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on Regulation |
| By: | Halton Cheadle (Faculty of Law, University of Cape Town) |
| Abstract: | Abstract: The object of the paper is to identify the conceptual underpinnings of the labour law reforms of the 1990s, particularly the concept of regulated flexibility, and the changes to the labour market since then in order to review the performance of those reforms and to propose changes to more appropriately regulate that market. The main argument made in this paper is that the concept of regulated flexibility may be put to good use in extending protection to those who most need it and limiting intervention, particularly judicial intervention, where there is no appreciable gain in protection. The paper reviews the regulation each of the standard incidents of the employment relationship, from recruitment to termination, and finds that much of this regulation (in the form of an unfair labour practice remedy) escaped careful scrutiny in the reform process in the 1990s. The unfair labour practice remedy has, for the most part, become a charter of rights for middle and senior management while the most vulnerable workers are left without protection. Rather than intensifying regulation, labour law reform should be setting its sights on the extension of protection to those who most need it, namely employees in atypical employment. The paper makes various proposals to fine-tune the legal regulation of the labour market, in particular removing unnecessary regulation in the form of judicial interference in the employment relation and extending legislative protection to the most vulnerable. |
| Keywords: | SMMEs, Regulating flexibility and Small Business. LRA, BCEA |
| JEL: | A1 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:9615&r=reg |
| By: | Birgit Schmitz (IIW Institute for International Economics University of Bonn) |
| Abstract: | The Basel Committee on Banking and Supervision established minimum capital requirements for banks in their 1988 Capital Accord. This capital regulation was adopted for European Union banks at the beginning of 1993. After the implementation, a widespread concern emerged about the possible negative impact that higher capital requirements could exert on the level of economic activity, especially on bank lending. This paper investigates the impact of the Basel Accord on bank deposits and loans for eight European countries. We follow the approach taken by Peek and Rosengren (1995a) and test for the regulatory effect in a panel structure with about 2500 individual bank balance sheets for the years 1993-1995. We find that changes in deposits are positively correlated with changes in capital. Lower-capitalized banks show a stronger response to a change in capital than their higher-capitalized competitors. This evidence is consistent with the hypothesis that the implementation of minimum capital requirements had a negative effect on the supply of bank loans |
| Keywords: | Bank capital regulation, Basel Accord of 1988, EU Banking |
| JEL: | G21 G28 |
| Date: | 2007–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:mmf:mmfc06:42&r=reg |
| By: | Baake, Pio; Kamecke, Ulrich; Wey, Christian |
| Abstract: | The future of the information society crucially depends on investments in upgrading existing infrastructures and building new networks. Traditional cost-based regulation, which focuses on issues of static efficiency and service-based competition necessarily has negative effects on innovation incentives and the emergence of infrastructure-based competition in the highly dynamic telecommunications industry. This paper presents a regulatory framework for new infrastructures, which makes ex ante regulation contingent to the tendency towards effective competitive structures. Unlike the standard Significant Market Power-test (SMP), this approach takes a longer term perspective and therefore secures operators' investment incentives. The proposal has several desirable incentive effects. Firstly, it counters incentives to free-ride on investments by potential competitors, and secondly, it makes preemptive and other predatory practices by the investing firm less attractive. As a result, our proposal of contingent regulation in emerging markets promotes infrastructure-based competition in telecommunications. |
| Keywords: | new markets; infrastructure investments; regulation |
| JEL: | L90 L43 K23 L96 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2518&r=reg |
| By: | Federica Maiorano (Department of Economics, City University, London); Jon Stern (Department of Economics, City University, London) |
| Abstract: | This paper studies the relationship between regulation and performance in the mobile telecommunications sector. The analysis takes account of the economic impact of telecommunications infrastructure on aggregate income and of the role of country institutions in promoting economic growth. More specifically, we try to separate the impact of regulation from the potential indirect effects due to country institutions. We address these questions by estimating a system of equations for a panel of 30 low and middle-income countries over the 1990 - 2004 period. In summary, the evidence we present confirms the positive effect of regulatory institutions on telecommunications penetration and also highlights the contribution of a more widespread mobile telecommunications infrastructure to higher levels of GDP per capita. |
| Keywords: | Telecommunications, Regulation, Institutions, Growth |
| JEL: | L51 L96 O43 |
| Date: | 2007–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:cty:dpaper:0706&r=reg |
| By: | Alleman, James; Rappoport, Paul |
| Abstract: | Regulation is presumed to be designed to avoid (potential) market failures,usually because of firms' market power, the consequence of which leads to a decrease in economic welfare. However, the cost of regulation may outweigh any effects policy makers have on the firm due to administrative costs, regulatory capture and other effects that have been addressed by others. More importantly, policy makers have been using the wrong models to guide their decisions, with a major impact on the investment incentives of firms, a misallocation of resources and a lowering of social welfare. As policy makers misread economic theory, they produce results worse than those they are attempting to correct. Thus, these distorting effects are equally as bad, or worse than, the market failure regulators hoped to ameliorate. However, this need not be the case. By concentration on dynamic models, rather than the simple static models on which policy makers have focused, it is possible to improve economics welfare and obtain results that at least are better than the costs associated with current regulatory practices. Ofcom appears to be moving in this direction. Will other policy makers learn from Ofcom? This paper shows some of the failures of the current model and sets forth some of the necessary steps to make improvements. However, it is unclear whether the institutional structures will allow for such a departure from the current paradigm. |
| Keywords: | competition; economic dynamics; neoclassical economics; pricing policy; regulation. |
| JEL: | L90 L43 K23 L96 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2517&r=reg |
| By: | Iván Moreno Torres; Jaume Puig; Joan-Ramon Borrell-Arqué |
| Abstract: | The aim of this paper is to analyse empirically entry decisions by generic firms into markets with tough regulation. Generic drugs might be a key driver of competition and cost containment in pharmaceutical markets. The dynamics of reforms of patents and pricing across drug markets in Spain are useful to identify the impact of regulations on generic entry. Estimates from a count data model using a panel of 86 active ingredients during the 1999–2005 period show that the drivers of generic entry in markets with price regulations are similar to less regulated markets: generic firms entries are positively affected by the market size and time trend, and negatively affected by the number of incumbent laboratories and the number of substitutes active ingredients. We also find that contrary to what policy makers expected, the system of reference pricing restrains considerably the generic entry. Short run brand name drug price reductions are obtained by governments at the cost of long run benefits from fostering generic entry and post-patent competition into the markets. |
| Keywords: | Entry; Generic Drugs; Pharmaceutical industry; Reference pricing |
| JEL: | I11 L11 L65 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfses:1014&r=reg |
| By: | Benno Torgler; Neven T. Valev |
| Abstract: | In recent years the topics of illegal activities such as corruption or tax evasion have attracted a great deal of attention. However, there is still a lack of substantial empirical evidence about the determinants of compliance. The aim of this paper is to investigate empirically whether women are more willing to be compliant than men focusing on corruption and tax evasion and whether we observe (among women and in general) differences in attitudes among similar age groups in different time periods (cohort effect) or changing attitudes of the same cohorts over time (age effect). Method. Thus, this paper will use data from eight Western European countries from the World Values Survey and the European Values Survey that span the period from 1981 to 1999. Results. The results reveal higher willingness to comply among women and an age rather than a cohort effect. Conclusions. Thus, our results are in line with previous studies that found strong gender differences but are not in line with the equality and role theory that would suggest a decrease of gender differences with greater equality of status between men and women over time. |
| Date: | 2007–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:214&r=reg |
| By: | Felix Höffler (Max Planck Institute for Research on Collective Goods, Kurt-Schumacher-Str. 10, 53113 Bonn, Germany. hoeffler@coll.mpg.de); Klaus M. Schmidt (Department of Economics, University of Munich, Ludwigstrasse 28, 80539 Muenchen, Germany. klaus.schmidt@lrz.uni-muenchen.de) |
| Abstract: | In some markets vertically integrated firms sell directly to final customers hut also to independent downstream firms with whom they then compete on the downstream market. It is often argued that resellers intensify competition and benefit consumers, in particular when wholesale prices are regulated. However, we show that (i) resale may increase prices and make consumers worse off and that (ii) standard "retail minus X regulation" may increase prices and harm consumers. Our analysis suggests that this is more likely if the number of integrated firms is small, the degree of product differentiation is low, and/or if competition is spatial. |
| Keywords: | Resale regulation, wholesale, spatial product differentiation, non-spatial product differentiation, vertical restraints |
| JEL: | D43 L11 L42 L51 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:198&r=reg |
| By: | John Schmitt; David Howell |
| Abstract: | The widely held view that French economic performance is poor and that French employment performance is catastrophic, flies in the face of the evidence, according to this report. |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2006-06&r=reg |
| By: | FRANCISCO MARCOS (Instituto de Empresa); JUAN SANTALO (Instituto de Empresa) |
| Abstract: | We study empirically the determinants of public tomb prices in a sample of Spanish towns. We document strong evidence in favor that cemeteries act as local monopolies that use second degree price discrimination to maximize profits. Additionally we report that local cemetery prices react to competition from private cremation companies. This competition is associated with lower price dispersion caused by an increase in the minimum niche prices with no effect on other higher niche prices. We conclude that cemeteries have accommodated and facilitated entry of private cremation companies through an increase in those niche prices more likely to affect cremation demand. |
| Keywords: | Administrative law, Non-market regulation, Public prices |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:emp:wpaper:wp07-09&r=reg |
| By: | Oberndorfer, Ulrich; Rennings, Klaus |
| Abstract: | This literature review analyses the impacts of the EU ETS on competitiveness focussing on existing simulation studies. We have identified the choice of the reference scenario as the most critical issue for an appropriate analysis of the relevant literature. We find, however, that effects of the scheme on competitiveness are modest, even given the business as usual case that does not take the legally binding framework of the Kyoto Protocol into account. Furthermore, the impacts of the EU ETS are smaller than the impacts of alternative Kyoto-based regulation scenarios. Compared to these other regulation methods ETSs can have positive competitiveness effects. However, the EU ETS is not designed to boost Europe’s economy. Its prime purpose and justification is to ensure that Europe’s CO2 emissions are brought down and Kyoto targets are reached at minimal costs. To our opinion, it is therefore important that the system as well as modifications to it do not undermine the environmental goals associated with this policy instrument. |
| Keywords: | emissions trading, competitiveness, environmental regulation |
| JEL: | Q21 Q28 Q43 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5445&r=reg |
| By: | Paul Benjamin; Carola Gruen (Cheadle Thompson & Haysom Inc.) |
| Abstract: | Abstract: The study involves a statistical analysis of the case management system (CMS) database of the Commission for Conciliation Mediation and Arbitration (CCMA) for the financial years 2001/2, 2003/4 and 2004/5. It focuses on statistical indicators that shed light on the administrative efficiency of the CCMA and the outcome of proceedings at the CCMA as a basis for assessing its regulatory efficiency in respect of resolving unfair dismissals and unfair labour practices. The study concludes that there are marked differences in patterns of dispute resolution and the outcome of disputes in the CCMA’s different provincial regions. These regional variations are significantly greater than those between different economic sectors. A closer scrutiny of these differences contributed to an improved understanding of the successes and failures of the CCMA. The CMS database on which the study is based is designed for case management purposes and this orientation is reflected in the information contained in the database. Accordingly, key information required for assessing efficiency of the CCMA and to inform policy decisions is not contained in the CMS database and consideration should be given to expanding the database for these purposes. |
| Keywords: | CCMA, CMS Database, statistical indicators, regulatory efficiency |
| JEL: | A1 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:9614&r=reg |
| By: | PRIYA P. LELE (University of Cambridge); MATHIAS M. SIEMS (University of Cambridge) |
| Abstract: | In this article we build a new and meaningful shareholder protection index for five countries and code the development of the law for over three decades. This quantification of legal rules (“leximetricsâ€) provides interesting possibilities for comparing variations across time series and across legal systems. For instance, our study finds, that in all of our panel countries shareholder protection has been improving in the last three decades; that the protection of minority against majority shareholders is considerably stronger in “blockholder countries†as compared to the non-blockholder countries and that convergence in shareholder protection is taking place since 1993 and is increasing since 2001. Finally, our examination of the legal differences between the five countries does not confirm the distinction between common law and civil law countries |
| Keywords: | Shareholder protection, leximetrics, numerical comparative law, law and |
| JEL: | G00 G30 G38 |
| Date: | 2007–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:mmf:mmfc06:170&r=reg |
| By: | Schmukler, Sergio L.; Gozzi, Juan Carlos; de la Torre, Augusto |
| Abstract: | Over the past decades, many countries have implemented significant reforms to foster domestic capital market development. These reforms included stock market liberalization, privatization programs, and the establishment of regulatory and supervisory frameworks. Despite the intense reform efforts, the performance of capital markets in several countries has been disappointing. To study whether reforms have had the intended effects on capital markets, the authors analyze the impact of six capital market reforms on domestic stock market development and internationalization using event studies. They find that reforms tend to be followed by significant increases in domestic market capitalization, trading, and capital raising. Reforms are also followed by an increase in the share of activity in international equity markets, with potential negative spillover effects on domestic markets. |
| Keywords: | Markets and Market Access,Economic Theory & Research,Access to Markets,Privatization,Corporate Law |
| Date: | 2007–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4184&r=reg |
| By: | David Seidl |
| Abstract: | Although codes of corporate governance have come to be widely used as a mode of regulating corporations, our understanding of how they function is still rather limited. In this paper we describe the design of such code regimes and propose a theoretical framework for studying their effects. On the basis of an observation-theoretical approach, codes are conceptualized as schemas of observation that determine the way we evaluate corporations. On the one hand, the effect of a code depends on the extent to which it becomes integrated into recursive cycles of mutual observation between the corporation and the various actors in the field. On the other hand, it also depends on how the code relates to other observational schemas in the field. The paper concludes with some guidelines for empirical research on code regimes. |
| Keywords: | Codes, Corporate Governance, Ecology, Field, Observation, Rules |
| JEL: | G34 K22 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp338&r=reg |