The past thirty years have witnessed a transformation of government economic intervention in broad segments of industry throughout the world. Many industries historically subject to economic price and entry controls have been largely deregulated, including natural gas, trucking, airlines, and commercial banking. However, recent concerns about market power in restructured electricity markets, airline industry instability amid chronic financial stress, and the challenges created by the repeal of the Glass-Steagall Act, which allowed commercial banks to participate in investment banking, have led to calls for renewed market intervention. Economic Regulation and Its Reform collects research by a group of distinguished scholars who explore these and other issues surrounding government economic intervention. Determining the consequences of such intervention requires a careful assessment of the costs and benefits of imperfect regulation. Moreover, government interventions may take a variety of forms, from relatively nonintrusive performance-based regulations to more aggressive antitrust and competition policies and barriers to entry. This volume introduces the key issues surrounding economic regulation, provides an assessment of the economic effects of regulatory reforms over the past three decades, and examines how these insights bear on some of today’s most significant concerns in regulatory policy.

This book arrives at a time when further changes in the regulatory arena are being considered in response to the ongoing evolution of the Canadian natural gas industry. Greater efficiency in all aspects of gas supply, transmission and distribution is critical, and this has generally sharpened the focus of regulation on efficiency issues. This study sets out regulatory fundamentals and traditional regimes, and examines some of the main alternatives concerning the regulation of major gas pipelines in Canada. It draws on regulatory changes and experiments with respect to other sectors, such as telecommunications and electricity, as well as the pipeline sector in other jurisdictions. The study should be of great interest to regulated companies in gas transmission and distribution, oil pipelines, oil and gas producers, regulators, governments, and academics. Because of its generic nature, it should also be of interest to individuals involved in the regulation of other utilities.The Van Horne Institute for International Transportation and Regulatory Affairs is a not-for-profit organisation, established in 1992, headquartered in Calgary, Alberta, and affiliated with The University of Calgary. The Institute has been established to address important transportation and related regulatory issues such as legislation, taxes, subsidies, technology and economics, and is funded through memberships and fees for services.

The class is theory of price regulation assumed that the regulator knows the fIrm's costs, the key piece of information that enables regulators to pressure fmns to choose appropriate behaviors. The "regulatory problem" was reduced to a mere pricing problem: the regulator's goal was to align price with marginal cost, subject to the constraint that revenues must cover costs. Elegant and important insights ensued. The most important was that regulation was inevitably a struggle to achieve second-best outcomes. (Ramsey pricing was a splendid example. ) Reality proved harsh to regulatory theory. The fmn's costs are by no means known to the regulator. At best, the regulator may know how much is currently spent to provide services, but hardly what costs would be if the fmn vigorously pursued effIciency. Even if the current cost curve were known to the regulator, technologies change so swiftly that today's costs are a very poor indicator of tomorrow's, and those are the costs that will determine the fIrm's future decisions. With the burgeoning attention to information considerations and game theory in economics, the regulator's problem of eliciting host information about cost has received considerable attention. In most cases, however, it has been in context that are both static and stylized; such analyses rarely capture many of the essential elements of real world regulatory issues. This volume represents a fresh approach. It reflects Glenn Blackmon's twin strengths, a keen analytic mind and important experience in the regulatory arena.

Institutions and Incentives in Regulatory Science explores fundamental problems with regulatory science in the environmental and natural resource law field. Each chapter covers a variety of natural resource and regulatory areas, ranging from climate change to endangered species protection and traditional health-based environmental regulation. Regulatory laws and institutions themselves strongly influence the direction of scientific research by creating a system of rewards and penalties for science. As a consequence, regulatory laws or institutions that are designed naively end up incentivizing scientists to generate and then publish only those results that further the substantive regulatory goals preferred by the scientists. By relying so heavily on science to dictate policy, regulatory laws and institutions encourage scientists to use their assessment of the state of the science to further their own preferred scientific and regulatory policy agendas. Additionally, many environmental and natural resource regulatory agencies have been instructed by legislatures to rely heavily upon science in their rulemaking. In areas of rapidly evolving science, regulatory agencies are inevitably looking for scientific consensus prematurely, before the scientific process has worked through competing hypotheses and evidence. The contributors in this volume address how institutions for regulatory science should be designed in light of the inevitable misfit between the political or legal demand for regulatory action and the actual state of evolving scientific knowledge.

Risk and Return for Regulated Industries provides a much-needed, comprehensive review of how cost of capital risk arises and can be measured, how the special risks regulated industries face affect fair return, and the challenges that regulated industries are likely to face in the future. Rather than following the trend of broad industry introductions or textbook style reviews of utility finance, it covers the topics of most interest to regulators, regulated companies, regulatory lawyers, and rate-of-return analysts in all countries. Accordingly, the book also includes case studies about various countries and discussions of the lessons international regulatory procedures can offer. - Presents a unified treatment of the regulatory principles and practices used to assess the required return on capital - Addresses current practices before exploring the ways methods play out in practice, including irregularities, shortcomings, and concerns for the future - Focuses on developed economies instead of providing a comprehensive global reviews - Foreword by Stewart C. Myers

"Both regulation and public disclosure belong in the environmental regulators' arsenal. Strong, clear standards combined with a significant, credible penalty system send the right signals to the regulated community, which responds by lowering pollution emissions. The public disclosure of environmental performance also provides strong additional incentives to pollution control"--Cover.

Not since the 1960s have U.S. politicians, Republican or Democrat, campaigned on platforms defending big government, much less the use of regulation to help solve social ills. And since the late 1970s, "deregulation" has become perhaps the most ubiquitous political catchword of all. This book takes on the critics of government regulation. Providing the first major alternative to conventional arguments grounded in public choice theory, it demonstrates that regulatory government can, and on important occasions does, advance general interests. Unlike previous accounts, Regulation and Public Interests takes agencies' decision-making rules rather than legislative incentives as a central determinant of regulatory outcomes. Drawing from both political science and law, Steven Croley argues that such rules, together with agencies' larger decision-making environments, enhance agency autonomy. Agency personnel inclined to undertake regulatory initiatives that generate large but diffuse benefits (while imposing smaller but more concentrated costs) can use decision-making rules to develop socially beneficial regulations even over the objections of Congress and influential interest groups. This book thus provides a qualified defense of regulatory government. Its illustrative case studies include the development of tobacco rulemaking by the Food and Drug Administration, ozone and particulate matter rules by the Environmental Protection Agency, the Forest Service's "roadless" policy for national forests, and regulatory initiatives by the Securities and Exchange Commission and the Federal Trade Commission.

Tackles the important issue of how to regulate firms with market power.

Bartik provides a clear and concise overview of how state and local governments employ economic development incentives in order to lure companies to set up shop—and provide new jobs—in needy local labor markets. He shows that many such incentive offers are wasteful and he provides guidance, based on decades of research, on how to improve these programs.