Economic theory and local regulation

What is it about?

The author reviews some classical theoretical models of regulation (in particular, regulatory capture) and investigates how some specific features of local regulation may affect standard results. From a qualitative point of view, the main implications of the models remain valid both at the national and at the local level. However, some aspects of the local dimension, such as for instance a higher level of public monitoring or the existence of stronger interactions between the regulators and the regulated, affect the probability of regulatory capture and thus cannot be ignored in the design of effective regulatory policies.

Featured Image