Endogenous Price Mechanisms,Capture and Accountability Rules: Theory and Evidence

Carmine Guerriero

No 2006.106, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper analyzes the constitutional determinants of cost reimbursement rules. In order to design the optimal incentive schemes, a possibly partisan planner will take into account the market cost structure, the institutional design of the supervision hierarchical structure and its technology. I employ electricity data from the U.S. electric power market to test the model’s predictions. The evidence shows that reforms from low powered incentive scheme (COS) to high powered one (PBR) are linked to high cost industries, the presence of elected supervisors, high inter-party platform distance and large (slim) majority when the reformer is Republican (Democratic). Moreover, there is some evidence in the data that performance-based regulation lowers regulated prices.

Keywords: Industrial Policy; Political Economy; Regulation and Incentives (search for similar items in EconPapers)
JEL-codes: D72 D82 H11 L51 (search for similar items in EconPapers)
Date: 2006-08
New Economics Papers: this item is included in nep-ene and nep-reg
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://feem-media.s3.eu-central-1.amazonaws.com/w ... oads/NDL2006-106.pdf (application/pdf)

Related works:
Working Paper: Endogenous Price Mechanisms, Capture and Accountability Rules: Theory and Evidence (2006)
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:fem:femwpa:2006.106

Access Statistics for this paper

More papers in Working Papers from Fondazione Eni Enrico Mattei Contact information at EDIRC.
Bibliographic data for series maintained by Alberto Prina Cerai ( this e-mail address is bad, please contact ).