Politics, Transaction Costs, And the Design of Regulatory Institutions

By Martimort, David

Book Id: WPLBN0000025814
Format Type: PDF eBook
File Size: 0.2 MB
Reproduction Date: 2005

Title:	Politics, Transaction Costs, And the Design of Regulatory Institutions
Author:	Martimort, David
Volume:
Language:	English
Subject:	Economics, Finance & business, World Bank.
Collections:	Economics Publications Collection
Historic Publication Date:
Publisher:	The World Bank


Citation APA MLA Chicago Martimort, D. (n.d.). Politics, Transaction Costs, And the Design of Regulatory Institutions. Retrieved from http://www.gutenberg.cc/

Description
Economics

Excerpt
With the wave of infrastructure privatization that has spread throughout the world, many countries are working on the creation of new regulatory institutions to monitor the behavior and performance of their newly privatized infrastructure monopolies. Little conceptual work has been done on the optimal design of these new institutions. To try to improve our understanding of what this design should take into account, it seems reasonable to try to review the work on organizational design that grew from developments in principle-agent theory in the 1980?s and draw some policy lessons. In this literature, regulation is generally viewed as a game between various players with different degrees of knowledge and information required to make the choices that lead to the efficient and fair allocation of resources. The understanding of the incentive problems underlying these games provides some useful lessons on the optimal design of the regulatory regime. But this is not enough. We also need to improve our understanding of the internal organization of the government to assess the importance of the institutions responsible for the implementation of these regimes.