Efficiency and Productivity Analysis in Regulation and Governance

Thomas Weyman-Jones ()
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Thomas Weyman-Jones: Dept of Economics, Loughborough University

Discussion Paper Series from Department of Economics, Loughborough University

Abstract: This paper surveys the application of efficiency and productivity analysis to recent regulatory experience, especially in Europe. From a review of regulatory case studies, particularly of network industries, it is clear that regulatory practice differs from theoretical precedent in choice of methodology, sample size, model specification and price or revenue control implementation. A principal-agent model of linear regulatory contracts is used to understand this discrepancy, suggesting that efficiency and productivity analysis has been used to capture economic rent rather than to provide incentives for efficiency. Predictions of the model are used to investigate other assumptions in efficiency and productivity analysis.

Keywords: regulation; data envelopment analysis; stochastic frontier analysis. (search for similar items in EconPapers)
JEL-codes: D24 L25 L51 (search for similar items in EconPapers)
Date: 2007-01, Revised 2007-01
New Economics Papers: this item is included in nep-eff, nep-net and nep-reg
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