Accountability in Government and Regulatory Policies: Theory and Evidence
IEFE Working Paper No. 24
50 Pages Posted: 15 Oct 2009
There are 4 versions of this paper
Accountability in Government and Regulatory Policies: Theory and Evidence
Accountability in Government and Regulatory Policies: Theory and Evidence
Accountability in Government and Regulatory Policies: Theory and Evidence
Accountability in Government and Regulatory Policies: Theory and Evidence
Date Written: September 30, 2009
Abstract
A key aspect of institutional design is the degree of accountability to which the officials involved in regulation are subjected. Elected officials strive for re-election, appointed ones are career-concerned. Provided that the effort exerted to uncover the firm's unknown cost is sufficiently efficient in swaying votes, elected officials produce more information than appointed ones do. As a result, both prices and ex post rents are higher under appointment, and society will prefer this last institution whenever investment inducement is sufficiently relevant or shareholders are sufficiently more powerful than consumers. Data on electricity prices and costs, and the methods of selecting top-level regulators and High court judges for a panel of forty-nine U.S. states confirm the model's predictions.
Keywords: Election, Regulation, Judges, Electricity
JEL Classification: H11, L51, K4, Q4
Suggested Citation: Suggested Citation
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