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The public management of risk: Separating ex ante and ex post monitors

Listed author(s):
  • Yolande Hiriart

    (CRESE - Centre de REcherches sur les Stratégies Economiques - UFC - UBFC - Université Bourgogne Franche-Comté - UFC - Université de Franche-Comté)

  • David Martimort

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris, PSE - Paris School of Economics)

  • Jérôme Pouyet

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris, PSE - Paris School of Economics)

When a firm undertakes risky activities, the conflict between social and private incentives to implement safety care requires public intervention which can take the form of both monetary incentives and also ex ante or ex post monitoring, i.e., before or after an accident occurs. We delineate the optimal scope of monitoring depending on whether public monitors are benevolent or corruptible. We show that separating the ex ante and the ex post monitors increases the likelihood of ex post investigation, helps prevent capture and improves welfare.

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Paper provided by HAL in its series Post-Print with number halshs-00754410.

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Date of creation: Dec 2010
Publication status: Published in Journal of Public Economics, Elsevier, 2010, 94 (11-12), pp.1008-1019. 〈10.1016/j.jpubeco.2010.07.005〉
Handle: RePEc:hal:journl:halshs-00754410
DOI: 10.1016/j.jpubeco.2010.07.005
Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/halshs-00754410
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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