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

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  • Yolande Hiriart

    (LERNA - Economie des Ressources Naturelles - UT1 - Université Toulouse 1 Capitole - INRA - Institut National de la Recherche Agronomique - CEA - Commissariat à l'énergie atomique et aux énergies alternatives, TSE - Toulouse School of Economics - Toulouse School of Economics, IDEI - Institut d'économie industrielle - UT1 - Université Toulouse 1 Capitole)

  • David Martimort

    (TSE - Toulouse School of Economics - Toulouse School of Economics, IDEI - Institut d'économie industrielle - UT1 - Université Toulouse 1 Capitole, GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT1 - Université Toulouse 1 Capitole - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

  • Jérôme Pouyet

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

Abstract

When a firm undertakes risky activities, the conflict between social and private incentives to exercise safety care requires public intervention. This control takes the form of both monetary incentives but also monitoring taking place either ex ante or ex post, i.e. before or after an accident occurs. We delineate the respective scopes of these monitoring activities when public monitors are either benevolent or corruptible. Separation between the ex ante and the ex post monitors helps to prevent capture, increases the likelihood of ex post investigation and improves welfare.

Suggested Citation

  • Yolande Hiriart & David Martimort & Jérôme Pouyet, 2009. "The public management of risk: Separating ex ante and ex post monitors," PSE Working Papers halshs-00566863, HAL.
  • Handle: RePEc:hal:psewpa:halshs-00566863 Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00566863
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pierre Bentata, 2014. "Liability as a complement to environmental regulation: an empirical study of the French legal system," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(3), pages 201-228, July.
    2. Luttmer, Erzo G.J. & Mariotti, Thomas, 2007. "Efficiency and equilibrium when preferences are time-inconsistent," Journal of Economic Theory, Elsevier, pages 493-506.
    3. Reyes Renny & Romano Alessandro & Sottilotta Cecilia Emma, 2015. "Regulatory Impact Assessment in Mexico: A Story of Interest Groups Pressure," The Law and Development Review, De Gruyter, pages 99-121.
    4. Alessandro De Chiara & Luca Livio, 2012. "Truthful Reporting, Moral Hazard and Purely Soft Information," Working Papers ECARES ECARES 2012-029, ULB -- Universite Libre de Bruxelles.
    5. Alessandro De Chiara & Luca Livio, 2015. "The Threat of Corruption and the Optimal Supervisory Task," Working Papers ECARES ECARES 2015-37, ULB -- Universite Libre de Bruxelles.
    6. Bentata Pierre, 2013. "Environmental Regulation and Civil Liability Under Causal Uncertainty: An Empirical Study of the French Legal System," Review of Law & Economics, De Gruyter, pages 239-263.
    7. Pierre Bentata & Karim Barkat, 2012. "Environmental Liability and Regulation: An Empirical Study of the French Institutional Division of Labour," CAE Working Papers 98, Aix-Marseille Université, CERGAM.
    8. Stavros A. Drakopoulos & Ioannis Theodossiou, 2016. "Workers’ risk underestimation and occupational health and safety regulation," European Journal of Law and Economics, Springer, pages 641-656.
    9. De Chiara, Alessandro & Livio, Luca, 2017. "The threat of corruption and the optimal supervisory task," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 172-186.
    10. Billette de Villemeur, Etienne & Leroux, Justin, 2016. "A liability approach to climate policy: A thought experiment," MPRA Paper 75497, University Library of Munich, Germany.
    11. Yinghua He & Antonio Miralles & Jianye Yan, 2012. "Competitive Equilibrium from Equal Incomes for Two-Sided Matching," Working Papers 692, Barcelona Graduate School of Economics.
    12. Pedro Herrera & Oscar Millones, 2011. "¿Cuál Es El Costo De La Contaminación Ambiental Minera Sobre Los Recursos Hídricos En El Perú?," Documentos de Trabajo / Working Papers 2011-321, Departamento de Economía - Pontificia Universidad Católica del Perú.
    13. Yolande Hiriart & David Martimort, 2006. "The benefits of extended liability," RAND Journal of Economics, RAND Corporation, pages 562-582.
    14. Etienne Billette de Villemeur & Justin Leroux, 2015. "Track-and-Trade: A liability approach to climate policy," CIRANO Working Papers 2015s-18, CIRANO.
    15. Goldlücke, Susanne & Schmitz, Patrick W., 2016. "Pollution Claim Settlements Reconsidered: Hidden Information and Bounded Payments," CEPR Discussion Papers 11217, C.E.P.R. Discussion Papers.
    16. Alfredo Dammert & Arturo Vásquez & Raúl García & Victor Zurita & Humberto Ortiz & Erix Ruiz, 2011. "¿Cuál Es El Costo De La Contaminación Ambiental Minerasobre Los Recursos Hídricos En El Perú?: Comentarios," Documentos de Trabajo / Working Papers 2011-326, Departamento de Economía - Pontificia Universidad Católica del Perú.
    17. Yolande Hiriart & David Martimort, 2006. "The benefits of extended liability," RAND Journal of Economics, RAND Corporation, pages 562-582.

    More about this item

    Keywords

    risk regulation; monitoring; capture; integration and separation;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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