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on Regulation |
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Issue of 2005‒10‒22
twenty-six papers chosen by Christian Calmes Université du Québec en Outaouais, Canada |
| By: | Francesco Busato; Bruno Chiarini; Pasquale de Angelis; Elisabetta Marzano (Department of Economics, University of Aarhus, Denmark) |
| Abstract: | In this paper we investigate the effects of different fiscal policies on the firm choice to produce underground. We consider a tax evading firm operating simultaneously both in the regular and in the underground economy. We suggest that such a kind of firm, referred to as moonlighting firm, is able to offset the specific costs usually stressed by literature on underground production, such as those suggested by Loayza (1994) and Anderberg et al. (2003). Investigating the effects of different fiscal policy interventions, we find that taxation is a critical parameter to define the size of capital allocation in the underground production. In fact, a strong and inverse relationship is found, and tax reduction is the best policy to reduce the convenience to produce underground. We also confirm the depressing effect on investment of taxation (see, for instance, Summers, 1981), so that tax reduction has no cost in terms of investment. By contrast, the model states that while enforcement is an effective tool to reduce capital allocation in the underground production, it also reduce the total capital stock. Moreover, we also suggest that the allowance of incentives to capital accumulation may generate, in this specific typology of firm, some unexpected effects, causing, together with a positive investment process, also an increase in the share of irregularity. This finding could explain, in a microeconomic framework, the evidence of Italian southern regions, where high incentives are combined with high irregularity ratios. |
| Keywords: | evasion, moonlighting, capital subsidies, underground production. |
| JEL: | E22 H25 H26 |
| Date: | 2005–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2005-10&r=reg |
| By: | Jacques Ziller |
| Abstract: | The notion of 'Administrative Authority' has several dimensions in EU law. From a functional perspective, administrative authority may be exercised according to three patterns: indirect administration by member states' governmental institutions - the typical Community pattern - direct administration by the EU institutions or co-administration which implies some coordination between both types of institutions. In an organic perspective, it can be allocated to the European Commission, EC executive agencies, EC regulatory agencies, and member state or sub-state governmental agencies. A number of legal principles apply to the exercise of EU administrative authority, e.g. the principles of good administration, or representative and participative democracy, of administrative cooperation as well as general principles of European administrative law - for instance proportionality, legitimate expectations etc. In the perspective of accountability, judicial review by EC and national courts is prominent, but comes only after reciprocal monitoring of EU and national institutions, parliamentary control, and the prominent role of the European Ombudsman. |
| Keywords: | governance; implementation; institutionalism; integration theory; multilevel governance; networks; organization theory; participation; public administration; regulation; EU Charter of Fundamental Rights; European citizenship; European law; judicial review; legal personality; subsidiarity; access to documents; accountability; decentralisation; institutions; Court of Auditors; Court of First Instance; European Agencies; European Commission; European Council; European Court of Justice; European Ombudsman; European Parliament |
| Date: | 2004–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0014&r=reg |
| By: | Jacques Ziller |
| Abstract: | The third part of the Constitution for Europe has been submitted to hard criticism. The content of this part however, is indispensable to a Constitution of the European Union as it is a consolidation of the legal bases and institutional details which are necessary to the functioning of the EU. As the Constitution is substituting the EC and EU treaties, detailed legal bases are indispensable in order to keep the acquis communautaire alive as well as to maintain the principle of direct applicability for the provisions of the Constitution. An examination of the possible alternatives in the light of political constraints shows that the Convention has chosen the optimal solution, i.e. consolidation in the form of a third part of the Constitution. A scrutiny of the content of the third part shows that the work of the legal experts from the Commission, the Council and the Parliament, has been far more innovative as it might seem at first glance. According to the two mandates they had received from the Praesidium, they reorganised the text in a way that puts the citizen in the front line - instead of the market. The adaptation of the contents of the EC and EU treaties shows as much continuity as change, both due to the adaptation of legal bases to the new system of acts and competences, and to additional legal bases. The ICG made some small further progress but only few steps backwards |
| Keywords: | constitutional change; acquis communautaire; competences; direct effect; European law; European Convention; founding Treaties; Treaty on European Union; treaty reform |
| Date: | 2004–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0015&r=reg |
| By: | Bruno de Witte |
| Abstract: | Now that the Constitution for Europe is signed, it must be ratified by each of the 25 member states according to their own constitutional requirements. If one of those states is unable to ratify (because of the negative outcome of a popular referendum of for some other reason), the future of the Constitution becomes very uncertain. The paper explores the various scenarios for dealing with such a ratification crisis from a legal perspective |
| Keywords: | treaty reform; constitutional change; law; differentiated integration |
| Date: | 2004–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0016&r=reg |
| By: | Hanns Ullrich |
| Abstract: | In the European Union the relationship between anti-trust law and the law against unfair practices in competition raises not only issues of how to properly delimit the scope of application of the rules of both bodies of law, but also of how to divide the exercise of legislative authority over these matters between the Community and its Member States , and of how to deal with divergences existing between the various national laws in both areas. As far as national anti-trust law is concerned , primacy of Community law, as established by Reg.1/2003, will solve the conflicts, but it cannot extend, and the Regulation expressly does not extend such primacy to national laws against unfair competition, thus leaving room for overlap and conflicts. However, it is much less the risk of direct or – more likely – indirect conflicts which needs to be examined, than the impact which the law against unfair business practices may have on the overall operation of competition in the Community . It is with a view to this intrinsic interdependency between the law against restrictive practices and the law against unfair practices that this paper examines both the development of Community anti-trust law and of harmonization of national unfair competition laws. The point is made that , on the one hand, the Community seeks to reinforce the competitive process in the market place even through consumer-related unfair competition law in that, by way of harmonization of the law, it essentially imposes upon Member States the concept of a strictly information-reliant protection of consumers ,and, on the other ,that ,as regards conduct in pure business-relationships, the Community, by a subsidiarity approach, leaves Member States much room to regulate “ competition on the merits “as they see the merits of particular business practices. In concluding, it is argued that such reliance on regulatory competition might well be used to counterbalance a one-dimensional welfare understanding of Community anti-trust law by more freedom oriented concepts of fairness in competition. |
| Keywords: | economic law; free movement; harmonisation; Single Market; competition policy |
| Date: | 2005–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0017&r=reg |
| By: | Christine Bakker; Elsa Gopala Krishnan; Luisa Vierucci; Pierre-Marie Dupuy |
| Abstract: | Building on session reports collected over a span of two years, this Working Paper consolidates the extensive discussions that took place within the EUI Working Group on International Criminal Law. Under the banner of international criminal law, a broad variety of issues, including both substantive criminal law and procedural rules, as well as international case law and national jurisprudence, were addressed by the participants. Specific themes such as the principle of complementarity under the Rome Statute, the issue of immunities, and that of universal jurisdiction, recurred in the debates and are explored in this Paper. |
| Date: | 2005–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0018&r=reg |
| By: | Sebastian Krapohl |
| Abstract: | "" |
| Date: | 2005–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0019&r=reg |
| By: | Marie-Ange Moreau |
| Abstract: | One of the most important effects of the employment’s internationalisation is analysed by the movement of firms in Europe called “delocalisation”. In France the debate is stressed on redundancy and loss of jobs. For complex reasons, the environment created by the European market and the globalisation have been forgotten. But it is impossible to research adequate answers if there is no analysis of the multinational firms on the global market and, inside, on the European market. Three ways are presented in this paper: the opportunity to develop/create a territorial social dialogue at a national or regional level, a system of flexicurity and a transnational collective bargaining |
| Date: | 2005–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0025&r=reg |
| By: | Jacques Ziller |
| Abstract: | What’s New in European Administrative Law? Transcription of the Statements and Discussions of the Round Table held at the EUI on10 December 2004 : Jacques Ziller, Foreword; Edoardo Chiti, The Relationship between National Administrative Law and European Administrative Law in Administrative Procedures ; Diana-Urania Galetta, The Obligation for National Administrative Bodies to Review their Final Administrative Decisions ; Jean Bernard Auby, A Physionomy of European Judicial Review of Administration (in French); Karl-Peter Sommermann, Europeanisation and Transformation of Administrative Justice in Europe.Européanisation et transformation de la justice administrative en Europe (in French); Paul Craig, Process Rights in Adjudication and Rulemaking: Legal and Political ; Susana de la Sierra, The Constitutional Bases of European Administrative Law; Loïc Azoulay, Broadening and Elevation the Scope of European Administrative Law (in French); Kathrin Maria Scherr, The Concept of Administrative Self-Remedy under EC Law; Joana Mendes Participation Rights |
| Keywords: | Europeanization; implementation; multilevel governance; networks; participation; public administration; fundamental/human rights; judicial review; mutual adjustment; subsidiarity; comitology; decentralisation; institutions; European Agencies |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0026&r=reg |
| By: | Christian Joerges |
| Abstract: | XX |
| Date: | 2005–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0028&r=reg |
| By: | Fabrizio Cafaggi |
| Abstract: | The essay concentrates on the relationship between civil liability and administrative regulation in EPL. After examining their historical evolution, he concludes that they have frequently complemented each other. Such complementarity has often been based on the need to integrate reciprocal insufficiencies. This happened, for example, at the end of the nineteenth Century, when welfare regulation complemented civil liability for industrial accidents; and at the end of the twentieth century, when civil liability complemented economic de-regulation. The normative thesis is that civil liability and regulation, public and private, are functional complements to be used simultaneously in order to pursue homogeneous goals: higher consumer and environmental protection. While the approach is meant to have general application, the relationship is analysed in two fields: product safety and environmental protection. The descriptive claim is that, both at the European and national levels, there is insufficient coordination between civil liability and regulation. He advocates a more integrated approach in relation to a) substantive rules, i.e. product defectiveness, remedies in product and environmental liability, and to b) institutions, judges, public and private regulators, called upon to administer the two systems. To pursue a coordinated strategy institutional changes are required. A different functional partitioning between regulation and civil liability, in order to assess and manage risks associated to dangerous products and processes, is a necessary but insufficient step; a new institutional framework, designed to ensure that effective deterrence and just compensation occur, is also required. These are not only necessary components of European citizenship but also important requirements of an efficient integrated European market. The paper emphasizes the importance of recognizing the liability of regulators in ensuring the effectiveness of regulatory strategies. Greater coordination among national judiciaries in relation to product and environmental liability, based on the duty of loyal and sincere cooperation, is advocated. In relation to general concepts, such as product safety and environmental pollution, harmonized judicial interpretation is particularly necessary, given the width of legislative definitions and the strategic function of national regulators and judges in specifying standards and monitoring compliance |
| Keywords: | regulation |
| Date: | 2005–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0029&r=reg |
| By: | Gavin Anderson |
| Abstract: | This paper addresses the counterhegemonic potential of rights constitutionalism in the age of globalization, and in particular its capacity to respond to the rise of significant forms of private power. It locates this issue in the context of the paradigmatic debate of modern law between liberal legalism and legal pluralism. The latter challenges the core epistemological assumptions of orthodox constitutional thought that law is exclusively state law (by positing the existence of non-state legal orders) and that this tends towards coherence and effectiveness. For legal pluralism, constitutionalism's importance does not lie primarily in the outcome of normative argument, but in symbolic terms as a legitimating discourse. Accordingly, to claim that law only emanates from state institutions, and is an effective tool of social engineering, is not simply an analytical statement, but reflects a substantive political agenda. The politics of definition of classical liberalism and the 'new constitutionalism' are contrasted to consider how they set the parameters for political debate. The former, which views constitutionalism as negative limits on the state, reinforces hegemonic interests by its narrow conception of political power as inhering in public institutions, whereas the latter, by locating constitutional norms, for example in the actions of multinational corporations, potentially opens up private power to constitutional scrutiny. It is concluded that the prospects for counterhegemonic constitutionalism lie in opening up the politics of definition of constitutional law to critical debate. |
| Keywords: | globalization |
| Date: | 2005–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0158&r=reg |
| By: | Wilko Bolt; Alexander F. Tieman |
| Abstract: | In a dynamic theoretical framework, commercial banks compete for customers by setting acceptance criteria for granting loans, taking regulatory requirements into account. By easing its acceptance criteria a bank faces a trade-off between attracting more demand for loans, thus making higher per period profits, and a deterioration of the quality of its loan portfolio, thus tolerating a higher risk of failure. Our main results state that more stringent capital adequacy requirements lead banks to set stricter acceptance criteria, and that increased competition in the banking industry leads to riskier bank behavior. In an extension of our basic model, we show that it may be beneficial for a bank to hold more equity than prescribed by the regulator, even though holding equity is more expensive than attracting deposits. |
| Keywords: | Banking , Competition , Bank regulations , Capital , |
| Date: | 2004–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/11&r=reg |
| By: | Richard Podpiera |
| Abstract: | We explore the relationship between banking sector performance and the quality of regulation and supervision as measured by compliance with the Basel Core Principles for Effective Banking Supervision (BCP). Using BCP assessment results for 65 countries and 1998-2002 panel data for other variables, we find a significant positive impact of higher compliance with BCP on banking sector performance, as measured by nonperforming loans and net interest margin, after controlling for the level of development of the economy and the financial system and macroeconomic and structural factors. |
| Keywords: | Basel Core Principles , Banking , Loans , Interest rates on loans , Economic models , |
| Date: | 2004–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/204&r=reg |
| By: | Kina Chenard; Udaibir S. Das; Marc Quintyn |
| Abstract: | This paper provides empirical evidence that the quality of regulatory governance-governance practices adopted by financial system regulators and supervisors-matters for financial system soundness. The paper constructs indices of financial system soundness and regulatory governance, based on country data collected from the Financial Sector Assessment Program (FSAP). Regression results indicate that regulatory governance has a significant influence on financial system soundness, along with variables reflecting macroeconomic conditions, the structure of the banking system, and the quality of political institutions and public sector governance. The results also indicate that good public sector governance amplifies the impact of regulatory governance on financial system soundness. |
| Keywords: | Governance , Financial systems , Bank supervision , Transparency , Economic models , |
| Date: | 2004–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/89&r=reg |
| By: | Robert Dekle; Kenneth Kletzer |
| Abstract: | An endogenous growth model with financial intermediation demonstrates how deposit insurance and prudential regulatory forbearance lead to banking crises and growth declines. The model assumptions are based on features of the Japanese financial system and regulation. The model demonstrates how banking and growth crises can evolve under perfect foresight. The dynamics for economic aggregates and asset prices predicted by the model are shown to be generally consistent with the experience of the Japanese economy and financial system through the 1990s. We also test our maintained hypothesis of rational expectations using asset price data for Japan over the 1980s and 1990s. |
| Keywords: | Economic growth , Japan , Financial crisis , |
| Date: | 2005–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/169&r=reg |
| By: | Marcello M. Estevão |
| Abstract: | Euro-area real wages have decelerated sharply in the last 20 years, but this has not yet translated into visibly lower unemployment or faster growth. Weak output growth after such a cost shock is somewhat puzzling and has led some to question the benefits of wage moderation. By isolating structural from cyclical factors in a panel of industrial countries, I show that structurally slower real wage growth, that is, "wage moderation," does raise output growth and lower unemployment rates. However, I show that the impact on both variables depends crucially on product market regulation: weaker competition and barriers to entry mute the growth effects of structural real wage changes by allowing incumbent firms to appropriate larger rents. In this context, overly regulated product markets in the euro area are undermining the effects of labor market reforms on output and employment. |
| Date: | 2005–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/191&r=reg |
| By: | Adolfo Barajas; Ralph Chami; Thomas F. Cosimano |
| Abstract: | Drawing from a unique data set comprising 2,893 banks and 152 countries over the period 1987 to 2000, we test whether the adoption of the Basel Accord by Latin American and Caribbean countries was responsible for the serious slowdowns in credit growth experienced by these countries. We find that, on average, both bank capitalization and lending activities in Latin America increased after Basel. Consequently, Basel did not seem to lead to an overall credit decline. However, we do find evidence that loan growth became more sensitive to some risk factors. Our study suggests that the upcoming adoption of Basel II might cause greater procyclicality of credit. |
| Keywords: | Bank supervision , Latin America , Capital markets , Basel Core Principles , Credit , |
| Date: | 2005–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/38&r=reg |
| By: | Alexander Plekhanov; Raju Singh |
| Abstract: | Countries have adopted various institutional responses to subnational government borrowing. Using a sample of 44 countries 1982-2000, this paper provides a panel data analysis to determine the most effective borrowing constraints for containing local fiscal deficits. The results suggest that no single institutional arrangement is superior under all circumstances. The appropriateness of specific arrangements depends upon other institutional characteristics, particularly the degree of vertical fiscal imbalance, the existence of any bailout precedent, and the quality of fiscal reporting. |
| Keywords: | Budget deficits , Debt , Deficit financing , Fiscal reforms , Government expenditures , |
| Date: | 2005–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/54&r=reg |
| By: | Ian Lienert |
| Abstract: | There has been widespread adoption of new laws to support new public management. In many countries that have implemented comprehensive and deep reforms, new or amended laws have fundamentally changed the role of the state and the budget processes supporting it. Paradoxically, far-reaching modifications to the legal framework for public management have been strongest in countries that often rely on executive decrees for introducing reforms. This reflects the fundamental nature of the changes, including introducing performanceoriented budgeting and enhancing fiscal transparency and accountability. Differences in political systems, policy preoccupations, administrative arrangements and legal cultures will prevent globalization of the legal framework for public management. |
| Keywords: | Public debt , Debt management , Budgets , Fiscal reforms , |
| Date: | 2005–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/62&r=reg |
| By: | Taline Koranchelian; Domenico Fanizza |
| Abstract: | This paper applies a search matching model with firing restrictions to examine whether the existence of firing restrictions affects the outcome of the matching process and the natural rate of unemployment in Tunisia. The paper concludes that the removal of firing restrictions is likely to produce a favorable but limited impact on unemployment in Tunisia. |
| Keywords: | Employment , Tunisia , Unemployment , Labor markets , wages , |
| Date: | 2005–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/92&r=reg |
| By: | Marcela Eslava (CEDE, Universidad de los Andes); John Haltiwanger (University of Maryland, NBER and IZA Bonn); Adriana Kugler (University of Houston, NBER, CEPR and IZA Bonn); Maurice Kugler (University of Southampton) |
| Abstract: | In this paper, we analyze employment and capital adjustments using a panel of plants from Colombia. We allow for nonlinear adjustment of employment to reflect not only adjustment costs of labor but also adjustment costs of capital, and vice-versa. Using data from the Annual Manufacturing Survey, which include plant-level prices, we generate measures of plant-level productivity, demand shocks, and cost shocks, and use them to measure desired factor levels. We then estimate adjustment functions for capital and labor as a function of the gap between desired and actual factor levels. As in other countries, we find non-linear adjustments in employment and capital in response to market fundamentals. In addition, we find that employment and capital adjustments reinforce each other, in that capital shortages reduce hiring and labor shortages reduce investment. Moreover, we find that the market oriented reforms introduced in Colombia after 1990 increased employment adjustments, especially on the job destruction margin, while reducing capital adjustments. Finally, we find that while completely eliminating frictions from factor adjustments would yield a dramatic increase in aggregate productivity through improved allocative efficiency, the reforms introduced in Colombia generated only modest improvements. |
| Keywords: | joint factor adjustment, irreversibilities, adjustment costs, input reallocation, deregulation |
| JEL: | E22 E24 O11 C14 J63 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1751&r=reg |
| By: | Rita Almeida (World Bank and IZA Bonn); Pedro Carneiro (University College London, IFS, cemmap and IZA Bonn) |
| Abstract: | This paper investigates how enforcement of labor regulation affects the firm’s use of informal employment and its impact on firm performance. Using firm level data on informal employment and firm performance, and administrative data on enforcement of regulation at the city level, we show that in areas where law enforcement is stricter firms employ a smaller amount of informal employment. Furthermore, by reducing the firm’s access to unregulated labor, stricter enforcement also decreases average wages, productivity and investment. Our results are robust to several specification changes, and to instrumenting enforcement with 1) measures of access of labor inspectors to firms and 2) measures of general law enforcement in the area where the firm is located. |
| Keywords: | informal sector, labor market regulation, labor demand, flexibility, productivity |
| JEL: | J3 J6 O17 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1759&r=reg |
| By: | Fabio Schiantarelli (Boston College and IZA Bonn) |
| Abstract: | The main purpose of this paper is to provide a critical overview of the recent empirical contributions that use cross country data to study the effect of product market regulation and reform on a country’s macroeconomic performance. After a brief review of the theoretical literature and of relevant micro-econometric evidence, the paper discusses the main data and methodological issues related to empirical work on this topic. It then critically evaluates the cross country evidence on the effect of product market regulation on mark-ups, firm dynamics, investment, employment, innovation productivity, and output growth. A summary of what we learn from the econometric results concludes the paper. |
| Keywords: | regulation, product market, performance, productivity, innovation, growth |
| JEL: | D24 K20 L10 L51 O31 O40 O57 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1791&r=reg |
| By: | Jeremy Bertomeu (Carnegie Mellon University) |
| Abstract: | This paper considers the problem of a government whose objective is to reduce total consumption of a socially undesirable good using taxation and enforcement. Consumers have access to an illegal sector offering a perfect substitute to official goods and whose size is determined by competitive entry. When the official price is lower than the optimal monopoly price of an illegal seller, legal purchases will depend only on the cost parameters of the illegal sector. Then, if demand is inelastic, entry is important or the profit margin of illegal sellers is low, there may be a global minimum in consumption such that the good is legally sold. The optimal pricing decision of an official monopoly who may or may not sell to the illegal sector is also examined. |
| Keywords: | Entry, Price Competition, Coordination, Drugs, Increasing Returns |
| JEL: | C71 D42 D62 H26 |
| Date: | 2005–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0510005&r=reg |
| By: | Clive J Stones |
| Abstract: | This paper considers the relationship between the regulator's pricing decision and the allocation of risk between consumers and shareholders. Consumers are willing to trade-off price variations against a lower expected price. Prices are higher in adverse economic conditions but shareholder returns are not necessarily lower. It might be optimal to insure shareholders against market risk to achieve a lower expected price. The socially optimal capital structure depends on consumers' and shareholders' attitudes to risk. There is only one very special set of conditions where the social optimum is 100% debt finance with the firm operating ona 'not-for-profit' basis. |
| Keywords: | Regulation; gearing; leverage; debt finance; equity finance. |
| JEL: | G32 G38 L51 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:05/31&r=reg |