Transition Policy: A Conceptual Framework

Louis Kaplow ()

No 9596, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Legal change, whether through legislation, regulation, or court decision, is a common phenomenon, and virtually all reform creates both gains and losses for those who under the prior regime took actions that would have lasting effects. This article offers a conceptual framework for assessing the desirability of different transition policies, ranging from compensation of losses and taxation of gains, grandfathering of pre-enactment investments, and delayed or partial implementation to complete and immediate implementation or even retroactive application. Emphasis is placed on how transitions and various mitigation strategies affect the incentives of and risk borne by private actors as well as on the behavior of government and how it may be affected by transition policy.

JEL-codes: H20 K11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
Date: 2003-04
Note: LE PE
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