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on Regulation |
| By: | Ross Levine |
| Abstract: | There was a systemic failure of financial regulation: senior policymakers repeatedly enacted and implemented policies that destabilised the global financial system. They maintained these policies even as they learned of the consequences of their policies during the decade before the crisis. The crisis does not primarily reflect an absence of regulatory power, unclear lines of regulatory authority, capital account imbalances, or a lack of information by regulators. Rather, it represents the unwillingness of the policy apparatus to adapt to a dynamic, innovating financial system. A new institution is proposed to improve the design, implementation and modification of financial regulations. |
| Keywords: | financial institutions, regulation, policy, financial crisis |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:329&r=reg |
| By: | OECD |
| Abstract: | Regulatory authorities in most OECD countries have traditionally adopted a national geographic area focus when framing the geographic scope of telecommunications markets. Arguments stemming from market analysis economics suggest that differential regulation be considered between geographic areas where facility-based competition has developed and where it has not. The aim of this paper is to appraise the case for, and developments in, the use of sub-national geographically segmented regulation for fixed telecommunications networks. |
| Date: | 2010–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:173-en&r=reg |
| By: | David Styles (Environmental Protection Agency, Richview Business Park, Clonskeagh Road, Dublin 14, Ireland/School of Natural Sciences, Trinity College Dublin, Dublin 2, Ireland); Francesco Testa (Sant’Anna School of Advanced Studies, Pisa, Italy /CESISP Center for the Development of Product Sustainability, Via all'Opera Pia 15, 16145 Genova, Italy); Fabio Iraldo (IEFE – Institute for Environmental and Energy Policy and Economics, Via Roentgen 1, 20136 Milano) |
| Abstract: | Industrial production is a major source of global pollution, and it is widely recognised that regulation is required to reduce this pollution for the benefit of society. However, there is considerable debate about the most effective approach to environmental regulation with respect to both environmental and competitive performance. This paper integrates complementary empirical evidence from two entirely separate projects with different approaches (scientific and econometric), from different countries (Ireland and Italy), in order to assess the effectiveness and efficiency of direct environmental regulation in practice. Quantitative pollution avoidance and compliance cost data from Ireland’s pharmaceutical-manufacturing sector were combined with questionnaire responses from 20 Irish pharmaceutical manufacturers and 25 Italian manufacturers of chemicals for building products. We conclude that direct command-and-control regulation is a highly effective approach, and that the efficiency of such regulation is often underestimated. |
| Keywords: | environmental regulation, environmental performance, competitiveness. |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:sse:wpaper:201002&r=reg |
| By: | Alessio De Vincenzo (Banca d'Italia); Maria Alessandra Freni (Banca d'Italia); Andrea Generale (Banca d'Italia); Sergio Nicoletti Altimari (Banca d'Italia); Mario Quagliariello (Banca d'Italia) |
| Abstract: | The financial crisis that began in 2007 has revealed a need for a new supervisory and regulatory approach aimed at strengthening the system and containing the risk of future financial and economic disruptions. Three ingredients are needed to ensure financial stability: robust analysis, better regulation, and international cooperation. First, financial stability analysis must be improved to take full account of the different sources of systemic risk. Data coverage of the balance sheets of both non-bank financial institutions and the non-financial sectors should be increased. Moreover, to address the problems raised by the interconnections among financial institutions more granular and timely information on their exposures is needed. There must be further integration of macro- and micro-information and an upgrading of financial stability models. The second ingredient is the design of robust regulatory measures. Under the auspices of the G20 and the Financial Stability Board, the Basel Committee on Banking Supervision recently put forward substantial proposals on capital and liquidity. They will result in more robust capital base, lower leverage, less cyclical capital rules and better control of liquidity risk. Finally, the third ingredient is strong international cooperation. Ensuring more effective exchanges of information among supervisors in different jurisdictions and successful common actions is key in preserving financial integration, while avoiding negative cross-border spill-overs. Better resolution regimes are part of the efforts to ensure that the crisis of one institution does not impair the ability of the financial markets to provide essential services to the economy. |
| Keywords: | financial crisis, international cooperation, macroprudential analysis, procyclicality, prudential regulation, stress tests |
| JEL: | G18 G28 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_76_10&r=reg |
| By: | Sachin Chaturvedi (Research and Information System for Developing Countries) |
| Abstract: | New technology in the seed sector has brought in new actors and new requirements for regulation. It is important to discuss how far India is working on new opportunities and policy options for effective and rationale regulatory framework. Equally important is to analyze how socio-economic dimension is often overlooked while evolving regulatory frameworks both for biosafety as well as for price control of seeds. There is systemic lack of technological sensitivity in the agricultural R&D system. We fail to appreciate the kind of technological support farmers are looking for and how best a delivery system for new technologies should be put in place. In this regard, India would have to evolve a dynamic innovation and technology policy to address diverse agricultural challenges and growing environmental concerns. There is need to do is to overhaul the institutional set-up and its linkages with ground-level experiences. This includes gearing up of decision making process for newer crops; setting up of necessary infrastructure and trained manpower for any eventuality related to biohazard; and, on top of that, identifying correctly the technological expectations from agricultural R&D systems. |
| Keywords: | Seed, regulation competition policy, biosafety, India |
| JEL: | D40 Q18 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:microe:2409&r=reg |
| By: | Francesco Cannata (Banca d'Italia); Massimo Libertucci (Banca d'Italia); Francesco Piersante (Banca d'Italia); Mario Quagliariello (Banca d'Italia) |
| Abstract: | The far-reaching regulatory activity in which the financial sector has been involved in recent years has been attracting increased attention to the expected costs and benefits of such regulation; measures undertaken in response to the financial crisis have made these issues even more topical. Regulatory impact assessment (RIA) has become a widespread practice for the international institutions and for the regulators in the main developed countries. RIA has recently been adopted at the Bank of Italy, proving to be a useful tool not only to refine the rules being adopted, but also to strengthen the interaction with the public during the consultation phase. The publication of the RIA Guidelines provides a tool for codifying the process of the analysis; with the help of some exemplifications drawn from RIAs conducted so far, this document provides a key for the interpretation of the analyses and helps to clarify the underlying logical steps. |
| Keywords: | RIA, impact assessment, regulation, bank, public consultation |
| JEL: | G18 G28 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_78_10&r=reg |
| By: | Marcel Boyer; Donatella Porrini |
| Abstract: | We focus in this paper on the effects of court errors on the optimal sharing of liability between firms and financiers, as an environmental policy instrument. Using a structural model of the interactions between firms, financial institutions, governments and courts we show, through numerical simulations, the distortions in liability sharing between firms and financiers that the imperfect implementation of government policies implies. We consider in particular the role played by the efficiency of the courts in jointly avoiding Type I (finding an innocent firm guilty of inappropriate care) and Type II (finding a guilty firm not guilty of inappropriate care) errors. This role is considered in a context where liability sharing is already distorted (when compared with first best values) due not only to the courts’ own imperfect assessment of safety care levels exerted by firms but also to the presence of moral hazard and adverse selection in financial contracting. There is also not congruence of objectives between firms and financiers on the one hand and social welfare maximization on the other. Our results indicate that an increase in the efficiency of court system in avoiding errors raises safety care level, thereby reducing the probability of accident, and allowing the social welfare maximizing government to impose a lower liability [higher] share for firms [financiers] as well as a lower standard level of care. <P>Nous considérons dans le présent document les effets des erreurs judiciaires sur le partage optimal des responsabilités entre entreprises et financiers, comme un instrument de politique environnementale. En utilisant un modèle structurel des interactions entre les entreprises, les institutions financières, les gouvernements et les tribunaux, nous montrons, au moyen de simulations numériques, les distorsions dans le partage de responsabilités entre entreprises et financiers qu’implique la mise en œuvre imparfaite des politiques gouvernementales. Nous considérons en particulier le rôle joué par l'efficacité des tribunaux à éviter les erreurs de type I (condamner une entreprise innocente de manquements à la sécurité) et de type II (ne pas condamner une entreprise coupable de manquements à la sécurité). Nous considérons un contexte où le partage des responsabilités est déjà altéré (par rapport à l’optimum de premier rang), en raison non seulement des difficultés des tribunaux à observer correctement les efforts de prévention des entreprises mais aussi de la présence d'aléa moral et sélection adverse dans les contrats de financement. Il n'y a pas absence de congruence entre les objectifs des entreprises et financiers d'une part et la maximisation du bien-être social d’autre part. Nos résultats indiquent qu'une plus grande efficacité du système judiciaire à éviter les erreurs entraine une hausse des activités de prévention d’accident et donc une baisse de la probabilité d'accident, et permet de réduire (d’augmenter) la part de responsabilité des entreprises (financiers) et de réduire le niveau requis de prévention. |
| Keywords: | Environmental Policy, Court Efficiency, Liability Sharing, Regulation, Incomplete Information, Politique environnementale, efficacité des tribunaux, partage de responsabilités, informations incomplètes |
| JEL: | D82 G32 K13 K32 Q28 |
| Date: | 2010–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2010s-48&r=reg |
| By: | Hilary Sigman (Department of Economics, Rutgers University and NBER); Sarah L. Stafford (Department of Economics, College of William and Mary) |
| Abstract: | Regulation of hazardous waste and cleanup of contaminated sites are two major components of modern public policy for environmental protection. We review the literature on these related areas, with emphasis on empirical analyses. Researchers have identified many behavioral responses to regulation of hazardous waste, including changes in the location of economic activity. However, the drivers behind compliance with these costly regulations remain a puzzle, as most research suggests a limited role for conventional enforcement. Increasingly sophisticated research examines the benefits of cleanup of contaminated sites, yet controversy remains about whether the benefits of cleanup in the U.S. exceed its costs. Finally, research focusing on the imposition of legal liability for damages from hazardous waste finds advantages and disadvantages of the U.S. reliance on legal liability to pay for cleanup, as opposed to the government---financed approaches more common in Europe. |
| Date: | 2010–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:104&r=reg |
| By: | Manthos, Delis; Iftekhar , Hasan; Pantelis, Kazakis |
| Abstract: | This paper provides cross-country evidence that variations in bank regulatory policies result in differences in income distribution. In particular, market discipline (private monitoring) and activity restrictions have an unambiguously positive and significant effect on income inequality and poverty, and this effect holds regardless of the level of economic and institutional development. In contrast, more stringent bank capital regulation and enhanced official supervisory power tend to reduce income inequality. However, this latter effect fades away for countries with low levels of economic and institutional development. We contend that these findings have new implications for the effects of bank regulations besides those related to their impact on financial stability. |
| Keywords: | Bank regulations; Income inequality; Cross-country panel data |
| JEL: | O15 O16 G28 |
| Date: | 2010–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27379&r=reg |
| By: | Cuntz, A.N.; Blind, K. |
| Abstract: | We analyze the impact of (alliance) network exposure on the speed and extent of adoption of the business model as being one explanatory factor for diffusion controlling for actor specific characteristics and embeddedness in the network. In order to explain how existing national regulation moderated this relationship and whether it succeeded in its risk-limiting mission by moderating global adoption patterns and risk-bearing behavior among financial institutions we estimate various history event analysis model i.e. standard Cox and extended frailty models. We find strong support for the role of network exposure rather than social learning, the impact of regulatory effort on patterns of adoption and the role of country clusters for diffusion in the financial sector. |
| Keywords: | diffusion;networks;alliances;banking;regulation;social learning;exposure |
| Date: | 2010–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765021681&r=reg |
| By: | Hahn, Robert W.; Richards, Kenneth |
| Abstract: | In the real world, taxes and cap-and-trade systems are rarely implemented in their pure form. In this paper, we examine a related approach that has been used widely in practice – which we refer to as an “offset.” The idea behind offsets is to encourage firms or entities that may not be a part of the main regulatory system to produce environmental improvements, which can then be used to offset pollution reduction requirements in the main regulatory system. This paper provides a survey and synthesis of the literature on the use of offsets. Examples include offsets for limiting greenhouse gas emissions, maintaining ecosystem services for wetlands, achieving local air pollution goals, protecting water quality, and promoting energy efficiency. The paper reviews how offsets are used in practice and examines what is known about their environmental and economic impacts. Combining insights from the political economy of using offsets with their intrinsic design challenges raises a potentially serious problem – namely, that offsets may often fail to take adequate account of environmental or ecosystem damages. Because this problem can be significant, alternatives should be considered. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:636&r=reg |
| By: | John Vickers |
| Abstract: | The establishment of independent authorities for monetary policy and for competition policy was part of the institutional consensus of the Great Moderation. The paper contrasts how policy has operated in the two spheres, especially as regards the role of law. It then discusses the application of competition policy to banks before and during the crisis, and relationships between competition and financial stability. Finally, the paper considers whether the financial crisis - which has led, at least temporarily, to unorthodox and less independent monetary and competition policies - has undermined the long-term case for independence. The conclusion is that it has not. While regulation of the financial system clearly requires fundamental reform, sound money and markets free from threats to competition remain fundamental to long-run prosperity; those ends are best pursued by focused and independent monetary and competition policies. |
| Keywords: | central bank independence, monetary policy, competition law, merger policy, financial stability, banks |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:331&r=reg |
| By: | Charles Goodhart |
| Abstract: | Although Central Banks have pursued the same objectives throughout their existence, primarily price and financial stability, the interpretation of their role in doing so has varied. We identify three stable epochs, when such interpretations had stabilised, ie 1. The Victorian era, 1840s to 1914; 2. The decades of government control, 1930s to 1960s; 3. The triumph of the markets, 1980s to 2007. Each epoch was followed by a confused inter-regnum, searching for a new consensual blueprint. The final such epoch concluded with a crisis, when it became apparent that macro-economic stability, the Great Moderation, plus (efficient) markets could not guarantee financial stability. So the search is now on for additional macro-prudential (counter-cyclical) instruments. The use of such instruments will need to be associated with controlled variations in systemic liquidity, and in the balance sheet of the Central Bank. Such control over its own balance sheet is the core, central function of any Central Bank, even more so than its role in setting short-term interest rates, which latter could be delegated. We end by surveying how relationships between Central Banks and governments may change over the next period. |
| Keywords: | central banks, financial stability, financial regulation, bank taxes |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:326&r=reg |
| By: | Antonio Estache; Emili Grifell-Tatjé |
| Abstract: | This paper offers a quantitative evaluation of the distribution of the welfare of a water privatization experience in Mali among labor, investors,intermediate input providers, users and taxpayers. The assessment is based on an index number inspired by Bennet (1920). We find four main impacts. First, taxpayers are the main losers as subsidies are still needed. Second, users benefited through lower real water prices, although users in Bamako did better than the others and future users will be hurt by insufficient investment. Third, labor, intermediate suppliers and investors have also benefited. Fourth, efficiency-equity trade-offs are for real in the water business in Africa. Indeed, the distribution of the gains within factor categories has not been even, largely favoring foreign actors over domestic actors. This easily explains the unhappiness of the Malians. The regulatory decisions to correct it explains why the private operator lost its incentive to stay in the country. |
| Keywords: | privatzation, regulation, efficiency, equity; distributional effects |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/69297&r=reg |
| By: | Rauf Gönenç; Lukasz Rawdanowicz |
| Abstract: | In the 2000s, Turkey has enjoyed rapid catching–up. This was possible despite the adverse business environment, as the semi–formal and informal economy had a significant contribution to the expansion of the private sector. Productivity growth was strong, but labour utilisation remained very low. Looking forward, higher employment and productivity growth will not be possible without profound regulatory reforms of minimum wages, severance payments, social security contributions and flexible job contracts. These reforms have been discussed for a long time, but political obstacles prevented implementing them. Resolving this deadlock calls for advancing an integrated strategy of labour reforms and formalisation via experimenting with new regulation on the voluntary basis to identify the most successful solutions that can be later rolled out to the whole economy. Moreover, Turkey has to ease further anti–competitive product market regulations by reducing barriers to entrepreneurship and foreign direct investment, and by limiting government involvement in business. A successful implementation of these reforms would allow Turkey to enjoy golden decades. This paper relates to the 2010 OECD Economic Review of Turkey (www.oecd.org/eco/surveys/turkey).<P>Réformer les réglementations pour débloquer la croissance à long-terme de la Turquie<BR>Dans les années 2000 la Turquie a réalisé un rattrapage rapide. Cela a été possible malgré un cadre réglementaire défavorable, grâce à des activités semi-formelles et informelles qui ont considérablement contribué à l'expansion du secteur privé. La croissance de la productivité a été forte, mais l'utilisation du travail reste très faible. A l'avenir l'emploi et la productivité ne pourront pas croitre plus vite sans de profondes réformes du salaire minimum, des indemnités de licenciement, des cotisations de sécurité sociale et des contrats de travail flexibles. Ces réformes ont été discutées depuis longtemps mais des obstacles politiques ont empêché leur mise en oeuvre. Pour dépasser ce blocage, une stratégie intégrée de réformes du marché du travail et de formalisation est nécessaire, via l'expérimentation de nouvelles règlementations sur la base du volontariat, afin d'identifier de meilleures solutions qui peuvent être progressivement étendues à l'ensemble de l'économie. En outre, la Turquie devrait réduire les réglementations anti-concurrentielles dans les marchés de produits en diminuant les obstacles à l'entreprenariat et à l'investissement étranger direct, et en restreignant l?intervention du gouvernement dans les affaires. La mise en oeuvre réussie de ces réformes permettrait à la Turquie de bénéficier de brillantes décennies de croissance. Ce document se rapporte à l’Étude économique de Turquie de l’OCDE, 2010 (www.oecd.org/eco/etudes/turquie). |
| Keywords: | growth, regulation, product markets, Turkey, political economy, reforms, labour market, croissance, réglementation, marché du travail, marchés de produits, Turquie, économie politique, réformes |
| JEL: | D7 J2 J3 J4 L5 O4 P5 |
| Date: | 2010–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:821-en&r=reg |
| By: | Geuna Aldo; Rossi Federica (University of Turin) |
| Abstract: | Most European countries since the end of the 1990s have been moving away from inventor ownership of patent rights towards different systems of institutional ownership. This shift is based on the objectives of policymakers to make conditions similar to those in the US, where the 1980 Bayh–Dole Act allows universities to retain intellectual property rights (IPR) over inventions that come out of federally funded research. This article challenges the view that direct comparisons with US experience will enable us to predict the effects of the implementation of institutional IPR ownership systems in Europe. We provide an overview of the current state of regulation on academic patent ownership in selected European countries which shows that, despite the changes to institutional ownership that have been implemented, there is wide diversity in national systems and several important differences with the US framework. Our analysis of patterns of ownership of academic patents shows that there has not been a general increase in university patenting since 1990, and seeming increases may be due to more complex dynamics in academic patenting and academic patents ownership. The paper concludes with a discussion of how changes in IPR regulations and management of technology transfer by universities, and public policies supporting technology transfer are affecting academic patenting and research activities in universities |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201015&r=reg |
| By: | Petar Stankov |
| Abstract: | The paper analyzes the influence of credit-, labor-, and product market deregulation policies on economic growth in more than 70 economies over a period of 30 years. It addresses both the issues of reform measurement and its endogeneity. Specifically, by combining a difference-in-difference strategy with an IV approach to the endogeneity of the reform timing, this work finds that deregulation contributed to the per capita GDP levels of the early reformers relatively more than to the ones of the late reformers. However, the paper also finds that accelerating credit market reforms leads to a large growth acceleration effect for the late reformers, which points to large dynamic welfare gains from deregulation. The latter result suggests that a large-scale credit market re-regulation in the aftermath of the Great Recession is a misguided approach to deal with the consequences of the financial crisis. |
| Keywords: | deregulation; economic growth; origins of institutional change; |
| JEL: | N43 K20 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp424&r=reg |
| By: | Thierry Bréchet (Université catholique de Louvain); Pierre M. Picard, (University of Luxembourg) |
| Abstract: | Noise-induced pollution constitutes a hot and topical societal problem for all major airports. This paper discusses various issues in the implementation of a market for noise licenses as a solution to solve the noise externality between the residents located around airports and the aircrafts moving in and to airports. |
| Keywords: | Airport; environment; noise; licenses |
| JEL: | Q5 R4 D4 D6 D78 D82 L5 L93 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:10-13&r=reg |