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Transition Policy: A Conceptual Framework

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  • Louis Kaplow

Abstract

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.

Suggested Citation

  • Louis Kaplow, 2003. "Transition Policy: A Conceptual Framework," NBER Working Papers 9596, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9596
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    References listed on IDEAS

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    Cited by:

    1. Louis Kaplow, 2006. "Capital Levies and Transition to a Consumption Tax," NBER Working Papers 12259, National Bureau of Economic Research, Inc.
    2. Yun‐chien Chang, 2009. "Empire Building and Fiscal Illusion? An Empirical Study of Government Official Behaviors in Takings," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 6(3), pages 541-584, September.
    3. Gligor Bishev & Mihail Petkovski, 2004. "Understanding Reforms in Macedonia," wiiw Balkan Observatory Working Papers 42, The Vienna Institute for International Economic Studies, wiiw.
    4. Coysh, Daniel & Johnstone, Nick & Kozluk, Tomasz & Nachtigall, Daniel & Cárdenas Rodríguez, Miguel, 2020. "Vintage differentiated regulations and plant survival: Evidence from coal-fired power plants," Ecological Economics, Elsevier, vol. 176(C).

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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