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Efficiency vs. distributional concerns in regulatory sandboxes*

Claude Crampes and Antonio Estache

Journal of Economic Policy Reform, 2025, vol. 28, issue 2, 184-209

Abstract: The paper makes the case for a systematic ex-ante assessment of the distributional impact of efficiency enhancing innovations regulatory sandboxes are expected to test. It shows how their prior formal modeling can inform on the possible need to control in the sandbox design for otherwise underestimated but predictable distributional effects. Failing to do so is likely to lead to underestimate efficiency-equity trade-offs and other distributional issues. This may influence the political sustainability of otherwise potentially welfare enhancing innovations. Simple industrial organization models will often suffice to identify the potential issues at the design stage.

Date: 2025
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DOI: 10.1080/17487870.2025.2463660

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