Choosing Whether to Comply with a General Duty or with a Specification Standard

Calcott Paul ()
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Calcott Paul: Victoria University of Wellington, Wellington, New Zealand

Review of Law & Economics, 2018, vol. 14, issue 2, 21

Abstract: Regulated firms sometimes have a choice about whether to discharge a general duty or to comply with specification standards. This paper formalizes rationales for giving firms such a choice, but also points out drawbacks. One rationale is that choice can make compliance less onerous and hence more attractive. A second rationale is that the more socially efficient form of compliance can vary among firms. Whether this approach actually would be conducive to social efficiency depends on a range of factors, including the proportion of firms that would otherwise comply, the inflexibility that specification standards impose on firms, and on how strictly general duties would be interpreted.

Keywords: general duties; specification standards; compliance (search for similar items in EconPapers)
JEL-codes: D62 K13 K32 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1515/rle-2016-0004

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