Reregulation and the Regulatory Timeline
37 Pages Posted: 5 Apr 2014 Last revised: 17 Jun 2016
Date Written: March 16, 2016
Regulation is often casually conceived of as functioning like a binary on/off switch: as if an area, issue, or industry is either regulated or not. While this binary model of regulation can be useful, it also decontextualizes regulatory decisions from their position in time, and thus obscures important ways in which regulators are constrained and incentivized by past and future decisions. As an alternative, we present a timeline approach to regulation. The timeline approach is particularly helpful in illustrating the ways that earlier regulatory decisions create vestigial effects for later related decisions, and for highlighting the informational advantage that later regulators have over regulators earlier in the timeline. These temporally contextualized qualities are especially important under conditions of reregulation, which arise when a previously deregulated issue is regulated once again. Applying insights from financial option theory, we show how lessons from the timeline approach can be used to enhance regulatory decision-making at all stages on the timeline.
Keywords: regulation, deregulation, regulatory analysis, timeline, path dependency, intertemporal dependence, time orientation, regulation over time
JEL Classification: K40, K49, K20, K21, K23, K29, K32, K39, K00
Suggested Citation: Suggested Citation