Economics at your fingertips  

Agency Rulemaking, Political Influences, Regulation, and Industry Compliance

Mary Olson

Journal of Law, Economics, and Organization, 1999, vol. 15, issue 3, 573-601

Abstract: This article empirically examines the impact of congressional oversight and agency rulemaking on firm compliance behavior in FDA-regulated industries. Congressional oversight hearings provide signals to firms about future changes in regulatory enforcement strategies. Agency rulemaking influences firms' incentives to comply with regulation because firms must invest significant resources to keep up with changing agency policy. This analysis uses three-stage least squares to simultaneously estimate both the numbers of FDA inspections and industry violators between 1972 and 1994. Results show that congressional oversight deters industry noncompliance. The effect of agency rulemaking on noncompliance differs between industries. For instance, an increasing stock of human drug rules has raised compliance among drug firms because newer more, cost-effective rules have replaced older, more costly rules. In contrast, the increasing stock of medical device rules has reduced industry compliance among device firms because these rules have increased the complexity and the scope of regulation. Copyright 1999 by Oxford University Press.

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Journal of Law, Economics, and Organization is currently edited by Pablo T. Spiller

More articles in Journal of Law, Economics, and Organization from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ( this e-mail address is bad, please contact ) and Christopher F. Baum ().

Page updated 2021-01-28
Handle: RePEc:oup:jleorg:v:15:y:1999:i:3:p:573-601