Breyer's Regulation and Its Reform

Abstract

comprehensiveness of both the analysis and the prescription. Beginning with a survey and classification of the various contexts in which regulation is or is seen to be called for-a taxonomy that provides the framework for the entire study-, Breyer then devotes six chapters to a description and appraisal of the six principal regulatory methods-classical cost-of-service ratemaking, historically based price regulation, allocation under a public interest standard, standard setting, historically based allocation, and individualized screening. He next considers various alternatives to classical regulation, and then proceeds to a chapter-by-chapter exposition of three regulatory mismatches-instances in which the wrong regulatory solution was adopted for the particular problem perceived; one partial mismatch; one possible match; and the strategy and process, in which he participated actively, of correcting one of those mismatches-the adoption of classical regulation to handle a perceived problem of excessive competition among airlines. Finally, he wraps up the entire analysis in an excellent concluding chapter, Generic Approaches to Regulatory Reform. A table in a middle chapter, 10, provides an illuminating summary of the approachthe organization of the entire exposition and the framework for diagnosis and prescription: