The Public Management of Environmental Risk: Separating Ex Ante and Ex Post Monitors
When firms undertake activities which are environmentally risky, the divergence between social and private incentives to exert safety care requires public intervention. This control occurs both through ex ante regulation and ex post legal investigation. We delineate the respective scopes of those two kinds of monitoring when regulators and judges may not be benevolent. Separation between the ex ante and the ex post monitors of the firm helps to prevent capture. The likelihood of both ex ante and ex post inspections is higher under separation than under integration. This provides a rationale for the widespread institutional trend that has led to the separation of ex ante regulation from ex post prosecution. The robustness of this result is investigated in various extensions. Only when collusion is self-enforcing might it be possible that integration dominates separation.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Apr 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laffont, Jean-Jacques, 2001.
"Incentives and Political Economy,"
Oxford University Press, number 9780199248681, March.
- Faure-Grimaud Antoine & Laffont Jean-Jacques & Martimort David, 2003.
"Risk Averse Supervisors and the Efficiency of Collusion,"
The B.E. Journal of Theoretical Economics,
De Gruyter, vol. 2(1), pages 1-32, January.
- Antoine Faure-Grimaud & Jean-Jacques Laffont & David Martimort, 2002. "Risk averse supervisors and the efficiency of collusion," LSE Research Online Documents on Economics 20, London School of Economics and Political Science, LSE Library.
- Ewerhart, Christian & Schmitz, Patrick W, 1998.
"Ex Post Liability for Harm vs. Ex Ante Safety Regulation: Substitutes or Complements? Comment,"
American Economic Review,
American Economic Association, vol. 88(4), pages 1027, September.
- Ewerhart, Christian & Schmitz, Patrick W., 1998. "Ex Post Liability for Harm vs. Ex Ante Safety Regulation: Substitutes or Complements? Comment," MPRA Paper 13448, University Library of Munich, Germany.
- Marcel Boyer & Donatella Porrini, 2002.
"Modeling the Choice Between Regulation and Liability in Terms of Social Welfare,"
CIRANO Working Papers
- Marcel Boyer & Donatella Porrini, 2004. "Modelling the choice between regulation and liability in terms of social welfare," Canadian Journal of Economics, Canadian Economics Association, vol. 37(3), pages 590-612, August.
- Gary S. Becker, 1974.
"Crime and Punishment: An Economic Approach,"
in: Essays in the Economics of Crime and Punishment, pages 1-54
National Bureau of Economic Research, Inc.
- Laffont, Jean-Jacques & Martimort, David, 1998. "Transaction costs, institutional design and the separation of powers," European Economic Review, Elsevier, vol. 42(3-5), pages 673-684, May.
- Schmitz, Patrick W., 2000.
"On the joint use of liability and safety regulation,"
International Review of Law and Economics,
Elsevier, vol. 20(3), pages 371-382, September.
- Schmitz, Patrick W., 2000. "On the Joint Use of Liability and Safety Regulation," MPRA Paper 12536, University Library of Munich, Germany.
- Jean-Jacques Laffont & David Martimort, 1999.
"Separation of Regulators Against Collusive Behavior,"
RAND Journal of Economics,
The RAND Corporation, vol. 30(2), pages 232-262, Summer.
- Laffont, Jean-Jacques & Martimort, David, 1994. "Separation of Regulators against Collusive Behavior," IDEI Working Papers 44, Institut d'Économie Industrielle (IDEI), Toulouse.
- Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-59, January.
- Faure-Grimaud, Antoine & Martimort, David, 2003. " Regulatory Inertia," RAND Journal of Economics, The RAND Corporation, vol. 34(3), pages 413-37, Autumn.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
- Marcel Boyer & Donatella Porrini, 2000. "Law versus Regulation: A Political Economy Model of Instrument Choice in Environmental Policy," CIRANO Working Papers 2000s-57, CIRANO.
- David P. Baron & David Besanko, 1984. "Regulation, Asymmetric Information, and Auditing," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 447-470, Winter.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:4992. 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: ()
If references are entirely missing, you can add them using this form.