EconPapers    
Economics at your fingertips  
 

Compliance and competition with heterogeneous service providers: the federal Lifeline program

Thomas S. Conkling ()
Additional contact information
Thomas S. Conkling: Consumer Financial Protection Bureau

Journal of Regulatory Economics, 2020, vol. 57, issue 1, No 4, 74-104

Abstract: Abstract This paper studies how compliance behavior varies across competing service providers in the Lifeline phone subsidy program and assesses whether enlarging the set of providers improves program outcomes. In markets where firms compete to provide government benefits or services directly to individuals, the most productive firms—in terms of service quality or operating costs—survive and serve the market. However, imperfect enforcement of program rules may weaken competitive pressures through non-compliance, allowing less productive firms to maintain market share. I exploit institutional features of the Lifeline program, state-level variation in regulatory environments and a one-time reform, to empirically document the importance of provider heterogeneity following a 2008 expansion of Lifeline. The presence of low-compliance providers in particular markets drives the largest state-level differences in wasteful or inefficient program spending. Qualitatively, these providers appear to select into state markets with looser enforcement of program rules. In counterfactual simulations, excluding low-compliance providers prevents 500,000 ineligible enrollments, while only reducing eligible enrollments by 100,000. Further restrictions come at a higher cost, reflecting the trade-off of compliance and competition.

Keywords: Compliance; Competition; Enforcement; Firm heterogeneity; Lifeline; Universal service (search for similar items in EconPapers)
JEL-codes: H42 L11 L33 L51 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s11149-020-09400-5 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:regeco:v:57:y:2020:i:1:d:10.1007_s11149-020-09400-5

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11149/PS2

DOI: 10.1007/s11149-020-09400-5

Access Statistics for this article

Journal of Regulatory Economics is currently edited by Menaham Spiegel

More articles in Journal of Regulatory Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2022-05-12
Handle: RePEc:kap:regeco:v:57:y:2020:i:1:d:10.1007_s11149-020-09400-5