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Regulation, public interest, and private interest: an empirical investigation of firms in Japan

Author

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  • Fumitoshi Mizutani

    (Kobe University)

  • Eri Nakamura

    (Kobe University
    Vienna University of Economics and Business)

Abstract

By using empirical methodology, this paper investigates to what extent the public interest and the private interest theories, respectively, explain the actual regulatory process. Our estimation findings are as follows: First, on average (whole industry basis), the explanation power of the public interest theory is about 46– 78%, while that of the private interest theory is about 22–54%. Second, the explanatory power of the public interest theory is higher in non-public utility industries, while that of the private interest theory is higher in public utility industries. This suggests that regulations on non-public utility industry are constructed largely with social welfare in mind, as assumed in conventional neoclassical welfare economics, but that those in the public utility industry tend to be captured largely by private groups, as assumed in private interest theory.

Suggested Citation

  • Fumitoshi Mizutani & Eri Nakamura, 2019. "Regulation, public interest, and private interest: an empirical investigation of firms in Japan," Empirical Economics, Springer, vol. 56(4), pages 1433-1454, April.
    • Handle: RePEc:spr:empeco:v:56:y:2019:i:4:d:10.1007_s00181-017-1389-0
    DOI: 10.1007/s00181-017-1389-0
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    References listed on IDEAS

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    Cited by:

    1. Mizutani, Fumitoshi & Uranishi, Shuji, 2020. "An analysis of the inter-effect of structural reforms and rail mode share," Research in Transportation Economics, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    Determinants of regulation; Corporate ownership; Public interest theory; Private interest theory;
    All these keywords.

    JEL classification:

    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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