Regulatory Schemes and Political Capture in a Local Public Sector

Philippe Gagnepain and Marc Ivaldi

No 609, IDEI Working Papers from Institut d'Économie Industrielle (IDEI), Toulouse

Abstract: We consider a framework of contractual interactions between urban transport authorities and transport operators. We estimate simultaneously the choice of contract by the authorities and the effect of regulation on the cost reducing activity of the operators. We test whether regulatory schemes currently implemented in the industry are the observable items of a more general menu of second best contracts. We suggest that the generation process of the data we have in hand is better explained by the political aspects of regulation. Moreover, the cost reducing effort of the operators is greater under fixed-price regimes, compared to the cost-plus case.

Date: 2010-05
New Economics Papers: this item is included in nep-pbe, nep-pol, nep-reg and nep-ure
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Working Paper: Regulatory Schemes and Political Capture in a Local Public Sector (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ide:wpaper:22695

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