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Efficient Regulation

  • Andrei Shleifer

Regulation of economic activity is ubiquitous around the world, yet standard theories predict it should be rather uncommon. I argue that the ubiquity of regulation is explained not so much by the failure of markets, or by asymmetric information, as by the failure of courts to solve contract and tort disputes cheaply, predictably, and impartially. The approach accounts for the ubiquity of regulation, for its growth over time, as well as for the fact that contracts themselves are heavily regulated. It also makes predictions, both across activities and across jurisdictions, for the efficiency of regulation and litigation as strategies of enforcing efficient conduct.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15651.

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Date of creation: Jan 2010
Date of revision:
Publication status: published as Efficient Regulation , Andrei Shleifer. in Regulation vs. Litigation: Perspectives from Economics and Law , Kessler. 2011
Handle: RePEc:nbr:nberwo:15651
Note: LE POL
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  1. Nicola Gennaioli & Andrei Shleifer, 2007. "The Evolution of Common Law," Journal of Political Economy, University of Chicago Press, vol. 115, pages 43-68.
  2. Edward L. Glaeser & Andrei Shleifer, 2001. "The Rise of the Regulatory State," NBER Working Papers 8650, National Bureau of Economic Research, Inc.
  3. Pierre Cahuc & Andrei Shleifer & Philippe Aghion & Yann Algan, 2009. "Regulation and Distrust," Sciences Po publications 14648, Sciences Po.
  4. repec:spo:wpecon:info:hdl:2441/8883 is not listed on IDEAS
  5. Andrei Shleifer & Simeon Djankov & Edward L. Glaeser & Rafael La Porta & Florencio Lopez de Silanes, 2003. "The New Comparative Economics," Yale School of Management Working Papers ysm355, Yale School of Management.
  6. Edward Glaeser & Simon Johnson & Andrei Shleifer, 2001. "Coase Versus The Coasians," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 853-899, August.
  7. Joshua Schwartzstein & Andrei Shleifer, 2009. "An Activity-Generating Theory of Regulation," NBER Working Papers 14752, National Bureau of Economic Research, Inc.
  8. Casey B. Mulligan & Andrei Shleifer, 2005. "The Extent of the Market and the Supply of Regulation," The Quarterly Journal of Economics, MIT Press, vol. 120(4), pages 1445-1473, November.
  9. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
  10. Lopez-de-Silanes, Florencio & La Porta, Rafael & Shleifer, Andrei, 2008. "The Economic Consequences of Legal Origins," Scholarly Articles 2962610, Harvard University Department of Economics.
  11. Anthony Niblett & Richard Posner & Andrei Shleifer, 2008. "The Evolution of a Legal Rule," NBER Working Papers 13856, National Bureau of Economic Research, Inc.
  12. Giacomo A. M. Ponzetto & Patricio A. Fernandez, 2008. "Case Law versus Statute Law: An Evolutionary Comparison," The Journal of Legal Studies, University of Chicago Press, vol. 37(2), pages 379-430, 06.
  13. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
  14. Oliver Hart, 2009. "Regulation and Sarbanes-Oxley," Journal of Accounting Research, Wiley Blackwell, vol. 47(2), pages 437-445, 05.
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