Regulatory economics and its discontents: some theoretical and historical observations

Abstract

Purpose – The purpose of this paper is to demonstrate that the impulse to dismantle the US regulatory apparatus in major industries, including telecommunications, had less to do with genuine advances in economic analysis and the formulation of public policy than with the pursuit of particular political and professional agendas.Design/methodology/approach – Through the perusal of archival evidence and narrative information gleaned from newspapers, official chronicles, and secondary historical literature, the research propositions of the paper are developed and argued.Findings – The rise and fall of regulatory economics in the US was the result of the historical evolution of both mainstream economic theory and of the economics profession during the twentieth century. With the coming of the Great Depression and the Second World War and during a large part of the Cold War era that followed, American economists embraced the idea that genuine welfare gains could be won from the direct regulation of markets in c...