Negative Incentives and Regulatory Capture: Noncompliance with Price Ceilings on Essential Medicines in India

Nonmarket scholars have paid limited attention to noncompliance as an alternative strategy to capture regulators; yet noncompliance is particularly consequential given its potentially significant negative externalities. We exploit rich data on price ceilings introduced in India in 2013 on 255 essential medicines to test whether noncompliance by other firms drives the focal firm's noncompliance decision. Our results indicate that noncompliance by other firms, particularly those with larger products in the market, is positively associated with a focal firm's noncompliance. The focal firm's scope and sales positively moderate this relationship. Overall, our study indicates that firms are more likely conclude that the potential benefits of regulatory capture using negative incentives outweigh the potential financial and social costs in the presence of a greater number of firms that are already noncompliant. As such, our study draws attention to negative incentives as an important yet largely overlooked nonmarket strategy.     

Investment and Growth: The Impact of Britain's Post‐War Trunk Roads Programme

In Great Britain, a basic inter‐urban network of motorways was completed in a very short period between the end of 1959 and 1972. We calculate that this substantial investment had the potential to reduce most inter‐urban journey times by about one third. In spite of this, a recent OECD study suggested that the investment had no discernible positive impact on the trend rate of economic growth. We attribute this outcome to a serious misalignment of the early investments with the then predominant flows of industrial and commercial traffics and a significant, and probably endogenous, increase in real wages in a road transport industry in which labour productivity was slow to improve. We conclude with a number of policy recommendations.     

Competition and Innovation in Retail Electricity Markets: Evidence from Italy

Italy's 2015 Annual Competition Law, if finally approved, provides for phasing out retail electricity price regulation, as well as the implementation of full retail liberalisation, from 1 July 2018. This is a significant reform, not just because it is consistent with the broader market design for electricity. Indeed, retail liberalisation is a qualifying element of the full integration of the European Union's electricity market. The full opening of retail markets provides a great opportunity for innovation, both on the demand side and on the supply side. This article investigates the theoretical background, and presents some empirical evidence, on the competition–innovation nexus in retail electricity markets.     

The political economy of ‘ordered competition’ in European telecoms

This article discusses the current efforts of policymakers to spur development of telecommunications infrastructure. It argues that the policy of ‘ordered competition’, widely implemented in this sector, has formed a highly beneficial environment for major players, who have the ability to influence the regulatory machine. The system protects the status quo, impedes the efficiency of the market process and allows unnecessary public subsidy of the industry's development. The main alternative to this regulatory regime is structural reform of the industry and the formation of a genuinely competitive marketplace which could function without ex ante regulation.     

Multiple Temporalities of Policy Circulation: Gradual,Repetitive and Delayed Processes of BRT Adoption in South African Cities

In 2006, bus rapid transit (BRT) swept across South African cities. Within three years of learning of the Bogotá model of BRT, Johannesburg's Rea Vaya opened, followed shortly by Cape Town's MyCiTi, while several other cities are at various stages of planning and implementation. This article traces the circulation of BRT across the South African urban context to expose the multiple and varied temporalities through which BRT came to appear as the only available solution. These earlier encounters, which include the first published discussion of BRT in South Africa in a 1973 conference report, study visits to Curitiba in the 1990s and a failed attempt to implement a Bogotá‐style BRT system in Cape Town in 2003, were instrumental in creating a fertile ground for later adoption practices. While it may appear as if circulated policies shorten the gestation time from policy introduction to policy adoption, these repeated attempts to implement circulated innovations ensure that the turnover only seems accelerated. This article unravels the story of BRT adoption, departing from the theoretical discussions of the policy circulation process as a rapid phenomenon, instead demonstrating that it is gradual, repetitive and at times delayed.     

Regulating Work: Measuring the Scope and Burden of Occupational Licensure Among Low‐ and Moderate‐Income Occupations in the United States

This study examines the scope and burden of occupational licensing laws in the United States for 102 low‐ and moderate‐income occupations. Findings indicate that the licences studied require of aspiring workers, on average, $US209 in fees, one exam, and about nine months of education and training, plus minimum grade and age levels. Data also indicate striking disparities in requirements within and between occupations and within and between states. These inconsistencies likely reflect not the relative public health and safety risks of occupations, but instead the lobbying prowess of practitioners in securing laws to shut out competition.