When Governments Regulate Governments

American Journal of Political Science, 2015, DOI: 10.1111/ajps.12221

37 Pages Posted: 24 Dec 2015

See all articles by David Konisky

David Konisky

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Manuel P. Teodoro

Texas A&M University

Date Written: July 1, 2015

Abstract

This article advances a political theory of regulation that accounts for the choices of regulators and regulated entities when both are governments. Leading theories of regulation assume that governments regulate profit-maximizing firms: Governments set rules, to which firms respond rationally in ways that constrain their behavior. But often the entities that governments regulate are other governments. We argue that government agencies and private firms often face different compliance costs, and that agencies have greater incentives than firms to appeal regulations through political channels. Simultaneously, the typical enforcement instruments that regulators use to influence firm behavior may be less effective against governments. Our empirical subjects are public and private entities’ compliance with the U.S. Clean Air Act and Safe Drinking Water Act. We find that, compared with private firms, governments violate these laws significantly more frequently and are less likely to be penalized for violations.

Suggested Citation

Konisky, David and Teodoro, Manuel P., When Governments Regulate Governments (July 1, 2015). American Journal of Political Science, 2015, DOI: 10.1111/ajps.12221. Available at SSRN: https://ssrn.com/abstract=2707741

David Konisky (Contact Author)

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Manuel P. Teodoro

Texas A&M University ( email )

College Station, TX 77843-4353
United States

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