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on Regulation |
| By: | Suparna Karmakar |
| Abstract: | The paper highlights the dilemma faced by developing countries in balancing market access rights with the need to regulate service providers, in light of the ongoing negotiations under Article VI:4 of GATS that aims to discipline the regulatory freedom of WTO Members. While regulation is an essential development tool and regulatory requirements ensure that domestic consumers get qualitatively the best services, the very same tools often become insurmountable market access barriers for developing country service providers in the WTO regime of MFN. [WTO Research Series 7] |
| Keywords: | GATS and Liberalization, Domestic Regulations, Professional Services |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2903&r=reg |
| By: | Ferro, Gustavo; Castagnolo, Fermando |
| Abstract: | The insurance industry, in its different business lines, concentrates 11 percent of the World financial assets. As in all the remaining financial activities, it is object of comprehensive regulation of structure, conduct and performance (with diverse emphasis), besides social scrutiny. The objective of the present article is to discern the phenomena behind the recent financial crisis and its impact in the insurance industry, and to contribute to the debate on more/less market and/or scarce/excessive regulation. This paper yields also an empirical approach which consists in examining the character of the market discipline as a substitute or complement of the prudential regulation. The proposals in implementation in the European Union, known as Solvency II, add the regulatory pillars of capitalization, supervision and market discipline. In other places, such as New Zealand, confidence is put on the latter exclusively. The research questions which give structure to the document are: why to regulate insurance markets? How are they regulated around the world? Which were the origins of the crisis, and how did it impact on the insurance market? What is new in the regulatory debate? Did market discipline worked? Did it replace or complement prudential supervision? What did we learn? After a detailed debate on the first four questions, we analyze empirically the existence of market discipline in the insurance markets of Germany, Spain, New Zealand and the United Kingdom. We conclude on the complementary role of market discipline with respect to prudential supervision. |
| Keywords: | insurance; regulation; financial crisis |
| JEL: | L51 G22 |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25593&r=reg |
| By: | Andrews, Philip; Gorecki, Paul K. |
| Abstract: | On 21 December 2009 the Irish High Court found that a regulatory proposal, the Variation, by the four Dublin local authorities, is a breach of national competition law. The Variation allows a single operator to collect household waste, irrespective of whether the operator is selected by competitive tender or the local authority reserves the collection function to itself. The judgment has important, possibly groundbreaking, implications. Local government is held to be an undertaking and hence its decisions susceptible to review and prohibition under national competition rules. The burden of the paper is, however, that the local authorities are not undertakings for the purposes of competition law when they made the Variation. Even if the local authorities were undertakings in this regard, competitive tendering for selecting a single operator to collect household waste collection is neither an anti-competitive agreement nor an abuse of a dominant position. If, however, the High Court judgment is affirmed by the Supreme Court on appeal, then the wider implications of the judgment will need to be explored. |
| Keywords: | competition policy/regulation/geographic market definition/abuse of dominance/collective dominance/household waste collection/definition of an undertaking/anticompetitive agreement/Article 86/Competition Act 2002/Waste Management Acts,1996-2007 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp353&r=reg |
| By: | Shyamala Gopinath |
| Abstract: | It is being acknowledged that a macro prudential perspective is critical in designing and pursuing micro prudential regulation of institutions and markets. Two distinct but highly inter-related constructs have come to epitomize this post-crisis framework: macro prudential regulation and systemic risk management. Both these concepts are philosophically appealing and conceptually sound, but operationally quite challenging. Understanding the nuanced interplay between these would be crucial in designing an efficient operative framework for financial stability. [Paper presented at the ADBI-BNM Conference on “Macroeconomic and Financial Stability in Asian Emerging Marketsâ€, Kuala Lumpur]. |
| Keywords: | asian, emerging, markets, macro prudential, micro, crisis, philosophically, framework, financial stability, institutions, markets, risk management, economic, procyclical, bank, capital, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2917&r=reg |
| By: | Jan Kraemer (Karlsruhe Institute of Technology, Institute of Information Systems and Management); Lukas Wiewiorra (Karlsruhe Institute of Technology, Institute of Information Systems and Management) |
| Abstract: | We consider a two-sided market model with a monopolistic Internet Service Provider (ISP), network congestion sensitive content providers (CPs), and Internet customers in order to study the impact of Quality-of-Service (QoS) tiering on service innovation, broadband investments, and welfare in comparison to network neutrality. We find that QoS tiering is the more efficient regime in the short-run. However it does not promote entry by new, congestion sensitive CPs, because the ISP can expropriate much of the CPs' surplus. In the long-run, QoS tiering may lead to more or less broadband capacity and welfare, depending on the competition-elasticity of CPs' revenues. |
| Keywords: | Telecommunications, Net Neutrality, Quality of Service, Innovation, Investment, Regulation |
| JEL: | D42 L12 L43 L51 L52 L96 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1009&r=reg |
| By: | Henk Kox; George van Leeuwen; Henry van der Wiel |
| Abstract: | The paper empirically investigates whether a lack of competition determines the poor productivity performance of the European business services. It uses detailed panel data for 13 EU countries over the period 2000-2005. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. We find that the most efficient scale in business services is close to 20 employees. Scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms. Nonetheless, some 95% of the firms operate at a scale below the minimal optimal scale. While they are competitive in the sense that their productivities are very similar, they have strong scale diseconomies compared to the larger firms. Their scale inefficiency is persistent over time, which points to growth obstacles that hamper the achievement of scale economies. Regulation characteristics explain this inefficiency, particularly regulation-caused exit and labour reallocation costs are found to have a large negative impact on productivity performance. |
| Keywords: | productivity; frontier models; scale efficiency; market selection; regulation |
| JEL: | L1 L5 D2 L8 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:158&r=reg |
| By: | Arner, Douglas W. (University of Hong Kong); Park, Cyn-Young (Asian Development Bank) |
| Abstract: | The objective of global regulatory reform is to build a resilient global financial system that can withstand shocks and dampen, rather than amplify, their effects on the real economy. Lessons drawn from the recent crisis have led to specific reform proposals with concrete implementation plans at the international level. Yet, these proposals have raised concerns of relevance to Asia’s developing economies and hence require further attention at the regional level. We argue that global financial reform should allow for the enormous development challenges faced by developing countries—while ensuring that domestic financial regulatory systems keep abreast of global standards. This implies global reforms should be complemented and augmented by national and regional reforms, taking into account the very different characteristics of emerging economies’ financial systems from advanced economies. Key areas of development focus should be (i) balancing regulation and innovation, (ii) establishing national and cross-border crisis management and resolution mechanisms, (iii) preparing a comprehensive framework and contingency plan for financial institution failure, including consumer protection measures such as deposit insurance, (iv) supporting growth and development with particular attention to the region’s financial needs for infrastructure and for SMEs, and (v) reforming the international and regional financial architecture. |
| Keywords: | financial regulatory reform; global financial architecture; G-20; Asia; national and regional reform |
| JEL: | E61 G28 |
| Date: | 2010–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbrei:0057&r=reg |
| By: | Wayne B. Gray; Ronald J. Shadbegian; Ann Wolverton |
| Abstract: | In this paper, we examine the large and expanding area of Environmental Justice (EJ). The research in this area has developed from examining relatively simple comparisons of current demographic characteristics near environmental nuisances to performing multiple regression analysis and considering demographics at the time of siting. One area that has received considerably less attention is the identification of potential mechanisms that could be driving observed EJ correlations. We extend the current literature by examining one possible mechanism: the intensity of regulatory enforcement activity. If regulators pay less attention to the environmental performance of plants located near poor and minority areas, those plants might feel less pressure to pursue pollution abatement projects, increasing environmental hazards in those areas. We perform our analysis on a sample of manufacturing plants located near four large U.S. cities: Los Angeles, Boston, Columbus, and Houston. Our analysis of regulatory activity found little evidence that demographic variables have a significant impact on the allocation of regulatory activity. In particular, regulatory activity does not seem to be less intense in plants located near particular demographic groups. It is true that plants located in minority neighborhoods are inspected less often and face fewer enforcement actions, but these effects are nearly always small and insignificant, and plants located in lower-income areas seem to face (surprisingly) more regulatory activity. In a separate analysis, we also find very little evidence that demographic variables significantly influence pollution emissions. . In summary, the results presented here do not show much evidence to support EJ concerns about either regulatory activity or pollution emissions, at least within the set of plants, pollutants, and time periods covered in our analysis. |
| Keywords: | environmental justice, regulatory activity, enforcement, political, poor, minority |
| JEL: | D21 Q52 Q56 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201010&r=reg |
| By: | Fraas, Arthur G. (Resources for the Future); Richardson, Nathan (Resources for the Future) |
| Abstract: | The history of emissions-trading markets in the United States is marked by change. Since cap-and-trade programs were first implemented on a large scale after the 1990 Amendments to the Clean Air Act, the U.S. Environmental Protection Agency (EPA) has repeatedly revised and replaced emissions-trading markets for nitrous oxides and sulfur dioxide. In each transition, the agency has had to decide what to do with emissions allowances banked in the earlier program. These banked allowances represent early reductions in emissions, with corresponding environmental benefits, but also the expectation on the part of regulated entities that they will continue to hold value in the future. Unsettling these expectations can lead to price volatility, instability in markets, and erosion of buy-in from regulated entities and the credibility of regulators. The paper discusses EPA’s mixed record regarding these transitions and implications for the future of cap and trade as a policy tool. |
| Keywords: | cap and trade, nitrous oxides, sulfur dioxide, banking, borrowing, CAIR, NOx SIP Call, Transport Rule, Clean Air Act, EPA |
| Date: | 2010–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-42.pdf&r=reg |
| By: | Ying Yi Tsai; Li-Gang Liu |
| Abstract: | The present analysis sheds light on the setting up a regional rating agency in Asia in the wake of recent financial crisis. We investigate the policy facing a financial regulator while evaluating whether or not to admit new entrants into the credit rating market. In an incomplete contracting framework, we show that an impartial financial regulatory body (represented by a benevolent supranational organization) can facilitate credit ratings of high quality by allowing for the entry of new rating agencies on a non-single basis than it does for a mere single entry. This finding is caused by increased competition among the rating agencies, which induces higher quality of rating services even should rating agencies still exert below their maximum level of efforts. |
| Keywords: | analysis, regional, financial, framework |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2927&r=reg |
| By: | Tol, Richard S. J. |
| Abstract: | The Intergovernmental Panel on Climate Change has a monopoly on the provision of climate policy advice at the international level and a strong market position in national policy advice. This may have been the intention of the founders of the IPCC. I argue that the IPCC has a natural monopoly, as a new entrant would have to invest time and effort over a longer period to perhaps match the reputation, trust, goodwill, and network of the IPCC. The IPCC is a not-for-profit organization, and it is run by nominal volunteers; it therefore cannot engage in the price-gouging that is typical of monopolies. However, the IPCC has certainly taken up tasks outside its mandate; the IPCC has been accused of haughtiness; innovation is slow; quality may have declined; and the IPCC may have used its power to hinder competitors. There are all things that monopolies tend to do, against the public interest. The IPCC would perform better if it were regulated by an independent body which audits the IPCC procedures and assesses its performance; if outside organizations would be allowed to bid for the production of reports and the provision of services under the IPCC brand; and if policy makers would encourage potential competitors to the IPCC. |
| Keywords: | Climate change/IPCC/natural monopoly/regulation/policy advice/Climate change/Climate policy/Policy |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp350&r=reg |
| By: | Lentini, Emilio J; Ferro, Gustavo |
| Abstract: | Since the Great Depression of the 1930s, it was common knowledge in the Latin American water and sanitation sector the idea of take advantage of scale economies, typical of these natural monopolies, in a context favorable to state involvement in the activity. In parallel, the development of sanitary engineering and the necessity of improve and extend coverage due to health and merit goods considerations. Until the 1980s centralized state-owned monopolies ruled the sector in urban areas, while in rural places the role was performed by decentralized or municipal services. Between the 1930s and the 1960, important investments in sanitary infrastructure were made in the region. Since the 1970s, growing fiscal stress started to affect the expansion and the maintenance of the inherited infrastructure. In the 1980s the sectors decayed because of public spending cuts in the context of the Debt Crisis, and joint with a different vision, a consensus grown in direction to reforms of the sector (regionalization) and to private sector participation. Nowadays, centralized services are the exception and are generally found in small extension countries and or low population places. More spread is the national regulation. Federal countries as Argentina, Brazil and Mexico do not have a national regulator. Multisectoral regulators are found in a few countries, of small territory and population. |
| Keywords: | water; sanitation; Latin America |
| JEL: | L51 L95 |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25594&r=reg |
| By: | Hellerstein, Daniel; Higgins, Nathaniel |
| Abstract: | Conservation programs faced with limited budgets often use a competitive enrollment mechanism. Goals of enrollment might include minimizing program expenditures, encouraging broad participation, and inducing adoption of enhanced environmental practices. We use experimental methods to evaluate an auction mechanism that incorporates bid maximums and quality adjustments. We examine this mechanism’s performance characteristics when opportunity costs are heterogeneous across potential participants, and when costs are only approximately known by the purchaser. We find that overly stringent maximums can increase overall expenditures, and that when quality of offers is important, substantial increases in offer maximums can yield a better quality-adjusted result. |
| Keywords: | conservation auctions; Conservation Reserve Program; CRP; bid caps; experimental economics |
| JEL: | D44 C91 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25268&r=reg |
| By: | A. Banerji |
| Abstract: | This paper undertakes structural estimation of asymmetric auction models in a market for basmati, and detects the presence of a cartel consisting of a large (in market share) local miller and commission agents purchasing for large distant millers. The contracts between the distant millers and their commission agents help to explain the specific form that collusion takes. Simulations indicate that (i) the cartel gains considerably by colluding, over the competitive outcome; (ii) however, sellers (farmers) do not lose significantly under collusion when the commission agents bid; (iii) a knowledgeable auctioneer would choose much higher starting prices for auctions when commission agents bid, compared with the observed starting prices. The paper also shows that efficient collusion, the form of collusion commonly assumed in the literature, does not explain the data well. [Working Paper No. 129] |
| Keywords: | Auctions, Cartels, Agricultural Markets |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2891&r=reg |
| By: | David Byrne (University of Melbourne) |
| Abstract: | This paper studies the dynamics of an industry that is subject to exclusive geographical licensing. I develop a model of license ownership that predicts the evolution of profit-maximizing entry and acquisition decisions by firms over time, starting from an initial allocation of licenses. The entry and acquisition process is modeled as a one-sided coalition-formation game as in Farrell and Scotchmer (1988), where acquisition payoffs depend on economies of scale and agglomeration (economies of density). I estimate the model for the cable television industry in Canada using a panel that I have constructed from 1990 to 1996. The dataset builds up from the national regulator’s license ownership decision files, and contains license-level information on acquisition decisions, subscribership, and subscription profits. The model is estimated in two steps. I first estimate firms’ license-level profit functions, and then estimate the parameters of the fixed, merger and entry cost functions by Simulated Maximum Likelihood. Through counterfactual simulations, I use the estimated model to quantify the extent to which economies of scale and density drive acquisition behaviour, and to evaluate how merger activity reacts to a partial deregulation that occurs in 1994. Counterfactual experiments are also used to evaluate policies that stimulate entry or reduce acquisitions in the early years of the sample. The main finding is that these policies can lead to more productive dominant firms in the long-run as the industry consolidates. |
| Keywords: | Acquisition, Entry, Coalition Formation, Economies of Density, Economies of Scale, Simulated Maximum Likelihood, Cable Television |
| JEL: | L12 L22 L96 G34 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1242&r=reg |
| By: | Donze, Jocelyn; Dubec, Isabelle |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ner:toulou:http://neeo.univ-tlse1.fr/2721/&r=reg |