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http://hdl.handle.net/10419/37161
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| Title: | | The Political Economy of Regulatory Risk  |
| Authors: | | Strausz, Roland |
| Issue Date: | | 2010 |
| Series/Report no.: | | Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Asymmetric Information and Risk C8-V3 |
| Abstract: | | The paper investigates political uncertainty as a source of regulatory risk. It shows that political parties have incentives to reduce regulatory risk actively: Mutually beneficial pre-electoral agreements that reduce regulatory risk always exist and fully eliminate it when political divergence is small or electoral uncertainty is appropriately skewed. These results follow from a fluctuation effect of regulatory risk that hurts both parties and an output-expansion effect that benefits at most one party. Due to commitment problems, politically independent regulatory agencies are needed to implement pre-electoral agreements. Optimal delegation may require only partial rather than full political independence. |
| Subjects: | | regulation regulatory risk political economy electoral uncertainty independent regulatory agency |
| JEL: | | D82 L51 L12 |
| Document Type: | | Conference Paper |
| Appears in Collections: | | Jahrestagung des Vereins für Socialpolitik 2010 (Kiel): Ökonomie der Familie
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