nep-reg New Economics Papers
on Regulation
Issue of 2008‒02‒16
six papers chosen by
Christian Calmes
University of Quebec in Ottawa

  1. Weighing the relative importance of environmental regulation for industry location By Abay Mulatu
  2. Regulatory agencies : impact on firm performance and social welfare By Rossi, Martin A.; Estache, Antonio
  3. Informational Benefits of International Environmental Agreements By Amihai Glazer; Stef Proost
  4. Regulatory choices in global financial markets – restoring the role of aggregate utility in the shaping of market supervision By Granlund, Peik
  5. The Divergence of Legal Procedures By Aron Balas; Rafael La Porta; Florencio Lopez-de-Silanes; Andrei Shleifer
  6. The Environmental Enforcement in the Civil and the Common Law Systems. A Case on the Economic Effects of Legal Institutions By Anna Rita Germani

  1. By: Abay Mulatu
    Date: 2008
  2. By: Rossi, Martin A.; Estache, Antonio
    Abstract: The authors explore the relation between the establishment of a regulatory agency and the performance of the electricity sector. The authors exploit a unique dataset comprising firm-level information on a representative sample of 220 electric utilities from 51 development and transition countries for the years 1985 to 2005. Their results indicate that regulatory agencies are associated with more efficient firms and with higher social welfare.
    Keywords: Infrastructure Regulation,Privatization,Energy Production and Transportation,Emerging Markets,Regulatory Regimes
    Date: 2008–02–01
  3. By: Amihai Glazer (Department of Economics, University of California-Irvine); Stef Proost (Center for Economic Studies, KULeuven)
    Abstract: Given that it is difficult to monitor, and even more so to enforce, International Environmental Agreements, it is surprising that they are signed and implemented. This paper offers a theoretical model, which addresses the phenomena. The focus is on informational and coordination problems--a country which is unsure about the benefits of environmental policy may believe that the benefits are higher the greater the number of other countries which lean towards taking action. Whereas each country may individually take no environmental action, in equilibrium several countries may take environmental action if they expect others to. An International Environmental Agreement can thus be self-enforcing. Such effects can appear even if international environmental spillovers are absent, and even if monitoring and enforcement are infeasible. Our approach can explain additional phenomena: why a country that is known to care little about the environment may deeply influence other countries if it takes environmental action, why lags may appear between the signing of an agreement and its implementation, and how requirements for approval by several bodies within a country can increase support for environmental action.
    Keywords: Environmental policy; International agreements; Signaling; Regulation
    JEL: Q58 D82 L51
    Date: 2008–02
  4. By: Granlund, Peik (FSA/Bank of Finland)
    Abstract: In financial market studies, public supervision has rarely been found to have any effects on financial market development. This is true, even though the primary objective of supervisory legislation is the limitation of market failures and externalities. Studies conducted by eg the World Bank and La Porta & al imply that whereas private enforcement contributes to financial market development, there is limited evidence that public supervision does the same. The objective of the paper is to empirically investigate the relation between public supervision and financial market development. This is done by focusing on major legislative features directing the supervisor and hence affecting market participant activities. The markets investigated comprise banks, investment firms, investment fund companies and listed companies in the United States, United Kingdom, Sweden, Finland, Poland and Estonia for the years 1996 to 2005. The results suggest that certain features of public supervision correlate with financial market development. Strong legal obligations for the supervisor to develop legislation correlate significantly with higher company market values. Emphasizing economic aspects in the formulation of supervisory objectives corresponds with higher market profitability. Furthermore, severe monetary sanctions applicable to company directors correlate negatively with market growth. Unexpectedly, the same is true for a high degree of supervisory independence. The results imply links between public supervision and financial market development in a manner not always in line with previous research. Why this is the case, requires further investigation. One possible explanation may be methodological, based on the fact that in the present study legislative features are perceived in a conceptual rather than a technical manner.
    Keywords: financial institution; regulation; supervision; utility
    JEL: G28 K23 O16
    Date: 2008–01–01
  5. By: Aron Balas; Rafael La Porta; Florencio Lopez-de-Silanes; Andrei Shleifer
    Abstract: Djankov et al. (2003a) propose and measure for 109 countries in the year 2000 an index of formalism of legal procedure for two simple disputes: eviction of a non-paying tenant and collection of a bounced check. For a sub-sample of 40 countries, we compute this index every year starting in 1950, which allows us to study the evolution of legal rules. We find that between 1950 and 2000, the formalism of legal procedure did not converge, and possibly diverged, between common law and French civil law countries. At least in this specific area of law, the results are inconsistent with the hypothesis that national legal systems are converging, and support the view that legal origins exert long lasting influence on legal rules.
    JEL: K4 K41 P51
    Date: 2008–02
  6. By: Anna Rita Germani
    Abstract: This paper aims to give a comparative analysis on the different enforcement approaches in respect to both civil and common law systems (i.e. Europe vs. USA) by analyzing some crucial aspects of their underlying normative systems. Therefore, the role of the juridical institutions in these two diverse contexts is analyzed, in order to identify the economic efficiency implications based upon the theory of public enforcement of environmental laws.
    Keywords: environmental enforcement, economic analysis of law, common law, civil law.
    JEL: K0 K42
    Date: 2007–12

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