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Transition Policy: A Conceptual Framework

  • Louis Kaplow

Legal change, whether through legislation, regulation, or court decision, is a common phenomenon, and virtually all reform creates both gains and losses for those who under the prior regime took actions that would have lasting effects. This article offers a conceptual framework for assessing the desirability of different transition policies, ranging from compensation of losses and taxation of gains, grandfathering of pre-enactment investments, and delayed or partial implementation to complete and immediate implementation or even retroactive application. Emphasis is placed on how transitions and various mitigation strategies affect the incentives of and risk borne by private actors as well as on the behavior of government and how it may be affected by transition policy.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9596.

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Date of creation: Apr 2003
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Publication status: published as Kaplow, Louis. "Transition Policy: A Conceptual Framework." Journal of Contemporary Legal Issues 13 (2003): 161.
Handle: RePEc:nbr:nberwo:9596
Note: LE PE
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