TY  - JOUR
AU  - Shleifer, Andrei
TI  - Efficient Regulation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15651
PY  - 2010
Y2  - January 2010
DO  - 10.3386/w15651
UR  - http://www.nber.org/papers/w15651
L1  - http://www.nber.org/papers/w15651.pdf
N1  - Author contact info:
Andrei Shleifer
Department of Economics
Harvard University
Littauer Center M-9
Cambridge, MA 02138
Tel: 617/495-5046
Fax: 617/496-1708
E-Mail: ashleifer@harvard.edu
M1  - published as Andrei Shleifer. "Efficient Regulation," in Daniel P. Kessler, editor, "Regulation vs. Litigation: Perspectives from Economics and Law" University of Chicago Press (2011)

AB  - Regulation of economic activity is ubiquitous around the world, yet standard theories predict it should be rather uncommon.  I argue that the ubiquity of regulation is explained not so much by the failure of markets, or by asymmetric information, as by the failure of courts to solve contract and tort disputes cheaply, predictably, and impartially.   The approach accounts for the ubiquity of regulation, for its growth over time, as well as for the fact that contracts themselves are heavily regulated.  It also makes predictions, both across activities and across jurisdictions, for the efficiency of regulation and litigation as strategies of enforcing efficient conduct.
ER  -