The meaning of regulatory costs

Regulatory costs are an essential aspect of the efficiency and quality of regulations. Moreover, they are a genuine loss of welfare which have a negative impact on national income. Surprisingly, regulatory costs are often neglected or misinterpreted in regulatory assessments, except—though only recently—for administrative compliance costs. One important reason is the lack of a clear and consistent definition as well as a practical and exhaustive typology of regulatory costs. This conceptual paper presents a cost taxonomy that takes into account all costs of regulation. We identify 16 direct and two indirect regulatory cost types. The former are costs borne by society in preparing and implementing regulations. For the government, they consist of information, decision-making, drawing-up, planning, administrative start-up, operational, monitoring, and enforcement costs. Citizens and businesses, on the other hand, incur rent-seeking, information, planning, three types of compliance, delay and enforcement costs. The indirect costs comprise the efficiency loss plus, in the event of poorly designed or market-based regulation, also transaction costs. The neglect of any of these costs may lead to the underestimation of costs in absolute or relative terms and thus to inefficient regulatory choices.     

The regulatory anticommons of green infrastructures

Development of green infrastructures (renewable energy plants and transmission networks) is urgently needed if significant reductions of greenhouse gas emissions are to be accomplished in the next few decades. But the huge financial investments required by these infrastructures will not be undertaken without a well-designed regulatory framework. This paper argues that barriers to the implementation of such a framework can best be understood by drawing analogies to the Law and Economics literature on anticommons. Although situations of ownership anticommons (many owners with veto rights) and regulatory anticommons (many regulators with veto rights) display some differences from the point of view of the preferences and the coordination costs, it is submitted that this analytic framework can be employed to assess and criticize recent EU and US proposals which try to improve planning and siting procedures for cross-border green infrastructures. The literature on anticommons also suggests that effective remedies to suboptimal resource use are directly dependent on the design of the coordination mechanisms among all the regulatory levels.     

Underwhelmed: hyperbole,regulatory policy,and the genetic revolution

Rapid advances in the field of genetics in recent years have caused some commentators to suggest the emergence of a "genetic revolution." Such advances have been both praised as the "future of medicine" and condemned for encouraging the acceptance in society of laissez-faire eugenics. Yet the effect of technological advances flowing from the science of genetics appear somewhat overstated as few products of the genetic revolution, particularly in the areas of gene therapy and genetic testing, have managed to satisfy scientists' expectations to date. Furthermore, misdirected regulation of such advances can exacerbate the social, legal, and ethical problems associated with genetics, particularly in the context of health care, where issues of human cloning and the use of premature genetic testing technologies dominate current public debate. In this article, the author criticizes the hyperbolic rhetoric surrounding the genetic revolution and calls for a more balanced and informed approach to the development of genetic policies and regulations. Such an approach should include substantial interdisciplinary debate and an active role on the part of government in the identification and communication of accurate information relating to the effects of recent technological advances in the field of genetics.     

The US financial regulatory reform, causes of financial crisis and its enlightenment on China

Deficiency of the US financial regulation has stimulated the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The fundamental causes of the regulatory deficiency can be categorized as follows: excessively indebted consumption culture in a long term, permanently abolishing the regulation on financial derivatives by the US Commodity Futures Trading Commission, and the regulations before the reform not fitting for the fictitious economy. The operation of financial products is like to fly a kite. The financial product is the kite, governmental adjustment is the string, market regulation is the wind, national culture and legislature and judicature are the environment. Those coordinated elements can guarantee a healthy financial market. To construct an effective financial regulatory system in China, it is needed to make culture with Chinese characteristics, advance the coordinated development of governmental and market regulation, and promote financial legislations and related implementation.     

The university technology transfer revolution in Saudi Arabia

This paper explains why and how a technology transfer revolution is taking place in Saudi Arabia to meet the mandate that Saudi Arabia become globally competitive as a knowledge-based innovative economy. The paper explains and identifies the new policies and institutions that have been introduced and developed to facilitate technology transfer and knowledge spillovers from the universities for commercialization and ultimately innovative activity and economic growth. The paper finds that a technology transfer revolution in Saudi Arabia is taking place, with the goal of leapfrogging from the factor-based stage of economic development to the innovation-based stage of economic development, while bypassing the intermediary efficiency-based stage of economic development.     

The evolution of regulatory enforcement action in the UK capital markets: a case of 'less is more'?

The first 150 words of the full text of this article appear below. Key points

• Formal enforcement action is a relatively rare occurrencewithin the UK capital markets regulatory framework. This characteristicdistinguishes the UK from the US, where there is a more intensefocus on enforcement, both public and private.
• Several featuresof the UK regulatory system contribute towards a low incidenceof enforcement. Some of these features are embedded in the statutoryframework, but the FSA has played a key role in the developmentof enforcement policy, while the continuing presence of self-regulationin the form of the Combined Code has also played a part.
• Thefocus on risk-based regulation in the UK has been a major influencefor enforcement policy. The move to more principles-based regulationhas also been a factor but one that is more difficult to interpret.If it is correct to assume that principles-based regulationdoes not affect the intensity of regulation, then the effecton the . . . [Full Text of this Article]