Economic Theory Of Regulation Research Articles

Adoption of Different Housing Models to Access Housing by Households in Nairobi County

Purpose: This study aimed to evaluate adoption of different housing models to access housing by households in Nairobi County.
 Methodology: Employing a descriptive research design, the study investigates the impact of housing regulations on housing access through mortgage and cooperative models. The research sample comprises 385 households, CEOs of housing financing organizations, and government officers.
 Findings: The study reveals that adoption of housing model is shaped by diverse factors. The residency duration reflects both long-term and newer residents, highlighting the dynamic interplay of urban growth and migration. Notably, 35.0% of respondents have lived in their current houses for "4 - 6 years," emphasizing housing stability. The prevalent adoption of the Incremental (34.4%) and Cooperative Models (33.4%), alongside 41.4% awareness of the Mortgage Model, signifies residents' adaptability in navigating financial avenues for homeownership. Challenges like high construction costs persist, with 80% of Nairobi's population residing in informal settlements and slums. Strengthening regulatory frameworks is crucial, and policymakers should address financial barriers. This study provides insights for creating an inclusive and sustainable housing environment, essential for the 59.2% of renters expressing aspirations to transition into homeownership in Nairobi County. In conclusion, the housing landscape in Nairobi County, particularly Ruai Sub-County, reflects a mix of long-term and newer residents, emphasizing housing stability. The prevalent adoption of Incremental and Cooperative Models, along with awareness of the Mortgage Model, indicates residents' adaptability in pursuing homeownership.
 Unique Contribution to Theory, Practice and Policy: Utilizing the Public Interest Economic Regulation Theory (PIERT), the Q Theory of Housing Investment, and the Theory of Distributive Justice, the research explores the interplay between government regulations, market forces, and social equity in the context of affordable housing. To address challenges, policymakers should strengthen regulatory frameworks, enhance financial policies, and promote diverse housing models. Public awareness campaigns are vital. Recommendations include tailored financial products and inclusive strategies to meet the varied needs of the population. These measures aim to create an enabling environment for accessible and sustainable housing in Nairobi County, benefiting both existing and aspiring homeowners.

Challenges Hampering Adoption of Different Housing Models to Access Housing by Households in Nairobi County

Purpose: This study aimed to assess the challenges hindering the adoption of diverse housing models for household access to housing in Nairobi County, Kenya. Utilizing the Public Interest Economic Regulation Theory (PIERT), the Q Theory of Housing Investment, and the Theory of Distributive Justice, the research explores the interplay between government regulations, market forces, and social equity in the context of affordable housing.
 Methodology: Employing a descriptive research design, the study investigates the impact of housing regulations on housing access through mortgage and cooperative models. The research sample comprises 385 households, CEOs of housing financing organizations, and government officers. By analyzing the usage prevalence of housing models, the study delves into challenges such as high-interest rates, limited mortgage financing access, and insufficient awareness about housing options. The research employs a nuanced approach, considering the competitive dynamics within the housing sector and the need for equitable resource distribution.
 Findings: The study reveals that the mortgage model is most prevalent (41.4%), followed by the incremental model (28.0%) and cooperative model (23.7%). High-interest rates, restricted mortgage financing access, and inadequate awareness about housing options emerge as significant challenges hampering housing model adoption. Additionally, housing regulations, vital for safety, impact affordability, with 39.2% of respondents acknowledging this influence. 
 Unique Contribution to Theory, Practice and Policy: This study contributes valuable insights to the existing body of knowledge by synthesizing the PIER, Q Theory of Housing Investment, and Theory of Distributive Justice. The study therefore validates these theories by offering a comprehensive understanding of the intricate interplay between regulations, market dynamics, and social equity in the adoption of affordable housing models. The recommendations, including lowering mortgage interest rates, enhancing financing access, promoting awareness about housing models, and fostering collaborative efforts among stakeholders, provide actionable strategies for policymakers, practitioners, and researchers to improve housing access in Nairobi County.

An evaluation of the Australian Community Pharmacy Agreement from a public policy perspective: industry policy cloaked as health policy?

BackgroundA series of Community Pharmacy Agreements (Agreements) between the Federal government and a pharmacy-owners’ body, the Pharmacy Guild of Australia (PGA) have been influential policy in Australian community pharmacy (CP) since 1990. While ostensibly to support the public’s access and use of medicines, the core elements of the Agreements have been remuneration for dispensing and rules that limit the establishment of new pharmacies. Criticism has focused on the self-interest of pharmacy owners, the exclusion of other pharmacy stakeholders from the Agreement negotiations, the lack of transparency, and the impact on competition. The objective of this paper is to determine the true nature of the policy by examining the evolution of the CPA from a policy theory perspective.MethodsA qualitative evaluation of all seven Agreement documents and their impact was undertaken using policy theories including a linear policy development model, Multiple Streams Framework, Incremental Theory, the Advocacy Coalition Framework, the Theory of Economic Regulation, the Punctuated Equilibrium Framework, and Elite Theory. The Agreements were evaluated using four lenses: their objectives, evidentiary base, stakeholders and beneficiaries.ResultsThe PGA has acted as an elite organisation with long-standing influence on the policy’s development and implementation. Notable has been the failure of other pharmacy stakeholders to establish broad-based advocacy coalitions in order to influence the Agreements. The incremental changes negotiated every 5 years to the core elements of the Agreements have supported the publics’ access to medication, provided stability for the government, and security for existing pharmacy owners. Their impact on the evolution of pharmacists’ scope of practice and through that, on the public’s safe and appropriate use of medication, has been less clear.ConclusionsThe Agreements can be characterised predominantly as industry policy benefiting pharmacy owners, rather than health policy. An emerging issue is whether incremental change will continue to be an adequate policy response to the social, political, and technological changes that are affecting health care, or whether policy disruption is likely to arise.

FOUNDATIONS OF CONTEMPORARY ECONOMICS: GEORGE STIGLER AND THE CHICAGO SCHOOL OF ECONOMICS – ON PRICE THEORY AND INFORMATION ECONOMICS

George Josef Stigler is known as the scientist who strongly influenced the formation of the Chicago School of Economics. He promoted the idea of expanding price theory beyond the boundaries of economics and developed it into a universal model for the analysis of human behaviour, known as the economic approach to human behaviour. His research inspired the Public Choice literature and the Economic Theory of Law. Besides, Stigler made numerous contributions which nowadays are integral parts of economic theory. In this essay we summarize some of Stigler’s outstanding contributions, particularly his work on information economics and the economic theory of regulation.

George stigler’s theory of economic regulation at 50 - introduction to a special issue

Since its publication in 1971, George J. Stigler’s “Theory of Economic Regulation” (1971), secured its place as the dominant theory of the causes and consequences of regulation in economics. The article was cited by the economic Nobel prize committee as one of the reasons Stigler received the prize in 1982. In his article, Stigler (1971) frames the conversation regarding the “Theory of Economic Regulation” around an analysis of the political demand for and supply of regulation. Following the 50th anniversary of the 1971 paper, the contributors to this special issue evaluate the impact of his “Theory of Economic Regulation”, apply it to other policy questions, and summarize the literature produced in response to his original insight.

“The theory of economic regulation” after 50 years

“The theory of economic regulation” after 50 years

Fintech Credit in Kenya: The Case for Strategic Regulation

The study sought to present the case for strategic regulation in the Fintech Sector, specifically in digital credit, with reference to Kenya. This was based on the concern that the proposed regulation on Fintech Credit by the Kenyan Parliament and the Government of Kenya does not factor in the sustainability aspects of Fintech Credit businesses. The study is anchored on the Public Interest Theory, the Private Interest Theory, and the Economic Theory of Regulation. The study adopted desk research, which depended on the review and examination of primary data sources such as legislation, government policy documents, acts of parliament, and reports. The study sought to achieve its objectives by evaluating the current laws and regulations affecting mobile lending in Kenya. It then relied on a comparison with two jurisdictions, specifically India and USA, where one has an existing mobile lending regulatory framework, and the other has a general regulatory framework respectively. It was established that the proposed regulations have a bias toward consumer protection and do not focus on business sustainability. The study, therefore, concluded that one single regulatory framework or laws will be insufficient for a sector where the laws in place will always be one step behind innovation in Fintech credit, and observed the need for a strategic approach to the regulation of Fintech credit in Kenya. It was recommended that, Fintech credit regulation in Kenya ought to incorporate a degree of flexibility. This flexibility is envisaged by Regtech, which takes care of new product-specific regulations. Secondly, regulators in Kenya should engage in Fintech Credit promotion by creating regulatory sandboxes. Sandboxes allow innovators to test their concepts in a deregulated environment that the rest of the market does not enjoy.

MASs, alliance and performance: an evidence of SOX effects

PurposeTo maintain auditor independence, Section 201 of the Sarbanes–Oxley Act of 2002 (SOX) imposes restrictions on audit firms in rendering management advisory services (MASs) to audit clients. Responding to the requirement, audit firms establish a strategic alliance with consulting companies to expand their scope of services to alleviate the impairment of auditor independence. Taiwan follows the spirit of SOX in related laws and regulations. To investigate the effects of SOX on Taiwanese auditing industry, this study aims to examine the relationship between MASs and operating performance of audit firms.Design/methodology/approachThis study obtains empirical data from the 1989–2017 Survey Report of Audit Firms in Taiwan, published by the Financial Supervisory Commission (FSC). FSC administers the survey across all registered audit firms annually to collect business information on the auditing industry for macro-economic analysis and industrial policy development. The authors group audit firms into three categories: national, regional and local firms. Based on the structure-conduct-performance (S-C-P) theoretical framework, this study establishes the following cross-sectional regression equation to test the authors’ hypotheses.FindingsMain results indicate that national firms have better post-SOX firm and alliance performance. Both firm and alliance MASs contribute more to the performance of national firms after SOX.Practical implicationsThis study claims that national firms establish alliance with consulting companies for resource sharing but regional and local firms for tax-saving.Originality/valueConsistent with the economic theory of regulation and resource-based theory, SOX matters in Taiwan.

Modelling regulatory capture in the port sector: A case study in the Philippines

Public service sectors have been a common topic for the study of the theory of economic regulation due to the natural monopolistic tendencies they pose. The study attempts to model regulatory capture by examining the impact of regulation and corruption on efficiency in one of these public service sectors, the port sector. The empirical analysis focuses on the port sector of the Philippines and its central port authority, the Philippine Ports Authority. Employing a regression analysis on a limited time series dataset from 1990 to 2018, we show that, while controlling for relevant factors, corruption has significant negative influence on port efficiency.

Governance of financial management and regulation-based fiscal accountability

This study aims to analyze financial accountability based on the regulation as a moderating effect of fiscal decentralization on fraud rates in local government financial management. Regulatory accountability consists of financial reporting accountability, accountability of the government internal control system, accountability compliance with legislation and accountability follow-up to audit results. This research is an empirical research with a purposive sampling technique in collecting data. The data used in this study is secondary data with a sample of 412 regency and city governments in Indonesia, during 2011–2014. Data processing used WarpPLS statistic software. The results show empirical evidence that fiscal decentralization has a positive effect on fraud rates in regional financial management. Accountability, financial reporting and accountability compliance with legislation are empirically proven as moderating the effects of fiscal decentralization on fraud rates in regional financial management. In addition, the results of this study also show that the low level of accountability of the internal control system and accountability does not continue the results of the examination so it cannot moderate the effect of fiscal decentralization on fraud rates in regional financial management. The results of this study have implications for strengthening agency theory, institutional theory, economic regulation theory and fraud triangle theory. The results of this study also have practical implications for the role of accountability through the formulation of regulations related to sanctions and rewards for local governments to carry out good governance through increasing their financial accountability. In addition, the regional government is expected to pay attention to audit recommendations so that it can reduce fraud rates in regional financial management.

The economic theory of regulation and inequality

The economic theory of regulation and inequality

George J. Stigler’s theory of economic regulation, bootleggers, baptists and the rebirth of the public interest imperative

George J. Stigler’s theory of economic regulation, bootleggers, baptists and the rebirth of the public interest imperative

Stigler's Theory of Economic Regulation After Fifty Years

George Stigler’s “The Theory of Economic Regulation” (1971) is a landmark in the economics of regulation. It used simple public choice reasoning to set out the “capture theory” of regulation whereby “… as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.” This article, written for a commemoration of the 1971 article in Public Choice, summarizes the context within which the article appeared and evaluate its long run impact. A central argument is the need to distinguish “acquired” from “designed and operated.” The rule that regulation is produced in response to industry pressure seems honored mainly in the breach. Maintenance of the institutional status quo seems the more common industry goal. However, once the status quo is altered, the industry interest will, as Stigler argued, receive disproportionate weight. I discuss and analyze the varying impact of industry interests over three significant regulatory transitions – in transportation, pharmaceuticals and banking. I conclude that the durable impact of Stigler (1971) comes from the public choice framing and the consequent importance of organized interests to analysis of regulation.

The economics and accounting for COVID-19 wage subsidy and other government grants

Purpose This paper aims to examine the economic rationale for the COVID-19 wage subsidy and grants related to assets and the accounting for these wealth transfers under NZ IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. The principal contribution is presenting an economics–accounting nexus for government assistance to firms during a pandemic and for the nation’s economic development. Design/methodology/approach This is a descriptive study that draws on the economic theory of regulation to understand the rationale for wealth transfers, then examining the accounting for the wealth transfers by analyzing the financial statements of NZX 50 companies that received the wage subsidy and SkyCity and Chorus that received substantial grants to develop and operate the New Zealand International Convention Centre and building a large part of New Zealand’s Ultra-Fast Broadband fiber optic network, respectively. Findings First, the 10 NZX 50 companies that received the government’s wage subsidy were justified to receive it from the legal, ethical and moral perspectives. However, some non-NZX 50 companies, while legally entitled to the wage subsidy, took advantage of the wealth transfer when they were profitable and paid dividends. This latter group of companies was not seen as behaving ethically and morally. Second, the government granted millions of dollars to SkyCity and Chorus for building critical infrastructures that are economically beneficial for the nation and that are unlikely to attract private investment, and these companies accounted for the grants related to assets in accordance with NZ IAS 20. Research limitations/implications The financial statement impacts of the wage subsidy are based on a subset of NZX 50 companies with available information at the time of writing. However, they do not compromise the external validity of the findings because the wage subsidy applies to all businesses. Similarly, the manner in which SkyCity and Chorus accounted for the grants related to assets would apply equally to any entity that is a recipient of such a grant. Originality/value This paper presents an economic understanding for the existence of government grants and how the accounting mirrors the economic rationale for the “grants related to income” and “grants related to assets.” This paper demonstrates the importance of the economics–accounting nexus.

THE QUESTION OF THE MINIMUM LUGGAGE ALLOWANCE IN THE BRAZILIAN AIR TRANSPORT UNDER THE PERSPECTIVE OF THE ECONOMIC REGULATION THEORY

The present work aims to investigate the regulation of luggage allowance in the Brazilian civil aviation sector based on the Economic Regulation Theory proposed by George Stigler. This is a bibliographic study, with emphasis on Brazilian and foreign doctrines on the economic regulation theory as well as on the regulation of the air transport sector. The method used was predominantly deductive, starting from general analyses on the economic regulation theory and the air transport sector to the applicability of the Economic Regulation Theory into Resolution 400/2017. In conclusion, we understand that, contrary to what has become popular, the end of the regulation for luggage allowances in Brazil, as a measure of economic liberalization, benefits the airline industry as a whole, favoring competition, consequently, consumers. Key words: Economic Regulation Theory; Civil Aviation; Luggage allowance.

Competition and Sustainability: Evidence from Professional Service Organization

Two professional service organizations, an auditor and a tax agent, provide services to the same target clients. Taiwan established a new regulatory system for tax agents in 2004, which directly enhances their ability to compete with auditors. From the perspective of the economic theory of regulation, this study investigates the indirect effects of the new regulatory system on the business of auditors. We focus on auditors in proprietorship audit firms and divide the sample period into before and after 2004. This study establishes a cross-sectional regression equation to test our hypotheses. We classify the types of business into three levels, total amount, three categories and six individual items. Based on the 1989–2017 Survey Report of Audit Firms in Taiwan, we find that auditors perform better after 2004, indicating that increased competition leads to positive sustainability for auditors. Further results show that the effects of the regulation on auditors’ performance are greater after 2004, additional evidence of the positive indirect effect on auditors. This study contributes to the literature, provides public policy implications to regulators and contributes managerial information to auditors.

Measuring and Comparing the Regulatory Welfare State: Social Objectives in Public Procurement

This article constructs an index that translates the substance of policy documents into numeric values across three dimensions of regulation—a qualitative assessment of policy substance, its potential impact, and enforcement of regulation—which aims to capture the strength of social objectives in the economy. It draws on theories of economic regulation and literature on the welfare state to develop a general understanding of social objectives. The use of the index is illustrated through public procurement regulation in two European countries (France and Germany) and shows an overall increase in the strength of social objectives. It also highlights systematic differences in country priorities in the regulation of their economy. The index demonstrates that social regulation can be measured and compared in a meaningful way within and across countries.

Market regulation between economic and ecological values: Regulatory authorities and dilemmas of responsiveness

The regulation of markets emerged as one of the core pillars of government policies during the 1990s. However, the ascendance of ecological values and issues, such as sustainability and security in the following decades challenge some of the basic tenets of the underlying neo-liberal ideas. We argue in this paper that market and competition regulators have come under pressures to uphold the market and economic values of the prevailing anti-trust policies while being responsive to societal pressures that cherish non-economic values. Competition authorities find themselves locked-in to economic theories of regulation and find little room for engaging with ecological issues. We illustrate this with the case of the Dutch competition authority's approach to managing the balance between economic and sustainability and animal welfare values.

Controlling insider dealing through criminal enforcement in China

PurposeThe purpose of this paper is to review the criminal enforcement of insider dealing cases in People's Republic of China's (PRC) securities market and to provide feasible suggestions for improvement for a more coherent and streamlined insider dealing regulatory framework in the PRC during the enforcement of China's new Securities Law (SL 2020) in March 2020.Design/methodology/approachThrough analysing the previous literature on public interest theories and economic theories of regulation, this paper examines the necessity to regulate insider dealing in China with criminal law to ensure fairness and avoid monopolies in its securities market. The paper reviews the criminalising of severe insider dealing cases in China from the Nanking National Government in the 1920s to the inception of the securities market of the PRC in the 1990s to the present day. The investigation, prosecution, enforcement and trial of criminal offences of insider dealing in China are thoroughly examined.FindingsThe paper finds a tendency for over reliance on the investigation and the administrative judgement of the China Securities Regulatory Commission in criminal investigation, prosecution and trial in the PRC.Originality/valueTo the best of the authors’ knowledge, this paper is one of the first papers to critically and thoroughly analyse the criminal enforcement of insider dealing in China following the recent enforcement of China’s new Securities Law in March 2020.

DEA window analysis and Malmquist index to assess efficiency and productivity in the Spanish electricity sector

PurposeThe purpose of this paper is to demonstrate that overcapacity and tariff deficit (external constraints) negatively affect the efficiency of distribution firms in the Spanish electricity sector. To do this, the paper is based on the theory of constraints and theory of economic regulation.Design/methodology/approachData envelopment analysis (DEA) window methodology is carried out on the constant scales (I-C) with a sample consisting of five main distribution firms during the period from 2006 to 2015. In turn, an analysis of the Malmquist index is carried out to assess whether it has had a displacement with respect to the efficiency frontier.FindingsThe results show that the overcapacity and the tariff deficit negatively affect the efficiency of the distribution firms of the Spanish electricity sector. In addition, there is an existence of external constraints that affect the activities of regulated organisations and the importance of adequate legislation in regulated sectors.Originality/valueThis study defines a model that shows how the efficiency problems associated with electricity distribution companies such as productive overcapacity or tariff deficit can be measured based on the theory of constraints and theory of economic regulation.