Regulatory agencies and regulatory risk
The aim of this paper is to show that regulatory risk is due to the discretionary behaviour of regulatory agencies, caused by a too extensive regulatory mandate provided by the legislator. The normative point of reference and a behavioural model of regulatory agencies based on the positive theory of regulation are presented. Regulatory risk with regard to the future behaviour of regulatory agencies is modelled as the consequence of the ex ante uncertainty about the relative influence of interest groups in the regulatory process. The problem of regulatory risk is analysed separately in competitive network areas and in non-competitive network areas. For both cases a specific measure of regulatory risk is proposed. But measurement and compensation are different issues. The im-possibility of compensating for regulatory risk is demonstrated. Finally, the disaggregated regulatory mandate is presented as an institutional reform approach.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: Kollegiengebäde II, Platz der Alten Synagoge, 79085 Freiburg|
Phone: +49 +761 / 203 2301
Fax: +49 +761 / 203 2303
Web page: http://portal.uni-freiburg.de/vw/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756.
- David Besanko & Daniel F. Spulber, 1992. "Sequential-Equilibrium Investment by Regulated Firms," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 153-170, Summer.
- Roger Buckland & Patricia Fraser, 2001. "Political and Regulatory Risk in Water Utilities: Beta Sensitivity in the United Kingdom," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 28(7&8), pages 877-904.
- Gaggero, Alberto A., 2007. "Regulatory risk in the utilities industry: An empirical study of the English-speaking countries," Utilities Policy, Elsevier, vol. 15(3), pages 191-205, September.
- Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
- G. Knieps, 2005. "Telecommunications Markets in the Stranglehold of EU Regulation: On the need for a disaggregated regulatory contract," Competition and Regulation in Network Industries, Intersentia, vol. 6(2), pages 75-94, June.
- George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
- Knieps, Günter, 2005. "Telecommunications markets in the stranglehold of EU regulation: on the need for a disaggregated regulatory contract," Discussion Papers 109 [rev.], University of Freiburg, Institute for Transport Economics and Regional Policy.
- Knieps, Gunter, 1997. "Phasing Out Sector-Specific Regulation in Competitive Telecommunications," Kyklos, Wiley Blackwell, vol. 50(3), pages 325-39.
- Chang, Mo Ahn & Thompson, Howard E, 1989. "An Analysis of Some Aspects of Regulatory Risk and the Required Rate of Return for Public Utilities," Journal of Regulatory Economics, Springer, vol. 1(3), pages 241-57, September.
- Richard A. Posner, 1974.
"Theories of Economic Regulation,"
Bell Journal of Economics,
The RAND Corporation, vol. 5(2), pages 335-358, Autumn.
- Blankart, Charles B. & Knieps, Günter & Zenhäusern, Patrick, 2007. "Regulation of new markets in telecommunications? Market dynamics and shrinking monopolistic bottlenecks," Discussion Papers 112 [rev.], University of Freiburg, Institute for Transport Economics and Regional Policy.
- Weingast, Barry R & Moran, Mark J, 1983. "Bureaucratic Discretion or Congressional Control? Regulatory Policymaking by the Federal Trade Commission," Journal of Political Economy, University of Chicago Press, vol. 91(5), pages 765-800, October.
- Stewart C. Myers, 1972. "The Application of Finance Theory to Public Utility Rate Cases," Bell Journal of Economics, The RAND Corporation, vol. 3(1), pages 58-97, Spring.
- Joshua Gans & Stephen King, 2003. "Access Holidays for Network Infrastructure Investment," Monash Economics Working Papers archive-39, Monash University, Department of Economics.
- Spulber, Daniel F & Besanko, David, 1992. "Delegation, Commitment, and the Regulatory Mandate," Journal of Law, Economics and Organization, Oxford University Press, vol. 8(1), pages 126-54, March.
When requesting a correction, please mention this item's handle: RePEc:zbw:aluivr:118r. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.