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Posts Tagged ‘regulation’

The Tragedy of the Commons and the Myth of a Private Property Solution

November 1st, 2013 humas No comments

By: Amy Sinden, Temple University – James E. Beasley School of Law, April 7, 2006

Solusinya ?

The central question of environmental law is “how much?” How much pollution should we emit into the air and water? How much resource exploitation should we engage in? While for other “how much” questions our society tends to rely (at least in theory) on the market, when it comes to environmental harms, the tragedy of the commons frequently causes the market to fail – that is, to get the “how much” question wrong.

According to generally accepted wisdom, there are two potential solutions to the tragedy of the commons:

  1. government regulation, or
  2. privatization.

When the U.S. environmental movement began in the 1970s, government regulation seemed the obvious choice. But in recent years, intellectual fashions have changed, and privatization has become the preferred solution. The privatization solution, however, is a myth that exists, if at all, only in a world of theory.

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Transaction Cost Regulation

June 14th, 2011 humas 2 comments

Sumber: NBER.org

This paper discusses the fundamental underpinnings and some implications of transaction cost regulation (TCR), a framework to analyze the interaction between governments and investors fundamentally, but not exclusively, in utility industries.

TCR sees regulation as the governance structure of these interactions, and thus, as in standard transaction cost economics, it places emphasis in understanding the nature of the hazards inherent to these interactions.

The emphasis on transactional hazards requires a microanalytical perspective, where performance assessment is undertaken within the realm of possible institutional alternative. In that sense, politics becomes fundamental to understanding regulation as the governance of public / private interactions.

The paper discusses two fundamental hazards and their organizational implications: governmental and third party opportunism. Both interact to make regulatory processes and outcomes more rigid, formalistic, and prone to conflict than envisioned by relational contracting.

Download: Transaction Cost Regulation, oleh Pablo T. Spiller.