Munich, Germany.
    3. Yunker, James A., 2012. "Estimated optimal drug law enforcement expenditures based on U.S. annual data," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 356-371.

    More about this item

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(199912)155:4_696:iipr_2.0.tx_2-b. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert). General contact details of provider: https://www.mohr.de/jite .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.