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Regulation

Reclaiming the Environmental Agenda

The past twenty-five years have seen a significant evolution in environmental policy, with new environmental legislation and substantive amendments to earlier laws, significant advances in environmental science, and changes in the treatment of science (and scientific uncertainty) by the courts. This book offers a detailed discussion of the important issues in environmental law, policy, and economics, tracing their development over the past few decades through an examination of environmental law cases and commentaries by leading scholars. The authors focus on pollution, addressing both pollution control and prevention, but also emphasize the evaluation, design, and use of the law to stimulate technical change and industrial transformation, arguing that there is a need to address broader issues of sustainable development.

Environmental Law, Policy, and Economics, which grew out of courses taught by the authors at MIT, treats the traditional topics covered in most classes in environmental law and policy, including common law and administrative law concepts and the primary federal legislation. But it goes beyond these to address topics not often found in a single volume: the information-based obligations of industry, enforcement of environmental law, market-based and voluntary alternatives to traditional regulation, risk assessment, environmental economics, and technological innovation and diffusion. Countering arguments found in other texts that government should play a reduced role in environmental protection, this book argues that clear, stringent legal requirements--coupled with flexible means for meeting them--and meaningful stakeholder participation are necessary for bringing about environmental improvements and technologicial transformations.

This book is regularly updated online at http://mitpress.mit.edu/ashford_environmental_law

Over the past twenty years, economic theory has begun to play a central role in antitrust matters. In earlier days, the application of antitrust rules was viewed almost entirely in formal terms; now it is widely accepted that the proper interpretation of these rules requires an understanding of how markets work and how firms can alter their efficient functioning. The Handbook of Antitrust Economics offers scholars, students, administrators, courts, companies, and lawyers the economist’s view of the subject, describing the application of newly developed theoretical models and improved empirical methods to antitrust and competition law in both the United States and the European Union. (The book uses the U.S. term "antitrust law" and the European "competition law" interchangeably, emphasizing the commonalities between the two jurisdictions.)

After a general discussion of the use of empirical methods in antitrust cases, the Handbook covers merger agreements, abuses of dominance (or unilateral effects), and market features that affect the ways firms compete. Chapters examine such topics as analyzing the competitive effects of both horizontal and vertical mergers, detecting and preventing cartels, theoretical and empirical analyses of vertical restraints, state aids, the relationship of competition law to the defense of intellectual property, and the application of antitrust law to "bidding markets," network industries, and two-sided markets.

Contributors:
Mark Armstrong, Jonathan B. Baker, Timothy F. Bresnahan, Paolo Buccirossi, Nicholas Economides, Hans W. Friederiszick, Luke M. Froeb, Richard J. Gilbert, Joseph E. Harrington, Jr., Paul Klemperer, Kai-Uwe Kuhn, Francine Lafontaine, Damien J. Neven, Patrick Rey, Michael H. Riordan, Jean-Charles Rochet, Lars-Hendrik Röller, Margaret Slade, Giancarlo Spagnolo, Jean Tirole, Thibaud Vergé, Vincent Verouden, John Vickers, Gregory J. Werden.

This new edition of the leading text on business and government focuses on the insights economic reasoning can provide in analyzing regulatory and antitrust issues. Departing from the traditional emphasis on institutions, Economics of Regulation and Antitrust asks how economic theory and empirical analyses can illuminate the character of market operation and the role for government action and brings new developments in theory and empirical methodology to bear on these questions.The fourth edition has been substantially revised and updated throughout, with new material added and extended discussion of many topics. Part I, on antitrust, has been given a major revision to reflect advances in economic theory and recent antitrust cases, including the case against Microsoft and the Supreme Court's Kodak decision. Part II, on economic regulation, updates its treatment of the restructuring and deregulation of the telecommunications and electric power industries, and includes an analysis of what went wrong in the California energy market in 2000 and 2001. Part III, on social regulation, now includes increased discussion of risk-risk analysis and extensive changes to its discussion of environmental regulation. The many case studies included provide students not only pertinent insights for today but also the economic tools to analyze the implications of regulations and antitrust policies in the future. The book is suitable for use in a wide range of courses in business, law, and public policy, for undergraduates as well at the graduate level. The structure of the book allows instructors to combine the chapters in various ways according to their needs. Presentation of more advanced material is self-contained. Each chapter concludes with questions and problems.

Downloadable instructor resources available for this title: file of figures in the book

An Economic Romance

A love story that embraces the business and economic issues of the day?

The Invisible Heart takes a provocative look at business, economics, and regulation through the eyes of Sam Gordon and Laura Silver, teachers at the exclusive Edwards School in Washington, D.C. Sam lives and breathes capitalism. He thinks that most government regulation is unnecessary or even harmful. He believes that success in business is a virtue. He believes that our humanity flourishes under economic freedom. Laura prefers Wordsworth to the Wall Street Journal. Where Sam sees victors, she sees victims. She wants the government to protect consumers and workers from the excesses of Sam's beloved marketplace.

While Sam and Laura argue about how to make the world a better place, a parallel story unfolds across town. Erica Baldwin, the crusading head of a government watchdog agency, tries to bring Charles Krauss, a ruthless CEO, to justice. How are these two dramas connected? Why is Sam under threat of dismissal? Will Erica Baldwin find the evidence she needs? Can Laura love a man with an Adam Smith poster on his wall? The answers in The Invisible Heart give the reader a richer appreciation for how business and the marketplace transform our lives.

This landmark theoretical book is about the mechanisms by which special interest groups affect policy in modern democracies. Defining a special interest group as any organization that takes action on behalf of an identifiable group of voters, Gene Grossman and Elhanan Helpman ask: How do special interest groups derive their power and influence? What determines the extent to which they are able to affect policy outcomes? What happens when groups with differing objectives compete for influence?

The authors develop important theoretical tools for studying the interactions among voters, interest groups, and politicians. They assume that individuals, groups, and parties act in their own self-interest and that political outcomes can be identified with the game-theoretic concept of an equilibrium. Throughout, they progress from the simple to the more complex. When analyzing campaign giving, for example, they begin with a model of a single interest group and a single, incumbent policy maker. They proceed to add additional interest groups, a legislature with several independent politicians, and electoral competition between rival political parties. The book is organized in three parts. Part I focuses on voting and elections. Part II examines the use of information as a tool for political influence. Part III deals with campaign contributions, which interest groups may use either to influence policy makers' positions and actions or to help preferred candidates to win election.

Markets and Choices in a Free Society


Since 1991, Robert Barro has been a lively contributor to the Wall Street Journal and other popular financial media. Getting It Right brings together, updates, and expands upon these writings that showcase Barro's agility in applying economic understanding to a wide array of social issues.

Barro, a "conservative who takes no prisoners," and a self-described libertarian, believes that most governments have gone much too far in their spending, taxation, and regulation. The dominant theme in these wide-ranging essays is the importance of institutions that ensure property rights and free markets. The discussion deals especially with the appropriate range of government: which areas represent useful public policy and which are unnecessary interference.

The first section of the book considers these questions in the context of the determinants of long-run economic growth. In addition to basic economics, Barro assesses related political topics, such as the role of public institutions, the optimal size of countries, and the consequences of default on foreign debt. The second section deals with the proper role and form of monetary policy. Barro argues that government should provide markets with a stable nominal framework and then stay out of the way to best allow for price stability.

Writings in the third section cover fiscal and other macroeconomic policies. Topics include the distorting influences of taxation, especially taxes on capital income; infrastructure investment and other government spending; and the consequences of public debt and budget deficits. In a final section, Barro looks at more micro issues such as cartels, tax amnesties, school choice, privatization, cigarette-smoking regulation, endangered species regulation, the market for baseball players, and term limits for politicians.


Principles and Institutions

As Chairman of the Civil Aeronautics Board in the late 1970s, Alfred E. Kahn presided over the deregulation of the airlines and his book, published earlier in that decade, presented the first comprehensive integration of the economic theory and institutional practice of economic regulation. In his lengthy new introduction to this edition Kahn surveys and analyzes the deregulation revolution that has not only swept the airlines but has transformed American public utilities and private industries generally over the past seventeen years.

While attitudes toward regulation have changed several times in the intervening years and government regulation has waxed and waned, the question of whether to regulate more or to regulate less is a topic of constant debate, one that The Economics of Regulation addresses incisively. It clearly remains the standard work in the field, a starting point and reference tool for anyone working in regulation.

Kahn points out that while dramatic changes have come about in the structurally competitive industries - the airlines, trucking, stock exchange brokerage services, railroads, buses, cable television, oil and natural gas - the consensus about the desirability and necessity for regulated monopoly in public utilities has likewise been dissolving, under the burdens of inflation, fuel crises, and the traumatic experience with nuclear plants. Kahn reviews and assesses the changes in both areas: he is particularly frank in his appraisal of the effect of deregulation on the airlines.

His conclusion today mirrors that of his original, seminal work - that different industries need different mixes of institutional arrangements that cannot be decided on the basis of ideology.