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on Regulation |
| By: | He, Haoran (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | To reduce plastic bag litter, China introduced a nationwide regulation requiring all retailers to charge for plastic shopping bags on June 1, 2008. By using the policy implementation as a natural experiment and collecting individual-level data before and after the implementation, we investigate the impacts of the regulation on consumers’ bag use. We find that the regulation implementation caused a 49% reduction in the use of new bags. Besides regulation enforcement, consumers’ attitude toward the regulation and some consumers’ socioeconomic characteristics also affected bag consumption. However, the regulation effects differ largely among consumer groups and among regions and shopping occasions.<p> |
| Keywords: | China; litter; market-based policy; natural experiment; plastic bag |
| JEL: | Q53 Q58 |
| Date: | 2010–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0453&r=reg |
| By: | Jan Kregel |
| Abstract: | The extension of the subprime mortgage crisis to a global financial meltdown led to calls for fundamental reregulation of the U.S. financial system. However, that reregulation has been slow in implementation and the proposals under discussion are far from fundamental. One explanation for this delay is the fact that many of the difficulties stemmed not from lack of regulation but from a failure to fully implement existing regulations. At the same time, the crisis evolved in stages, interspersed by what appeared to be the system's return to normalcy. This evolution can be defined in terms of three stages (regulation and supervision, securitization, and a run on investment banks), each stage associated with a particular failure of regulatory supervision. It thus became possible to argue at each stage that all that was necessary was the appropriate application of existing regulations, and that nothing more needed to be done. This scenario progressed until the collapse of Lehman Brothers brought about a full-scale recession and attention turned to support of the real economy and employment, leaving the need for fundamental financial regulation in the background. |
| Keywords: | Financial Regulation; Financial Crisis; Subprime Crisis; Mortgage Affiliate Regulation |
| JEL: | G21 G24 G28 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_585&r=reg |
| By: | Jan Kregel |
| Abstract: | The current financial crisis has been characterized as a "Minsky" moment, and as such provides the conditions required for a reregulation of the financial system similar to that of the New Deal banking reforms of the 1930s. However, Minsky's theory was not one that dealt in moments but rather in systemic, structural changes in the operations of financial institutions. Therefore, the framework for reregulation must start with an understanding of the longer-term systemic changes that took place between the New Deal reforms and their formal repeal under the 1999 Financial Services Modernization Act. This paper attempts to identify some of those changes and their sources. In particular, it notes that the New Deal reforms were eroded by an internal process in which commercial banks that were given a monopoly position in deposit taking sought to remove those protections because unregulated banks were able to provide substitute instruments that were more efficient and unregulated but unavailable to regulated banks, since they involved securities market activities that would eventually be recognized as securitization. Regulators and the courts contributed to this process by progressively ruling that these activities were related to the regulated activities of the commercial banks, allowing them to reclaim securities market activities that had been precluded in the New Deal legislation. The 1999 Act simply made official the de facto repeal of the 1930s protections. Any attempt to provide reregulation of the system will thus require safeguards to ensure that this internal process of deregulation is not repeated. |
| Keywords: | Financial Regulation; Financial Crisis; Subprime Crisis; Mortgage Affiliate Regulation; Financial Legislation; Supreme Court and Financial Deregulation |
| JEL: | G21 G24 G28 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_586&r=reg |
| By: | Tangerås, Thomas P. (Research Institute of Industrial Economics (IFN)) |
| Abstract: | The capacity of the transmission network determines the extent of integration of a multinational energy market. Cross-border externalities render coordination of network maintenance and investments across countries valuable. Is it then optimal to collect powers in the hands of a single regulator? Should a common system operator manage the entire network? I show that optimal network structure depends on (i ) how the common regulator would balance the interests of the different member states; (ii ) how the gains from market integration vary across countries; (iii ) network characteristics (substitutability versus complementarity); and (iv ) the social cost of operator rent. |
| Keywords: | Multi-national Energy Market; Transmission; Supranational Regulation; System Operation; Multi-contracting |
| JEL: | D62 D82 L51 L94 |
| Date: | 2010–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0838&r=reg |
| By: | Ronald J. Shadbegian; Ann Wolverton |
| Abstract: | Economists have long been interested in explaining the spatial distribution of economic activity, focusing on what factors motivate profit-maximizing firms when they choose to open a new plant or expand an existing facility. We begin our paper with a general discussion of the theory of plant location, including the role of taxes and agglomeration economies. However, our paper focuses on the theory, evidence, and implications of the role of environmental regulations in plant location decisions. On its face, environmental regulation would not necessarily be expected to alter location decisions, since we would expect Federal regulation to affect all locations in the United States essentially equally. It turns out, however, that this is not always the case as some geographic areas are subject to greater stringency. Another source of variation is differences across states in the way they implement and enforce compliance with Federal regulation. In light of these spatial differences in the costs of complying with environmental regulations, we discuss three main questions in this survey: Do environmental regulations affect the location decisions of polluting plants? Do states compete for polluting plants through differences in environmental regulation? And, do firms locate polluting plants disproportionately near poor and minority neighborhoods? |
| Keywords: | plant location decisions, environmental policy, inter-jurisdictional competition, environmental justice |
| JEL: | D21 H77 Q52 Q56 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201005&r=reg |
| By: | Bernard Shull |
| Abstract: | Regulatory forbearance and government financial support for the largest U.S. financial companies during the crisis of 2007–09 highlighted a "too big to fail" problem that has existed for decades. As in the past, effects on competition and moral hazard were seen as outweighed by the threat of failures that would undermine the financial system and the economy. As in the past, current legislative reforms promise to prevent a reoccurrence. This paper proceeds on the view that a better understanding of why too-big-to-fail policies have persisted will provide a stronger basis for developing effective reforms. After a review of experience in the United States over the last 40 years, it considers a number of possible motives. The explicit rationale of regulatory authorities has been to stem a systemic threat to the financial system and the economy resulting from interconnections and contagion, and/or to assure the continuation of financial services in particular localities or regions. It has been contended, however, that such threats have been exaggerated, and that forbearance and bailouts have been motivated by the "career interests" of regulators. Finally, it has been suggested that existing large financial firms are preserved because they serve a public interest independent of the systemic threat of failure they pose—they constitute a "national resource." Each of these motives indicates a different type of reform necessary to contain too-big-to-fail policies. They are not, however, mutually exclusive, and may all be operative simultaneously. Concerns about the stability of the financial system dominate current legislative proposals; these would strengthen supervision and regulation. Other kinds of reform, including limits on regulatory discretion, would be needed to contain "career interest" motivations. If, however, existing financial companies are viewed as serving a unique public purpose, then improved supervision and regulation would not effectively preclude bailouts should a large financial company be on the brink of failure. Nor would limits on discretion be binding. To address this motivation, a structural solution is necessary. Breakups through divestiture, perhaps encompassing specific lines of activity, would distribute the "public interest" among a larger group of companies than the handful that currently hold a disproportionate and growing concentration of financial resources. The result would be that no one company, or even a few, would appear to be irreplaceable. Neither economies of scale nor scope appear to offset the advantages of size reduction for the largest financial companies. At a minimum, bank merger policy that has, over the last several decades, facilitated their growth should be reformed so as to contain their continued absolute and relative growth. An appendix to the paper provides a review of bank merger policy and proposals for revision." |
| Keywords: | Too Big to Fail; Banking Policy; Antitrust; Government Policy; Regulation |
| JEL: | G21 G28 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_601&r=reg |
| By: | Zimmermann, Jochen; Kilian, Jan-Philipp; Schymczyk, Johannes |
| Abstract: | This paper inquires into recent changes of accounting regulation in six OECD countries: Germany, France, England, USA, Canada and Japan. Having formerly been embedded into different institutional environments, accounting systems varied widely in the heyday of the interventionist nation state. Since then, international harmonisation has been transforming national accounting systems, leading to increasing convergence between the various systems. It is the aim of this paper to describe these changes systematically, estimate the degree of international convergence and assess how different institutional origins affect convergence patterns. We develop a framework for comparing accounting systems and identify four criteria that describe the anatomy of a national accounting system: (1) Predominant uses of accounting, (2) Extent of professional self-regulation, (3) Legal backing and (4) Degree of internationalisation. Our findings indicate that global convergence in accounting regulation exists, although limited variations between nation states still remain and depend upon the prevailing national institutional arrangements, which have not (yet) converged. -- Gegenstand des vorliegenden Arbeitspapieres ist die Aufarbeitung des Wandels der Regulierung von Rechnungslegung vom goldenen Zeitalter des Nationalstaats bis heute. Dies erfolgt für die sechs größten OECD Staaten, Deutschland, Frankreich, das Vereinigte Königreich als EU-Fälle und die Vereinigten Staaten, Kanada und Japan als Fälle außerhalb der EU. Traditionell unterscheiden sich die Rechnungslegungssysteme in diesen Ländern aufgrund ihrer Einbindung in institutionelle Rahmenbedingungen wie etwa dem Finanz- oder Rechtssystem. Ziel des Arbeitspapieres ist es zu untersuchen, in welchem Umfang es durch die internationalen Harmonisierungsbemühungen zu einer Konvergenz der Rechnungslegung gekommen ist und wie der Anpassungsprozess durch die unterschiedlichen institutionellen Arrangements beeinflusst wurde. Die Darstellung der Entwicklungen erfolgt anhand von vier Kategorien: (1) dem vorherrschenden Rechnungszweck, (2) dem Ausmaß an (staatsfreier) Selbstregulierung, (3) der rechtlichen Absicherung und (4) dem Grad an Internationalisierung der Rechnungslegung. Unsere Ergebnisse deuten auf eine Konvergenz in weiten Teilen der Regulierung von Rechnungslegung hin. Diese werden jedoch vom Fortbestehen nationaler Präferenzen insbesondere im Bereich der Anspruchsbemessung begleitet. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:sfb597:119&r=reg |
| By: | Pistor, Katharina |
| Abstract: | Twenty years after the fall of the iron curtain-which for decades had separated East from West-most countries of Central and Eastern Europe are now members of the European Union; some have even adopted the euro. Nonetheless, these countries have also |
| Keywords: | financial regulation, global finance, home-host country regulation |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-65&r=reg |
| By: | Ronald J. Shadbegian; Wayne B. Gray |
| Abstract: | We examine the determinants of environmental regulatory activity (inspections and enforcement actions) for 1616 U.S. manufacturing plants in four large U.S. cities – Los Angeles, Boston, Columbus, and Houston – using data for 2000-2002. The main focus of our study is to examine whether or not regulators treat different segments of the population differently, by directing more regulatory activity at plants in rich, white neighborhoods and less in poor, minority neighborhoods, controlling for characteristics of the plant (size, age, and industry), and the plant’s past environmental performance. To date, tests of “Environmental Justice” hypotheses tend to focus on whether or not polluters are disproportionately likely to locate in neighborhoods with relatively high poor/minority populations, or on whether polluters located in those neighborhoods emit disproportionately high levels of pollution. Focusing instead on the allocation of enforcement activity across neighborhoods within each city allows us to shed light on a key mechanism through which discrepancies in pollution exposure across neighborhoods could arise and persist. Our results show relatively little statistically significant evidence that regulatory activity is less intense near disadvantaged demographic groups. We do find some suggestive coefficients - plants located in minority neighborhoods face less regulatory activity - but this effect is generally insignificant, and plants located in poor neighborhoods face (insignificantly) more regulatory activity. In contrast, we do find significant effects for plant characteristics and political variables, with plants that are larger and more energy-intensive, owned by single-plant firms, and located near politically active and liberal populations, facing more regulatory activity. |
| Keywords: | environmental justice, regulatory activity, enforcement, political, poor, minority |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp200902&r=reg |
| By: | Lisa Bruttel; Tim Friehe |
| Abstract: | This paper presents experimental evidence on the way in which the design of law enforcement impacts legal compliance. The experiment includes two law enforcement designs: one in which sanctioning results in victim-compensation and one in which sanctions are rent-seeking devices for the enforcer. We show that in the rent-seeking design (i) potential violators choose non-compliance more often and (ii) the average violator tries to avoid detection less aggressively. |
| Keywords: | norm compliance, law enforcement, avoidance, experiment |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0050&r=reg |
| By: | Xiong, Bo; Beghin, John C. |
| Abstract: | We provide an ex-post econometric examination of the harmonization and tightening of the EU Maximum Residues Limit (MRL) on aflatoxins in 2002 and its impact on African exports of groundnut products. We show that the MRL set by the EU has no significant trade impact on groundnut exports from Africa across various methods of estimation. African domestic supply plays an important role in the determination of the volumes of trade and the propensity to trade. Our findings suggest that the trade potential of African groundnut exporters is more constrained by domestic supply issues rather than by limited market access. |
| Keywords: | food safety; market access; standards; aflatoxin; MRL; groundnut; Africa; EU |
| JEL: | F13 Q17 |
| Date: | 2010–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:31595&r=reg |
| By: | Tepe, Markus; Gottschall, Karin; Kittel, Bernhard |
| Abstract: | This article examines the relationship between public administration regulation and market economy models in 20 OECD countries. Building on Pollitt and Bouckaert's (2004) administrative dimension, we employ explorative statistical analysis to identify three distinct public administration regimes: an Anglo-American, a French/German and a Scandinavian regime. The regime structure, especially with regard to public employment regulation, shows a high degree of institutional coherence with the co-ordination rules applying to the market economy. Probing deeper, we construct an index of politico-administrative regulation, which is compared to Hall and Gingerich's (2009) index of market coordination. The empirical evidence leads us to presume that public administration reforms are likely to focus on the existing market economy model when introducing private sector instruments to public administrations. -- Das vorliegende Arbeitspapier untersucht den Zusammenhang zwischen der Regulierung der öffentlichen Verwaltung und der Regulierung von Marktwirtschaftsmodellen in 20 OECD-Ländern. Auf Basis der von Pollitt und Bouckaert (2004) entwickelten Dimensionen öffentlicher Verwaltungstypen wurden ländervergleichende Indikatoren zur Messung des Verwaltungstyps zusammengestellt und Hall und Gingerich's (2009) Klassifikation von Marktwirtschafmodellen gegenübergestellt. Im Rahmen der explorativen statistischen Analyse werden drei Verwaltungsregime identifiziert: ein anglo-amerikanisches, ein deutsch/französisches und ein skandinavisches. Die Regimestruktur weist, insbesondere mit Blick auf die Regulierung öffentlicher Beschäftigungsverhältnisse, ein hohes Maß an institutioneller Kongruenz mit dem bestehenden Marktwirtschaftmodell auf. Die Befunde legen die Vermutung nahe, dass mit dem zugrundeliegenden Marktwirtschaftsmodel auch die Auswahl verwaltungspolitischer Reforminstrumente beeinflusst werden könnte. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:sfb597:120&r=reg |
| By: | Vassilis Monastiriotis; Sotirios Zartaloudis |
| Abstract: | There is a widespread perception among the public and policy-makers that EMU carries one-way pressures for enhanced flexibility in the labour market. We discuss the theoretical basis of this by examining four mechanisms through which the establishment of the common currency and the functioning of EMU can impact on the labour markets, both within the Eurozone and of the New Member States. We argue that the theory and empirics of the link between EMU and labour market flexibility are not conclusive, leaving room for varying degrees of, and directions for, the (de)regulation of national labour markets. This discretion is partly reflected in the experience of labour market reforms in the Eurozone. An examination of the institutional framework for employment policies in the EU further corroborates the conclusion that EMU does not restrict, but rather puts on the agenda, the active exploration of policy options aimed at strengthening the resilience and adaptability of the European economy as well as its quality, fairness and competitiveness. We argue that this is no different today, during or after the crisis, than it was ‘before it all started’. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:23&r=reg |
| By: | Genschel, Philipp; Jachtenfuchs, Markus |
| Abstract: | The paper analyzes the common assumption that the EU has little power over taxation. We find that the EU's own taxing power is indeed narrowly circumscribed: its revenues have evolved from rather supranational beginnings in the 1950s towards an increasingly intergovernmental system. Based on a comprehensive analysis of EU tax legislation and ECJ tax jurisprudence from 1958 to 2007, we show that at the same time, the EU exerts considerable regulatory control over the member states' taxing power and imposes tighter constraints on member state taxes than the US federal government imposes on state taxation. These findings contradict the standard account of the EU as a regulatory polity which specializes in apolitical issues of market creation and leaves political issues to the member states: despite strong safeguards, the EU massively regulates the highly salient issue of member state taxation. -- |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:sfb597:114&r=reg |
| By: | Evans, Keith S.; Weninger, Quinn |
| Abstract: | This paper studies equilibrium search and learning in a dynamic fishing game that is played by independent fishermen and by members of an information sharing Cooperative. Once collected, information about the location of productive fish-ing sites is an excludable public good. We show that independent fishermen do not internalize the full value of information and do not replicate first-best search patterns. An information sharing Cooperative faces a free-riding problem as eachmember prefers that another undertake costly search for information. Contracts can be written to improve upon free-riding, however they may create inefficient search relative to the first-best. The results explain why information sharing Cooperatives are rare in fisheries and provide insights for the regulation of fisheries. |
| JEL: | D8 Q2 |
| Date: | 2010–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:31606&r=reg |
| By: | Linda Fernandez; Glenn Sheriff |
| Abstract: | This paper analyzes border protection policies for managing risk of unintended imports of invasive species. Previous work typically assumes invasive species risk to be exogenous and commonly known. Here, we examine cases in which endogenous actions (exporter abatement) affect risk and allow for unobservable differences in exporter abatement cost. We show how the optimal inspection/penalty regime differs in such cases from that derived for homogeneous exporters. The information asymmetry also makes it optimal for the regulator to provide technical assistance grants even if it would be otherwise inefficient to do so. Further, we show that the fungibility of technical assistance with inputs in other sectors of the exporting economy significantly affects the qualitative nature of the optimal policy. If it has no outside value in the exporter's country, the optimal policy is characterized by a menu of contracts trading off higher tariffs with lower penalties for being caught with an invasive. If technical assistance can be used in other sectors of the exporter's economy, it introduces countervailing incentives that make it optimal for the regulator to use a uniform tariff/penalty combination for all exporters. |
| Keywords: | asymmetric information, inspection, international trade , invasive species |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201003&r=reg |
| By: | Oehr, Tim-Frederik; Zimmermann, Jochen |
| Abstract: | In recent years, accounting regulation has been internationalized with the extensive use and adoption of International Financial Reporting Standards (IFRS) by nation-states, which points at least to a formal convergence between accounting regulatory systems. However, major differences between national accounting systems persist. In this paper, it is argued that a country's accounting system is influenced by the type of the welfare-state. This allows us to see accounting in a broader social perspective. The societal attitudes influencing the accounting system are captured by using the Esping-Andersen (1990) classification of welfare states. To show that there is a connection between the typology of welfare-states and the way in which various corporate constituencies' interests are balanced, we compare Germany as an example of a conservative welfare-state and the UK as an example of a liberal welfare-state. This comparison shows that the type of welfare state exerts an influence on the system of accounting and, therefore, can be seen as an explanatory variable for persisting differences between accounting regulatory systems. -- In den letzten Jahren deuten zahlreiche Veränderungen im Bereich der nationalen Regulierung der Rechnungslegung zumindest auf eine formale Konvergenz zwischen den regulatorischen Systemen der Rechnungslegung hin. Abgeleitet werden kann dies aus der mittlerweile weitreichenden Anwendung und Einführung des internationalen Rechnungslegungsstandardwerkes IFRS durch zahlreiche Nationalstaaten. Allerdings bestehen auch weiterhin wesentliche Unterschiede zwischen nationalen Rechnungslegungssystemen fort. Mit diesem Arbeitspapier wird die Hypothese vertreten, dass das Rechungslegungssystem in einem Land und damit die Unterschiede zwischen Ländern maßgeblich durch den Typ des Wohlfahrtsstaates beeinflusst werden. Dieses erlaubt eine weitergefasste gesellschaftliche Perspektive auf den Bereich der Rechungslegungsregulierung. Die einflussnehmenden gesellschaftlichen Werte werden hierbei durch die Wohlfahrtsstaatentypologie von Esping-Andersen (1990) erfasst. In einem abschließenden Länderfallbeispiel werden Deutschland (konservativer Wohlfahrtsstaatstyp) sowie Großbritannien (liberaler Wohlfahrtsstaatstyp) miteinander verglichen. Hierbei soll gezeigt werden, dass eine Verbindung zwischen dem Typ des Wohlfahrtsstaates und der Art und Weise besteht, wie Interessen verschiedener Anspruchsgruppen des Unternehmens ausgeglichen werden. Der Vergleich zeigt, dass ein Zusammenhang zwischen dem Wohlfahrtsstaatstyp und der Rechungslegungsregulierung hergestellt werden kann. Der Wohlfahrtsstaatstyp ist dementsprechend als ein wesentlicher Erklärungsfaktor für den Fortbestand von nationalen Unterschieden in der Rechnungslegungsregulierung zu sehen. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:sfb597:121&r=reg |