publication . Preprint . Other literature type . Research . Article . 2015

Politically Induced Regulatory Risk and Independent Regulatory Agencies

Roland Strausz;
Open Access
  • Published: 01 Sep 2015
  • Country: Germany
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...
Subjects
free text keywords: electoral uncertainty; independent regulatory agency; regulation; regulatory risk, regulation;independent regulatory agency;regulatory risk;electoral uncertainty, 330, D82, regulation, independent regulatory agency, regulatory risk, electoral uncertainty, Collaborative Research Center Transregio "Rationality and Competition", jel:D82, ddc:330, Public economics, Business, Negotiation, media_common.quotation_subject, media_common, Incentive, Politics, Risk regulation
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