Mandate
Human Nature and the Limits (If Any) of Political Philosophy
David Estlund
Philosophy & Public Affairs, Summer 2011, Pages 207-237
"It is often supposed that a person is not required to do anything they cannot do. 'Ought' implies 'can,' as this is often put. Let's accept that for the sake of argument. Still, it is not obvious that if I can't muster the will to do something, then I can't do it. An inability to will an action might not entail an inability to do the action, in which case the action might yet be required...In any case, here is a related but different idea: even if it is not impossible to do whatever it is impossible to muster the will to do, perhaps it is still implausible to think one could be required to do what one could not muster the will to do. Perhaps we should accept that 'ought' implies 'can will.' If so, and if there are characteristic things that humans cannot muster the will to do, then human nature (in the sense of the limits of human motivational capacities) would stand as a prior set of facts that constrain what political philosophy can soundly prescribe or morally require. My thesis, simply stated, is that this is not so. If there are facts of human nature of this general kind, consisting in limits to what humans will be able to muster the will to do, they are not, simply as facts, constraints on what can soundly be prescribed or morally required. The reason is that agents' abilities and inabilities to muster their will are subject to moral evaluation in their own right. Some such inabilities are morally objectionable, others are not. The fact that some men cannot stand to be at a business meeting with a woman is a fact that must be taken as a constraint in certain practical contexts. It does not, however, force the retraction of a moral requirement to participate in meetings without gender discrimination. Nor would the fact, if it were one (which I doubt), that male sentiments of this kind are part of human nature refute a theory according to which the male-imposed exclusion of women from the halls of economic power is unjust. I want to argue that human nature - more specifically, whatever motivational incapacities are possessed by humans as such - is a constraint on some tasks in political philosophy but not on others. It is not a general constraint on political philosophy."
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Reactance versus Rationalization: Divergent Responses to Policies that Constrain Freedom
Kristin Laurin, Aaron Kay & Gavan Fitzsimons
Psychological Science, forthcoming
Abstract:
How do people respond to government policies and work environments that place restrictions on their personal freedoms? The psychological literature offers two contradictory answers to this question; here we attempt to resolve this apparent discrepancy. Specifically, we identify the absoluteness of a restriction as one factor that determines how people respond to it. Across two studies, participants responded to absolute restrictions (restrictions that were sure to come into effect) with rationalization: they viewed the restrictions more favorably, and valued the restricted freedoms less, compared to control participants. Participants responded in the opposite way to identical restrictions that were described as non-absolute (as having a small chance of not coming into effect): these participants displayed reactance, viewing the restrictions less favorably, and valuing the restricted freedoms more, compared to control participants. We end by discussing future directions, as well as practical applications.
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The Quality and Use of Regulatory Analysis in 2008
Jerry Ellig & Patrick McLaughlin
Risk Analysis, forthcoming
Abstract:
This article assesses the quality and apparent use of regulatory analysis for economically significant regulations proposed by federal agencies in 2008. A nine-member research team used a six-point (0-5) scale to evaluate regulatory analyses according to criteria drawn from Executive Order 12866 and Office of Management and Budget Circular A-4. Principal findings include: (1) the average quality of regulatory analysis, though not high, is somewhat better than previous regulatory scorecards have shown; (2) quality varies widely; (3) biggest strengths are accessibility and clarity; (4) biggest weaknesses are analysis of the systemic problem and retrospective analysis; (5) budget or "transfer" regulations usually receive low-quality analysis; (6) a minority of the regulations contain evidence that the agency used the analysis in significant decisions; (7) quality of analysis is positively correlated with the apparent use of the analysis in regulatory decisions; and (8) greater diffusion of best practices could significantly improve the overall quality of regulatory analysis.
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Welfare enhancing regulation exemptions
Murat Mungan
International Review of Law and Economics, December 2011, Pages 249-255
Abstract:
Sanctions for regulation violations are used to deter conduct which could potentially result in great social harms. This practice over-deters low-risk entities and under-deters high-risk entities, which leads to social losses. This paper analyzes whether and how such social losses can be mitigated. I show that this can be achieved by allowing regulatees to purchase passes exempting them from regulations at appropriate prices, although they remain liable for any harm they cause.
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Can markets be expected to prevent themselves from self-destruction?
Bo Rothstein
Regulation & Governance, December 2011, Pages 387-404
Abstract:
Even if competitive markets have shown themselves to be the most efficient organizational form for creating economic efficiency, the question of how they can avoid destructive influence from agents with opportunistic motives remains unresolved. Different institutional approaches have argued that to be efficient, markets need to be embedded in a set of formal and informal institutions. Because such institutions will in the long run make all market agents better off, they are labeled efficient institutions. Contrary to what is argued in neoclassical economics, it is unlikely that such institutions will be created endogenously by market agents because the institutions are to be understood as genuine public goods. Moreover, if such institutions have been established, we should expect market agents to face a collective action problem when sustaining them, leading to the destruction of the institutions. The conclusion is that if left to themselves, markets should be understood as inherently self-destructive.
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Regime Shift in Antitrust Laws, Economics, and Enforcement
Vivek Ghosal
Journal of Competition Law & Economics, December 2011, Pages 733-774
Abstract:
This article empirically models the longer-run, deep-seated shift in intellectual thinking that followed the Chicago School's criticism of the older antitrust doctrine and the shorter-run driving forces related to switches of the political party in power, merger waves, changes in economic activity, and the level of funding for the Antitrust Division, and quantifies their impact on enforcement by the Antitrust Division of the U.S. Department of Justice over the period from 1958 to 2002. The key findings are: (1) a distinct regime shift in antitrust enforcement during the 1970s and, post-regime shift, there has been a marked compositional change with a quantitatively large increase (decrease) in criminal (civil) antitrust court cases initiated; (2) post-regime shift, there appears to be a change in the role played by politics with Republicans initiating more (less) criminal (civil) court cases than Democrats, and the estimated quantitative effects are large; (3) disaggregating the total number of court cases into the main categories under which they are initiated (price-fixing, mergers, monopolization, and restraints-of-trade) shows that individual types of cases have widely differing responses to changes in the driving forces; and (4) in a horserace between the regime-shift and political effects on one side and the remaining variables on the other, the former forces win hands-down in explaining broad shifts in enforcement. Modeling the longer-run shift and disaggregating the court cases emerge as crucial to gaining insights into the intertemporal shifts in enforcement. The article elaborates on the causes for the shift in enforcement and on the effectiveness of antitrust.
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Jayson Lusk & Bailey Norwood
Applied Economic Perspectives and Policy, Winter 2011, Pages 463-483
Abstract:
This article highlights some key areas where economics can contribute to the current debate about animal welfare. Production economics reveals that producers will not maximize animal welfare, even if animal well-being is highly correlated with output. Welfare economics raises thorny issues about the double-counting of benefits when humans exhibit altruism towards animals, while public economics uncovers potential market failures and possible solutions. Consumer economics provides a means of determining human and animal benefits from animal well-being policies in dollar terms. Overall, economists have much to contribute to the animal welfare debate and the well-being of humans and animals could be improved with more economic analysis on the effects of private and government actions related to animal welfare.
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Patrick O'Neil & Dale Krane
Public Administration Review, forthcoming
Abstract:
Although the high-reliability organization (HRO) literature identifies several attributes that differentiate HROs from other types of organizations, these studies do not explain how an HRO comes into being, nor do they provide a means to gauge or measure the extent to which an organization exhibits the specified features. This article reports the results of a 97-year longitudinal case study tracking the emergence and continuation of HRO characteristics in the Federal Aviation Administration's air traffic control operations to answer the following questions: how do HRO functions emerge in public organizations, and do policy changes lead administrative changes, or is there little relation between policy and organizational change? The analysis shows that (1) HRO characteristics emerged incrementally over an extremely long period of time, and (2) policy changes preceded organizational changes early in the process of HRO development, but the relationship of policy change to organizational change decreased in later stages.
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Public Utility Ownership in 19th-Century America: The "Aberrant" Case of Water
Scott Masten
Journal of Law, Economics, & Organization, October 2011, Pages 604-654
Abstract:
Unlike other public utilities, most water in the United States is supplied by publicly owned and operated waterworks. The predominance of the public sector in the supply of water was not always the case, however; private firms dominated US water supply throughout most of the 19th century. This article analyzes the puzzle of why water and sanitation systems were the only major utilities to become predominantly public by, first, reexamining historical accounts of the problems of contracting for water services in light of modern theories of economic organization and, then, evaluating hypotheses derived from those accounts using data on 373 waterworks serving US municipalities with populations over 10,000 in 1890. Among other results, municipal ownership is found to be related to the distribution of population and commerce within a city in ways that suggest that frictions between cities and private companies over system extensions and improvements played a significant role in the shift to municipal ownership.
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Using the law to change the custom
Gani Aldashev et al.
Journal of Development Economics, March 2012, Pages 182-200
Abstract:
The custom often acts as a powerful hindrance to equity-increasing changes. In this paper, we present a simple model of legal dualism in which a progressive legal reform can, under certain conditions, shift the conflicting custom in the direction intended by the legislator. Formal law then acts as an outside anchor that exerts a 'magnet effect' on the custom. We also characterize the conditions under which a moderate reform performs better than a radical one in improving the welfare of the disadvantaged sections of the population. We illustrate our insights using examples on inheritance, marriage, and divorce in Sub-Saharan Africa and India.
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Rising Crude Oil Prices: The Link to Environmental Regulations
Philip Verleger
Business Economics, October 2011, Pages 239-248
Abstract:
Crude oil is not a homogenous commodity. Light sweet crude oils produce a high percentage of products desired by consumers after distillation. Other crude oils (heavy, sour, or high-sulfur crude) must be heavily processed to obtain needed products. The failure to understand the differences between desirable light crudes and heavy sour crude oils can lead to bad forecasts of market behavior. Using a stylized model of the market, I show that tightening environmental regulations in the absence of adequate refining capacity to process heavy sour crude puts upward pressure on crude prices and explains the 2008 price increase. The upward pressure is exacerbated by the monopolist practices of heavy sour crude producers, who set price differentials to maximize income. This model also can be used to analyze the impact of the supplies lost from Libya in 2011.
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Oligopsony Fed Cattle Pricing: Did Mandatory Price Reporting Increase Meatpacker Market Power?
Xiaowei Cai, Kyle Stiegert & Stephen Koontz
Applied Economic Perspectives and Policy, Winter 2011, Pages 606-622
Abstract:
We study beef packing margins before and after mandatory price reporting (MPR) was implemented in 2001 using a model that identifies and tests for switching between cooperative and non-cooperative regime pricing. Our results show that after MPR took effect, the duration of non-cooperative regimes was considerably shorter, while cooperative regimes were longer. Oligopsonistic rent, as measured by average economic profit, rose from $0.88/head in the 1990s to $2.59/head after 2001. While MPR is not likely the sole cause for such an increase, there was clearly more market power being exercised in fed cattle markets in the years after the program was implemented than before.
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The Intergovernmental Fiscal Effects of the Clean Air Act
Douglas Carr
Public Finance Review, November 2011, Pages 810-830
Abstract:
The impacts of air quality regulations under the Clean Air Act extend beyond directly regulated polluting industries; these regulations also affect the tax bases of local governments. To assess the local fiscal effects of nonattainment regulations under the Clean Air Act, this article analyzes revenue data spanning twenty years for counties throughout the entire United States. Attainment status for ozone, total suspended particulates (TSP), particulate matter smaller than 10 μm (PM10), and sulfur dioxide (SO2) is found to affect local governments' own source or property tax revenues. Nonattainment for these criteria pollutants results in regulations focusing on local industries. These findings indicate declining revenues in ozone, TSP, and PM10 nonattainment areas and suggest suppression of growth during the nonattainment period for SO2.