Abstract
Uncertainty in election outcomes generates politically induced regulatory risk. For monopoly regulation, political parties' risk attitudes towards such risk depend on a fluctuation effect that hurts both parties and an output--expansion effect that benefits at least one party. Irrespective of the parties' risk attitudes, political parties have incentives to negotiate away regulatory risk by pre-electoral bargaining. Pareto-efficient bargaining outcomes fully eliminate regulatory risk and are attainable through institutionalizing independent regulatory agencies with a specific objective. Key aspects of the regulatory overhaul of the US Postal system in 1970 are argued to be consistent with these results.
Dokumententyp: | Paper |
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Keywords: | regulation;independent regulatory agency;regulatory risk;electoral uncertainty |
Fakultät: | Volkswirtschaft > Collaborative Research Center Transregio "Rationality and Competition" |
Themengebiete: | 300 Sozialwissenschaften > 330 Wirtschaft |
JEL Classification: | D82 |
URN: | urn:nbn:de:bvb:19-epub-58056-7 |
Sprache: | Englisch |
Dokumenten ID: | 58056 |
Datum der Veröffentlichung auf Open Access LMU: | 27. Sep. 2018, 13:56 |
Letzte Änderungen: | 04. Nov. 2020, 13:37 |