Funding the Budget of a Competition Authority with Fines It Imposes

17 Pages Posted: 23 Oct 2009  

Pierluigi Sabbatini

Government of the Italian Republic (Italy) - Italian Competition Authority

Date Written: October 22, 2009

Abstract

Most competition authorities in the world (in Europe, in particular) impose a suboptimal level of fines. In this paper two attempting explanations are proposed, based on accountability strategies and career concerns of governing bodies of these agencies. In order to compensate the distortion in their incentives, a proposal of funding the budget of competition authorities is advocated: these authorities could be partially financed by the fines they impose for anti-competitive behaviour. Surprisingly enough only very few antitrust authorities (Bulgaria, Portugal, Peru) are allowed to finance their own budget in this way. The implications of this proposal are addressed, paying attention also to the practical aspects of its implementation.

Keywords: Competition policy, fines, funding schemes, regulator incentives

JEL Classification: D73, K21, K42, L51, M48

Suggested Citation

Sabbatini, Pierluigi, Funding the Budget of a Competition Authority with Fines It Imposes (October 22, 2009). Available at SSRN: https://ssrn.com/abstract=1492666 or http://dx.doi.org/10.2139/ssrn.1492666

Pierluigi Sabbatini (Contact Author)

Government of the Italian Republic (Italy) - Italian Competition Authority ( email )

Piazza Verdi 6/a
00187 Roma, 00198
Italy
0039 0685821369 (Phone)
0039 0685452369 (Fax)

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