Thursday, June 10, 2010

Regulation Competition

Trust and technology: The social foundations of aviation regulation

John Downer
British Journal of Sociology, March 2010, Pages 83-106

Abstract: This paper looks at the dilemmas posed by 'expertise' in high-technology regulation by examining the US Federal Aviation Administration's (FAA) 'type-certification' process, through which they evaluate new designs of civil aircraft. It observes that the FAA delegates a large amount of this work to the manufacturers themselves, and discusses why they do this by invoking arguments from the sociology of science and technology. It suggests that – contrary to popular portrayal – regulators of high technologies face an inevitable epistemic barrier when making technological assessments, which forces them to delegate technical questions to people with more tacit knowledge, and hence to 'regulate' at a distance by evaluating 'trust' rather than 'technology'. It then unravels some of the implications of this and its relation to our theories of regulation and 'regulatory capture'.


Valuing Incremental Highway Capacity in a Network

Allen Klaiber & Kerry Smith
NBER Working Paper, May 2010

Abstract: The importance of increments to an existing highway system depends upon their contributions to the accessibility provided by the existing network. Nearly 40 years ago, Mohring [1965] suggested this logic for planning optimal highway investment programs. He argued it could be implemented by measuring the quasi-rents generated by specific additions to an existing roadway system. This paper uses a unique set of additions to a loop roadway in metropolitan Phoenix, together with detailed records of housing sales over the past decade, to meet this need. We find that estimated increases in capitalized housing values due to four segments added during this period range from 73 to over 273 million dollars per mile of the roadway addition.


Consumption tax competition among governments: Evidence from the United

Jan Jacobs, Jenny Ligthart & Hendrik Vrijburg
International Tax and Public Finance, June 2010, Pages 271-294

Abstract: The paper contributes to a small but growing literature that estimates tax reaction functions of governments competing with other governments. We analyze consumption tax competition between US states, employing a panel of state-level data for 1977–2003. More specifically, we study the impact of a state’s spatial characteristics (i.e., its size, geographic position, and border length) on the strategic interaction with its neighbors. For this purpose, we calculate for each state an average effective consumption tax rate, which covers both sales and excise taxes. In addition, we pay attention to dynamics by including lagged dependent variables in the tax reaction function. We find overwhelming evidence for strategic interaction among state governments, but only partial support for the effect of spatial characteristics on tax setting. Tax competition seems to have lessened in
the 1990s compared to the early 1980s.

(Nod to Kevin L)

1 comment:

David said...

The first article is essentially Shavell's rationale for using liability when firms have superior knowledge. That intuition isn't obvious, and can certainly be messy when the regulatees work to bury that type of information.