We investigate the effect of standard setters in standard setting: We examine how certain professional and political characteristics of FASB members and SEC commissioners predict the accounting “reliability” and “relevance” of proposed standards. Notably, we find FASB members with...

Many regulators have concluded that cost-benefit analysis is the best available method for capturing the welfare effects of regulations. It is therefore understandable that in recent years, some people have been interested in requiring financial regulators to engage in careful cost-benefit...

We analyze the determinants of environmental policy when two firms engage in two types of lobbying against a restriction on allowed pollution: General lobbying increases the total amount of allowed pollution, which is beneficial for both firms. Private lobbying increases the individual pollution...

We consider how a benevolent regulator should regulate a polluting export industry when the industry, having private information about its abatement efficiency, has an option to move its operations abroad, with a type-dependent outside option rent. The paper focuses on the case where outside...

We analyze the determinants of environmental policy when two firms engage in two types of lobbying against a restriction on allowed pollution: General lobbying increases the total amount of allowed pollution, which is beneficial for both firms. Private lobbying increases the individual pollution...

To a very large extent, politics is agency. Indeed, agent-principal relationships pervade public and public-private behavior. This paper reviews the extensive but not yet integrated literature applying agency concepts to political settings. This includes agency in definitions of politics or...

This paper develops a principal-agent model to explore the interaction of corruption, bribery, and political oversight of production. Under full information, an honest politician achieves the first best while a dishonest politician creates shortages and bribes. Under asymmetric information, an...

Public regulation is increasingly facing competition from "private politics" in the form of activism and corporate self-regulation. However, its effectiveness, welfare consequences, and interaction with public regulation are poorly understood. This paper presents a unified dynamic framework for...

Independent regulatory agencies face increasing pressure to conduct high-quality economicanalysis of regulations, similar to the regulatory impact analysis conducted by executive branchagencies. Such analysis could be required by evolving judicial doctrines, regulatory reformstatutes, or...

George Stigler’s “The Theory of Economic Regulation” (1971) is a landmark in the economics of regulation. It used simple public choice reasoning to set out the “capture theory” of regulation whereby “… as a rule, regulation is acquired by the industry and is designed and operated...