The politics of managed competition: public abuse of the private interest

The doctrine of managed competition in health care sought to achieve the social goals of access and efficiency using market incentives and consumer choice rather than governmental regulation and public administration. In retrospect, it demanded too much from both the public and the private sectors. Rather than develop choice-supporting rules and institutions, the public sector has promoted process regulation and benefit mandates. The private health insurance sector has pursued short-term profitability rather than cooperate in the development of fair competition and informed consumer choice. Purchasers have subsidized inefficient insurance designs in order to exploit tax and regulatory loopholes and to retain an image of corporate paternalism. America's health care system suffers from the public abuse of private interests and the private abuse of the public interest.     

An experimental model of regulating the sharing economy in China: The case of online car hailing

Online car hailing represents a disruptive innovation model in the sharing economy and requires a new regulatory response. China's attempts to regulate this emerging industry can be considered highly experimental model. To relieve the pressure from offline competitors and to clarify the ambiguous legal status of online car hailing, China currently enforces a strict regulatory scheme through what can be described as a central-local dual system. Questions, however, have arisen regarding the legality, proportionality and effectiveness of this approach. Moreover, the current system's choice for a segmented market strategy heavily impairs the sustainable development of the sharing economy. Therefore, the adoption of Internet-based regulations for online car hailing might create better prospects to establish a fairly competitive market as well as to further boost the ever dynamic Internet sharing economy in China.     

The challenges of applying turnover threshold to the sharing economy for control of concentrations between undertakings in China

The existing notification threshold for Chinese control of concentrations between undertakings is a turnover threshold, complemented by a market share threshold. The business model adopted by platform enterprises in the sharing economy, where services are provided free and subsidies are given to the platform's basic users, make it very hard for platform enterprises to produce notable turnover for a long period of time; therefore, the turnover threshold is unlikely to be satisfied in the context of concentrations. On the other hand, it is also not appropriate to apply the traditional methodology of constitutionality analysis and the SSNIP (Small but Significant and Non-Transitory Increase in Price) test to define the relevant market for the sharing economy, which is characterized by a two-sided market and cross-group network externalities. The size-of-transaction threshold reflects the importance of the number of basic users to the market power possessed by platform enterprise and has the same advantages of transparency and certainty. Therefore, legislation can be used to introduce the size-of-transaction threshold to Chinese control of concentrations between undertakings in addition to the traditional turnover threshold.     

The Chinese mafia: private protection in a socialist market economy

Gambetta's theoretical framework focuses on two important aspects directly relating to the birth and development of mafias, namely a demand for private protection and a supply of the same. In the Post-Mao era, China started its transition from a centrally controlled economy to a market-directed economy by adopting reform and opening-up policies. The widespread creation of property rights has exponentially enlarged the demand for protection. However, property rights are ambiguously defined in the Chinese legal system, and the state is unable and unwilling to provide efficient and sufficient law enforcement mechanisms for needy people because of the rampant corruption of government officials and the weak judicial system. In this case, the mafia that is interested in the private provision of protection developed into an alternative enforcement mechanism for ‘securing’ property rights in China's economic transition. The most important service offered by the mafia in China is not only to assist business enterprises in monopolising the market, but also to assist local government in China's economic reform.     

Government procurement law and hacking technology: The role of public contracting in regulating an invisible market

This article considers the purchasing of hacking technology by governments and the role of government procurement processes in regulating the hacking market and reducing risks to the buyer. While the proliferation of hacking technology for government actors has led to various proposed solutions for accountability, little consideration has been given to public purchasing of this technology. This article explores whether public contracting processes could be used to help minimize the risks that arise from the use of government hacking technology, and, if so, the types of contractual clauses and institutional supports that might be useful to achieve that goal. In exploring this issue, this article considers theories of government by contract and the publicization of the private sector. These theories posit that public contracting can be used as a vehicle to impose public considerations—for example, certain policy goals—on the private sector. It argues that requirements of transparency and accountability that inhere on the public sector could be transferred in part to the private sector through the vehicle of a public contract and explores how public contracts for government hacking technology could be structured in order to reduce risks posed by the use of this technology.     

The role of interest rates during the transition to a market economy

We construct a simple two period model of an economy in transition from being centrally planned to being market oriented. Using this model, we draw certain positive conclusions about economic policies that reduce distortions during the transition period. In particular, we focus on the role of interest rates, a market parameter that has previously been almost entirely ignored in planned economies. Using stylized data derived from Czechoslovakia, we show that increase in nominal interest rates can actually be welfare-improving by partially compensating for the distortions induced by the transition process. The model is sufficiently general to be applied to a number of transition economies, and we use the cases of Czechoslovakia, the USSR, and China as examples of some of the phenomena that we are trying to explain. We show that the model generates a constrained, suboptimal equilibrium. In particular, we see that raising interest rates during the transition period reduces repressed savings, brought about by shortages in the controlled market. An improvement in consumer utility can therefore be brought about.     

Cost-benefit analysis for global public–private partnerships: an evaluation of the desirability of intergovernmental organizations entering into public–private partnerships

This paper explains the use of cost-benefit analysis for the evaluation of global public–private partnerships that combine international intergovernmental organizations with national governments, businesses, and the non-profit organizations of civil society. The partnerships allocate resources to projects that are socially desirable from an international perspective, yet without the global partnerships will not be performed. Cost-benefit analysis can identify and compare the social and the private costs and benefits of the projects, thereby identifying cases where global public–private partnerships will provide socially desirable results when markets alone will not. Cost-benefit analysis can assess the necessity and the sufficiency of strategies proposed by the partnerships. The paper discusses modifications to cost-benefit analysis required for its use in evaluations of the global public–private partnerships, explaining the need for market-centered valuations, but also explaining the role of alternative social valuations.     

Justifications for the sharing of social science data

Starting with the premise that voluntary sharing of social science data is a desirable professional behavior, this article discusses a variety of justifications for data sharing. These justifications are found to be grounded in the scientific process itself—in the need for science that is more accurate, more open, more knowledgeable, and has more resources at its disposal. Although it is evident that the costs and benefits of data sharing are now unevenly distributed, and that primary researchers currently bear most of the burden and risks, it is argued that the adoption of a data-sharing norm in the social sciences would go a long way to remedy the imbalance. In this regard, the author supports the 1985 data-sharing recommendations put forth by the Committee on National Statistics.This article is based on a presentation at the annual meeting of the American Psychological Association, Washington, D.C., August 23, 1986.U.S. General Accounting Office. The views expressed in this article are the author's and do not necessarily represent the opinions or policies of the GAO.     

Public interest versus interest groups: a political economy analysis of allowance allocation under the EU emissions trading scheme

In a theoretical analysis, we use a common agency model to show that lobbying by energy-intensive sectors covered under an emissions trading scheme (ETS) shifts the regulatory burden of an economy-wide emission constraint to sectors outside the ETS. The emission tax on the latter becomes inefficiently high such that lobbying does not only induce burden shifting but also efficiency losses. A complementary empirical analysis for a cross section of German firms under the EU emissions trading scheme supports our theoretical result on the role of lobbying on allowance allocation.     

Grant's Application: it's time for a new approach to a "public interest" exclusion from patentability

This article reviews the recent IP Australia decision in Grant's Application [2004] APO 11 about an innovation patent for a way of protecting assets against a loss of ownership as a result of a legal liability. The significance of this decision was to expose the tortured reasoning necessary to exclude from patentability an invention that was arguably contrary to the "public interest". The article asserts that the effect of the decision revoking the patent was correct, but that the reasoning points to a need to reconsider the "public interest" limits on patentability. The article then considers the approach that should be adopted in formalising a "public interest" exemption from patentability that is practical and generally applicable.     

The simple economics of class action: private provision of club and public goods

This article uses economic categories to show how the reorganisation of civil procedure in the case of class action is not merely aimed at providing a more efficient litigation technology, as hierarchies (and company law) might do for other productive activities, but that it also serves to create a well defined economic organization ultimately aimed at producing a set of goods, first and foremost among which are justice and efficiency. Class action has the potential to recreate, in the judicial domain, the same effects that individual interests and motivations, governed by the perfect competition paradigm, bring to the market. Moreover, through economic analysis it is possible to rediscover not only the productive function of this legal machinery, but also that partial compensation of victims and large profits for the class counsel, far from being a side-effect, are actually a necessary condition for reallocation of the costs and risks associated with the legal action.