Regulating Vertically Integrated Utilities When Transfers are Costly but Revenues are Beneficial

This paper considers regulating a vertically integratedutility under asymmetric information about efficiency gainsdue to integration. The benchmark case – benevolentregulation – implies a divestiture of a technically efficientintegration, unless the cost savings due to integrating aresubstantial. This highlights how private information causes adeviation from the standard perfect information framework.This result is at odds with the worldwide experience withpublic utilities that remained integrated almost throughoutthe 20th century despite that integration offered meager or nosavings as now becomes evident. Of course, this divergencebetween normative analysis and facts is no surprise for publicchoice. Indeed, a rather mild kind of a Leviathan motive –regulators dislike transfers to the utility, and by symmetry,like revenues – coupled with the `secrecy' only integrationoffers due to private information explains why a regulator hasan interest to keep even economically inefficiently integratedfirms integrated. This is in line with Crew and Rowley (1988)that public regulation serves to `milk' rather than to imposeefficiency.     

Public Members on Medical Licensing Boards and the Choice of Entry Barriers

This paper investigates the impact of medical and consumerinterests on the choice of physician licensing requirements inthe United States. Using data on licensing requirements in thefifty states between 1986 and 1993, we find that, in general,public members on licensing boards are associated withlicensing requirements that have educational justification. Incontrast, medical interests, measured in terms of licensingboard independence and campaign contributions by medicalassociations, are associated with licensing requirements thatare more difficult to justify with educational criteria.     

Governance, Management, and Performance: They Matter

Books reviewed in this article:
Carolyn J. Heinrich and Laurence E. Lynn, Jr., eds., Governance and Performance: New Perspectives
Patricia W. Ingraham, Philip G. Joyce, and Amy Kneedler Donahue, Government Performance: Why Management Matters
Janet M. Kelly and William C. Rivenbark, Performance Budgeting for State and Local Government     

Ethnicity,decentralisation and the fissile state in Georgia

This article addresses the problems entailed in decentralising a successor state of the former Soviet Union. On many different scales, Georgia should be a wealthy country. The population is well educated, there is rich agricultural land, a thriving wine industry, several mineral extraction industries and access to oil. The central argument of this article is that it is governance, or rather the failure of governance that is at the heart of many of Georgia's problems—in particular, a failure over a number of years to find a balance between the considerable ethnic diversity of the country and their aspirations regarding self‐government, and the need for the assertion of central power from Tblisi in occupying the power vacuum left by the demise of the Soviet Union. The structure of the article moves through an analysis of the context of decentralisation, into a brief survey of the major ethnic groups and the nature of the local government system, paying particular attention to the attempts by Tblisi to provide a coherent glue for a state that is liable to break apart. The concept of the ‘fissile state’ is used to convey this brittle context within which institutional reform needs to take place given the pressures from below and the pressures exerted by external actors as Georgia seeks to move closer to the European polity. Copyright © 2004 John Wiley & Sons, Ltd.     

Austria

European Journal of Political Research -     

Taking the Keys from Grandpa

Recent highly publicized traffic accidents involving older drivers have led to renewed interest in state policies and administrative practices that award and renew drivers’ licenses in the American states. Because the probability of traffic accidents is linked to the medical conditions that are more prevalent among the elderly, and because the number of older drivers is expected to rise over the next several decades, one might expect that this will be an increasingly important policy issue. This article discusses variations that are observed across states in law and administrative practice. A longitudinal analysis of data on crashes involving elderly drivers in fifteen states indicates that crash rates are directly related to the length of the renewal cycle for older drivers and inversely related to the stringency of testing at renewal. It is also likely that states requiring physicians to report conditions that would impair driving will experience lower crash rates. A secondary analysis of policy impacts on the licensing rates is not conclusive, a finding that is attributable to inaccuracies in the reported numbers of licensed drivers.