The Rise of the Regulatory State

Edward Ludwig Glaeser and Andrei Shleifer

Scholarly Articles from Harvard University Department of Economics

Abstract: During the Progressive Era at the beginning of the 20 th century, the United States replaced litigation by regulation as the principal mechanism of social control of business. To explain why this happened, we present a model of choice of law enforcement strategy between litigation and regulation based on the idea that justice can be subverted with sufficient expenditure of resources. The model suggests that courts are more vulnerable to subversion than regulators, especially in an environment of significant inequality of wealth and political power. The switch to regulation can then be seen as an efficient response to the subversion of justice by robber barons during the Gilded Age. The model makes sense of the progressive reform agenda, and of the successes and failures of alternative law enforcement strategies in different countries.

Date: 2003
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Citations: View citations in EconPapers (200)

Published in Journal of Economic Literature

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Journal Article: The Rise of the Regulatory State (2003)
Working Paper: The Rise of the Regulatory State (2001)
Working Paper: The Rise of the Regulatory State (2001)
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