Agent discretion, regulatory policymaking, and different institutional arrangements

Regulatory Discretion and Compliance

This paper provides an empirical framework to evaluate regulatory discretion and apply it to California water quality regulation. We identify and estimate an adverse selection model of the regulator-discharger interaction to measure the extent to which the regulator’s environmental preferences and administrative or political costs affect penalties and compliance. We find that if the regulator p...

Institutional Design, Citizens’ Preferences and Policymaking

Much discussion of democratization seems to assume that allowing the citizens to shape public policy is one of the costs, rather than one of the benefits, of introducing a new democracy. Yet, a principal claim of democracy is to connect the desires of citizens and the actions of policymakers. Moreover, institutionalized citizen influence may help constrain elite exploitation and encourage citiz...

When is Discretion Superior to Timeless Perspective Policymaking?

The monetary policy literature assumes increasingly that policies are formulated according to the timeless perspective (Woodford, 1999a). However, treating the auxiliary state variables that characterize the timeless perspective equilibrium appropriately when evaluating policy performance, this paper shows that discretionary policymaking can be superior to timeless perspective policymaking and ...

Regulatory Arrangements, Financial Stability, and Regulatory Reform

Regulatory beneficiaries and informal agency policymaking.

Administrative agencies frequently use guidance documents to set policy broadly and prospectively in areas ranging from Department of Education Title IX enforcement to Food and Drug Administration regulation of direct-to- consumer pharmaceutical advertising. In form, these guidances often closely resemble the policies agencies issue in ordinary notice-and-comment rulemaking. However, guidances ...