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Testing which proposed regulations need competition-proofing

Author

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  • Sean Lyons

    (Department of Economics, Trinity College)

Abstract

When assessing the likely net impact of regulation, many jurisdictions test for specific effects on areas of concern, such as small businesses or the environment, as well as for more generalised costs and benefits. This paper considers how best to design a negative-clearance test for the competition effects of regulations. We start by examining the well-documented UK competition filter , which proves to have serious shortcomings. Important classes of potentially damaging measures will not trigger the UK filter, and we illustrate this by applying the filter to four controversial measures that are currently, or were recently, on the statute books in Ireland. Structural and other features of the UK filter that lead to these outcomes are identified. We then outline an alternative test structure that should reduce such false negatives while remaining practical to apply.

Suggested Citation

  • Sean Lyons, 2005. "Testing which proposed regulations need competition-proofing," Trinity Economics Papers tep20020, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:tep20020
    as

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    File URL: http://www.tcd.ie/Economics/TEP/2005_papers/TEP20.pdf
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    References listed on IDEAS

    as
    1. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    2. Nancy L. Rose, 1985. "The Incidence of Regulatory Rents in the Motor Carrier Industry," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 299-318, Autumn.
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    Cited by:

    1. Gorecki, Paul K., 2009. "The Recession, Budgets, Competition, and Regulation: Should the State Supply Bespoke Protection?," Papers BP2010/2, Economic and Social Research Institute (ESRI).
    2. repec:esr:chaptr:jacb200962 is not listed on IDEAS
    3. Sean Lyons & Francis O'Toole, 2006. "Conceptual And Applied Problems With The Uk Competition Filter," Journal of Competition Law and Economics, Oxford University Press, vol. 2(4), pages 683-696.

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    More about this item

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • K29 - Law and Economics - - Regulation and Business Law - - - Other

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