Efficient Regulation

Andrei Shleifer

No 15651, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Regulation of economic activity is ubiquitous around the world, yet standard theories predict it should be rather uncommon. I argue that the ubiquity of regulation is explained not so much by the failure of markets, or by asymmetric information, as by the failure of courts to solve contract and tort disputes cheaply, predictably, and impartially. The approach accounts for the ubiquity of regulation, for its growth over time, as well as for the fact that contracts themselves are heavily regulated. It also makes predictions, both across activities and across jurisdictions, for the efficiency of regulation and litigation as strategies of enforcing efficient conduct.

JEL-codes: K12 K13 L51 (search for similar items in EconPapers)
Date: 2010-01
Note: LE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published as Efficient Regulation , Andrei Shleifer. in Regulation vs. Litigation: Perspectives from Economics and Law , Kessler. 2011

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