The Economic Consequences of Legislative Oversight: Theory and Evidencefrom the Medical Profession

54 Pages Posted: 14 Sep 2010

See all articles by Shawn Kantor

Shawn Kantor

National Bureau of Economic Research (NBER)

Patrick Legros

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); Northeastern University, department of economics; Centre for Economic Policy Research (CEPR)

Date Written: February 1993

Abstract

This paper provides a positive analysis of how formal, periodic legislative oversight of regulatory agencies can influence market outcomes and the welfare of regulated industries. Whereas previous research has focused on the political distinction between passive and active legislative oversight, this paper shows that there exists an important economic difference between two mechanisms as well. We develop a principal-agent model that describes how a regulatory agent's incentives are influenced if its actions are publicly scrutinized. Our empirical analysis supports our claim that formal oversight leads to measurable economic effects.

Suggested Citation

Kantor, Shawn and Legros, Patrick, The Economic Consequences of Legislative Oversight: Theory and Evidencefrom the Medical Profession (February 1993). NBER Working Paper No. w4281. Available at SSRN: https://ssrn.com/abstract=1676650

Shawn Kantor (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Patrick Legros

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
+32 2 650 4219/3 (Phone)
+32 2 650 4475 (Fax)

Northeastern University, department of economics ( email )

301 Lake Hall
Boston, MA 02115
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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