Regulation by prices and by command

Standard economic theory states that regulation by price is more efficient than regulation by command and control. Exceptions may arise if regulators have good knowledge of the supply curve. In practice, though, governments usually regulate by command and control and do so when there is uncertainty about the technology of supply. We show that government may prefer to regulate by command and control when it cares about the investment decisions of a firm.We are grateful for comments by Kenneth Small, the editor, and two anonymous referees.     

RENT SEEKING CAN PROMOTE THE PROVISION OF PUBLIC GOODS*

Public officials often have little incentive to spend time and effort proposing policies that benefit others. When, however, some public policies generate rents to these officials, rent seeking in politics can motivate them to provide public goods. We consider the motivational effects of rent seeking on (i) policy, (ii) the the role of agenda-setting in social choice theory, (iii) the effects of graft and corruption in government, and (iv) the validity of cost-benefit analysis.     

A positive correlation between turnout and plurality does not refute the rational voter model

Many papers have tested the prediction of the rational voter model that, ceteris paribus, turnout will be low when potential voters expect the winner's plurality to be large. The appropriate null hypothesis, however, is unclear. We show that statistical models of voting in which each voter's decision of whether to vote does not vary with the expected plurality can nonetheless generate data which lead to both positive and negative correlations between turnout and plurality.     

Intertemporal Commitment Problems and Voting on Redistributive Taxation

A rich person who fears a loss of income may later favor redistributive taxation and a mix of taxes and public goods that differs from the one he now favors. If mobility is costly, and if government in each period uses majority voting to determine policy, then this person may prefer to live in a community that is permanently ruled by poor residents. Majority voting is a mechanism that can overcome intertemporal commitment problems of income insurance.