Regulatory Preferences Research Articles

Who Reaps the Benefits, Who Bears the Risks? Comparative Optimism, Comparative Utility, and Regulatory Preferences for Mobile Phone Technology

Although the issue of risk target (e.g., self, others, children) is widely acknowledged in risk perception research, its importance appears underappreciated. To date, most research has been satisfied with demonstrating comparative optimism, i.e., lower perceived risk for the self than others, and exploring its moderators, such as perceived controllability and personal exposure. Much less research has investigated how the issue of target may affect benefit perceptions or key outcomes such as stated preferences for hazard regulation. The current research investigated these issues using data from a public survey of attitudes toward mobile phone technology (N= 1,320). First, results demonstrated comparative optimism for this hazard, and also found moderating effects of both controllability and personal exposure. Second, there was evidence of comparative utility, i.e., users believed that the benefits from mobile phone technology are greater for the self than others. Third, and most important for policy, preferences for handset regulation were best predicted by perceptions of the risks to others but perceived benefits for the self. Results suggest a closer awareness of target can improve prediction of stated preferences for hazard regulation and that it would be profitable for future research to pay more attention to the issue of target for both risk and benefit perceptions.

Asymmetrical Regulation: Risk, Preemption, and the Floor/Ceiling Distinction

If the federal government has constitutional power to address a social ill, and hence has power under the Supremacy Clause to preempt state, local, and common law regimes, is there a principled rationale for distinguishing federal standard setting that sets a federal floor or ceiling? At first blush, the two appear to be mere flip sides of the same federal power, only distinguished by their different regulatory preferences for a world of minimized risk (with floors) or higher levels of risk (with ceilings). This Article argues, however, that these two central regulatory choices are fundamentally different. Floors embrace additional and more stringent state and common law action, while ceilings actually are better labeled a unitary federal due to how they preclude any more lax or more stringent action as well as the different actors, incentives, and modalities of information elicitation and proof of common law settings. Advocates of less hindered markets respond that this is precisely the idea-regulatory certainty is enhanced with ceiling preemption, allowing producers of goods to plan with confident knowledge of the regulatory terrain, unbuffeted by an array of uncoordinated actors. This debate was, until recently, largely hypothetical. Recently, however, in settings as diverse as product approvals, to of risks posed by chemical plants, to possible legislation regarding greenhouse gases contributing to climate change, legislators and regulators have suggested or asserted such a broad, preemptive impact. The federal action, whatever it is, would be the final regulatory choice. But under what theory of and legislation can one be confident that locating all decisionmaking power in one institution at one time will lead to appropriate standard setting? In fact, advocates of risk regulation, experimentalist regulation scholars, and, at the other end of spectrum, skeptics about the likelihood of public-regarding regulation, all call for attention to pervasive risks of regulatory failure. Agency and legislative inertia, information uncertainties and asymmetries, outdated information and actions, regulatory capture, and a host of other common regulatory risks create a substantial chance of poor or outdated regulatory choice. Considering these pervasive risks of regulatory failure, the principled distinctions between floor and ceiling preemption become apparent. Vesting all decisionmaking power in one institution can freeze regulatory developments. Unitary federal choice ceiling preemption is an institutional arrangement that threatens to produce poorly tailored and public choice distortions of the political process, whether it be before the legislature or a federal agency. Floor preemption, in contrast, constitutes a partial displacement of state choice in setting a minimum level of protection, but leaves room for other actors and additional regulatory action. Floors anticipate and benefit from the institutional diversity they permit. This Article closes by showing how the institutional diversity engendered by retaining multiple layers of law and regulatory actors creates conditions conducive to reassessment and adjustment of often rigid or outdated regulation.

A Policy Network Explanation of Biotechnology Policy Differences between the United States and Canada

Canada has a more restrictive biotechnology policy than the United States. Adopting a similar-cases-research-design, this article shows that policy networks explain this difference. The overlapping nature and the boundary between the multiple networks relevant to biotechnology in each country are distinct. In the United States, two policy networks deal with biotechnology. One primarily handles agricultural plants, while the other deals with food; key state actors overlap. In contrast, networks in Canada are separated between those dealing with regulation with two overlapping networks assessing environmental and health risks, and a network to manage biotechnology promotion. Promotion and regulation thus constitute a network boundary in Canada, but not in the United States, where networks deal with these two issues simultaneously. American networks have promoted beliefs favourable to more permissive regulatory preferences than the Canadian environmental and health risk assessment networks and American biotechnology policies are therefore even more permissive than those of Canada.

Parochialism and Pluralism in Cyberspace Regulation

I predicted a few years ago that the greater connectedness brought about by globalization in general, and technology in particular, would introduce a new humility into our jurisdictional attitudes. Jurisdictional and choice-of-law rules premised on hermetically sealed sovereignty, where governments had exclusive power over their citizens and territory, did not fit a world in which the power and influence of governments extended beyond their borders and collided with conflicting legal norms within their borders. Connectedness, I concluded, would inevitably produce a new sensitivity in conflict of laws to the multiple sources of power and authority with which people must contend in a wired world. Professors Berman and Reidenberg, while sympathetic with that perspective, have here suggested an appropriate caveat: technology can both connect and separate, and globalization can turn governments both outward toward cooperation and inward toward isolation. Connectedness can make us xenophobic as well as cosmopolitan. Thus, Professor Reidenberg discusses how technology enables states to exercise control over multistate electronic transactions in order to enforce their own, legitimate regulatory preferences. He is generally sympathetic to such assertions of national authority and rejects the plea of “Internet separatists” for governments to leave cyberspace alone.

The Structure of Regulatory Competition: Corporations and Public Policies in a Global Economy

The Structure of Regulatory Competition: Corporations and Public Policies in a Global Economy. By Dale D. Murphy. New York: Oxford University Press, 2004. 336p. $99.00.Dale Murphy addresses the study of globalization, specifically global regulatory competition, with the careful empirical work of a former banker and the analytical bite of a political science scholar. The result is a coherent theoretical statement about when, and under what conditions, states will dismantle regulations (the colloquial “race to the bottom,” or “competition-in-laxity” as Murphy labels it), harmonize them to the highest level (a trend David Vogel named the “California effect”), or allow heterogeneous regulations to prevail. What sets Murphy's book apart from other political science scholarship in this area is that he abandons the assumption that corporations have monolithic regulatory preferences, and instead unpacks the “black box” of the corporation. He then gives corporate preferences weight in the regulatory process. Thus, the motivations and preferences of corporations are significant drivers of a state's regulations, and determine whether regulations will be harmonized upward or downward in international regulatory competition: “Powerful firms exert influence but they do not seek a monotonic goal; one must identify each firm's different interests. Over time, these preferences will shape state regulations” (p. 9).

Who needs a review of the financial system in Australia? the case of the Wallis inquiry

The Howard government reoriented the then existing institutionally based financial regulation towards a functionally based regime with new prudential and disclosure regulators in 1998. This paper uses the governmental agenda-setting framework of John Kingdon to explain this financial regulatory change undertaken in Australia following the Wallis Inquiry of 1996. It also examines the role of the Inquiry in the policy process. It shows that the financial regulatory change was on the bureaucratic agenda of the Treasury Department. A window of opportunity opened for the Treasury following the 1996 election, with the new Howard government keen to achieve financial regulatory reforms to address future regulatory challenges proactively while the new Treasurer Peter Costello wanted to consolidate his power within markets and politics. Costello coupled the Treasury's solutions to problems and to political processes. The Wallis Committee was ‘packed’ by the government in accordance with its regulatory policy preferences. Its role was to legitimise the government's policy preferences publicly, and to transfer the ‘governmental agenda’ into the ‘public agenda’. However, this was not a case of the government pressuring for its policy preferences over the financial services industry. In fact, the Inquiry was used as a venue to generate industry and public support for the regulatory changes, and was used to build a network of alliances within and outside the parliament.

Smoke-free cafe in an unregulated European city: highly welcomed and economically successful

Objective: In a unique setting with two identical cafes, which only differed in their smoking ordinances, this study assessed the influence of smoking policies on the choice of the cafe,...

Sample size re-estimation: recent developments and practical considerations.

Interim findings of a clinical trial often will be useful for increasing the sample size if necessary to provide the required power against the null hypothesis when the alternative hypothesis is true. Strategies for carrying out the interim examination that have been described over the past several years include "internal pilot studies", blinded interim sample size adjustment and conditional power. Simulation studies show that the alternative methods generally control the type I error rate satisfactorily, although the power properties are more variable. The important issues associated with sample size re-estimation are strategic, not numeric. Clearly expressed regulatory preferences suggest that methods not requiring unblinding the data before completion of the trial would be most appropriate. Extending a trial has its risks. The investigators/patients enrolled later in the course of a trial are not necessarily the same as those recruited/entered early. Re-activating the enrollment process may be sufficiently complicated and expensive to justify enrolling more investigators/patients at the outset. Since sample size re-estimation adjusts the sample size on the basis of variability while efficacy interim analysis adjusts the sample size based on the basis of estimated effect size, both principles can be used in the same trial. Sample size re-estimation may not be advisable for trials involving extended follow-up of individual patients or, more generally, when the follow-up time is long relative to the recruitment time. In such cases, it may be better to estimate the sample size conservatively and introduce an interim efficacy evaluation.

Sufficient Grounds for Optimism?: The Relationship Between Perceived Controllability and Optimistic Bias

Evidence that perceived controllability is associated with optimistic bias is reviewed. There is sufficient evidence that people are optimistically biased about negative events they perceive to be controllable. More work is needed to establish whether this is also true of positive events. There is evidence also that people often hold beliefs of their personal superiority on control-related dimensions. More experimental studies testing hypotheses about the mechanisms linking perceived control and optimistic bias are required. Future work should also expand the sophistication with which control is treated conceptually and empirically and the range of potential mechanisms examined.

Local choice and wastewater treatment plant performance

Wastewater treatment plant effluent can be a major contributor to water pollution in the United States, yet we know little about how actual effluent quality is determined. Although Federal government regulations specify uniform minimum treatment levels for these plants, actual treatment levels vary considerably from this standard. In addition, there is evidence of substantial excess capacity at treatment plants. This paper examines the economic and technical relations between actual operating and design characteristics of plants. We specify and test among alternative models of what determines actual plant performance relative to design performance, including one in which plants have the incentive to “overinvest” and operate with permanent excess capacity due to large Federal subsidies on capital costs. The paper then explores the determinants of actual effluent quality using a supply and demand model in which effluent quality is fully endogenous, allowing treatment levels to be a function of both the costs of control, water quality characteristics, and other regional or regulatory preferences for control. Finally, the model with fully endogenous effluent quality is compared to one in which actual levels of plant effluent quality are technologically determined by the design characteristics of the plant and the exogenous properties of the incoming waste stream.

Ideological Patterns in the Justices' Voting in the Burger Court's Business Cases

Recent research has shown that economic liberalism no longer explains the Burger Court's business decisions. To discover what does, Hagle and Spaeth (1992) systematically analyzed the universe of Burger Court business decisions and found that a small set of ideological variables, which they labeled "instrumental libertarianism" accounted for most of these decisions. To supplement our 1992 study, we have constructed optimal models for the 10 most frequently participating Burger Court justices. These vary little from that of the Court. The three most antibusiness justices support governmental regulation, as do the two probusiness states' righters. Three justices are libertarians, one is a national supremacist, and one displays no distinctive behavior on any of our independent variables. In support of their regulatory preferences, the individual justices display varying support for agency action and judicial activism/restraint.

The supply and demand for pollution control: Evidence from wastewater treatment

This paper analyzes the determination of pollution control from wastewater treatment plants as an economic decision facing local or regional regulators. Pollution control is measured by plant design effluent concentration levels and is fully endogenous in a supply- and-demand model of treatment choice. On the supply side, plant costs are a function of the design treatment level of the plant, and on the demand side, treatment level is a function of both the costs of control and the regional or regulatory preferences for control. We find evidence that the economic model of effluent choice by local regulators has a good deal of explanatory power. We find evidence that wastewater treatment plant removal of biological oxygen demand (BOD) is sensitive to many local factors including the size of the treatment plant, the flow rate of the receiving water, the population density of the surrounding area, regional growth, state sensitivity to environmental issues, state income, and the extent to which the damages from pollution fall on other states. We find strong evidence that regulators are sensitive to capital costs in determining the design level of BOD effluent reduction at a plant. Thus, proposed reductions in federal subsidies for wastewater treatment plant construction are likely to have significant adverse effects on water quality.

Regulatory Preferences and Two-Part Tariffs: The Case of Electricity

The purpose of this paper is to develop and demonstrate a method for deriving and testing regulatory preferences within and across customer classes, and to assess the impact of these preferences on price structures and regulatory effectiveness in the electric utility industry. The method extends a technique described in both Nelson and Ross for uncovering interclass preferences in a uniform price framework [24; 33; 34]. By employing a two-part tariff framework, the extension enables the derivation of both interclass and intraclass preferences. Intraclass preferences can be derived in a two-part tariff framework because regulators can discriminate not only between customer classes, as with uniform prices, but also within a customer class. Two-part tariffs are also introduced because actual price structures in the electric utility industry are better approximated by two-part tariffs than by uniform prices.' Models of optimal two-part tariffs, particularly those of Schmalensee, and Sherman and Visscher, are extended to allow regulatory preferences to vary across and within heterogeneous customer classes [36; 37; 13; 27; 11; 25; 19; 18; 22].2 These variable preferences are incorporated into a weighted social surplus function which regulators are assumed to maximize. Given this model of regulatory behavior, preference weights can be derived for the electric utility industry with information on the markups of both per-unit prices over marginal costs of kWh output and fixed charges over the marginal costs of customer connection, and on output and connection demand elasticities.

The Geographic Distribution Of Governmental Powers: The Case Of Regulation

A crucial characteristic of federal systems is the distribution of regulatory power between the states and the national government. Four factors affect the distribution of powers in the U.S.: the geographic scope of issues, institutional competence at state and national levels, protection of democratic values, and economies of administration. Local or scattered occurrences of a problem, national governmental rigidity, desire for extensive public participation, spatial variation in regulatory preferences, and diseconomies of scale in administration favor state regulation. Widespread occurrences or national significance of a problem, state governmental rigidity, spillover effects, abhorrent local preferences, and economies of scale in administration favor national regulation.