Recent Submissions

  • Intrastate Natural Gas Regulation: An Alternative Perspective

    Pierce, Richard (1992-01-01)
    Professor Kelly has chosen a topic that is both timely and challenging. The major reforms in federal regulation that occurred in the 1980s have created a dynamic, competitive market in natural gas. State regulators confront a daunting task in attempting to devise appropriate changes in their methods of regulating local distribution companies (LDCs). The many difficult problems facing them have a single source: gas is a commodity, but gas service is not. An MMBtu of gas in the ground in Texas is currently worth less than a dollar. An MMBtu of gas at a particular plant site or residence at a particular moment in time can be worth two dollars, five dollars, ten dollars, or even more. Getting the gas to a particular location at a particular time is a costly, complicated, and capital-intensive process. It requires use of multiple, immobile, idiosyncratic assets, including production and gathering facilities, high pressure pipelines, storage fields, and low pressure distribution lines.
  • Health Care Dollars and Regulatory Sense: The Role of Advanced Practice Nursing

    Safriet, Barbara (1992-01-01)
    Our current health care "system" has been criticized for providing too little care, too late, for too few people, at too high a cost. In this Article, Dean Safriet argues that these problems require a fundamental restructuring of existing health care delivery systems and more effective utilization of all health care personnel. Dean Safriet urges immediate legislative reform to reduce the restrictions that currently constrain advanced practice nurses, especially nurse practitioners and certified nurse-midwives. Advanced practice nurses have demonstrated repeatedly that they can provide cost-effective, high-quality primary care for many of the neediest members of society, but their role in providing care has been has been severely limited by restrictions on their scope of practice, prescriptive authority, and eligibility for reimbursement. Eliminating these restriction would enable advanced practice nurses to increase access to health care while preserving quality and reducing costs.
  • Evidence on Complex Structures of Physician Joint Ventures

    Mitchell, Jean; Scott, Elton (1992-01-01)
    Physician ownership of health care facilities has become a controversial issue in the national debate over how to control rising health care costs. Proponents of physician ownership contend that investment by physicians in health care facilities broadens access to health care by increasing the financing available for such facilities. Critics of physician ownership contend that such ownership arrangements lead to higher prices for medical services and more frequent use of unnecessary medical procedures, without improving the quality of care. In this Article, Professors Mitchell and Scott review the current debate and present new empirical evidence based on their study of more than 2600 health care clinics in Florida. The evidence presented here indicates that physician investment in health care clinics is more widespread than previously believed. The evidence also indicates that physician investment tends to increase both the frequency of referrals to the clinics and the cost of the services provided by the clinics. In light of this evidence, the authors argue that current legislation which prohibits or restricts physician joint ventures is inadequate. They recommend that future legislation be strengthened to include stronger prohibitions and restrictions on indirect physician investment.
  • Whose Law Is It Anyway?

    Koniak, Susan (1992-01-01)
    Corporate Lawbreaking and Interactive Compliance, edited by Jay A. Sigler and Joseph E. Murphy. Westport, Conn.: Quorum Books, 1991. 201 pages. What can and should be the role of private groups in creating and maintaining law? What can and should be the relationship between law-giver and law-receiver? These fundamental questions haunt each of the essays that make up Corporate Lawbreaking and Interactive Compliance (hereinafter Corporate Lawbreaking). These questions, though not the explicit focus of the book, are questions to which the essayists and editors of this book are speaking whether they realize it or not. Seen as a series of discussions on the role of non-state groups in creating and maintaining law, this book is provocative and worth reading. Some of the proposals in this book, if taken seriously, would radically transform our legal system and could transform our democracy. But the book does not self-consciously set out to describe the role of private groups in maintaining law or the relationship between law-giver and law-receiver. It sets out to do something else-to ground with concrete examples a theory that the editors articulated in an earlier book. Judged in light of its professed goal, the book is less successful.
  • Depositors as a Source of Market Discipline

    Mantripragada, Krishna (1992-01-01)
    The failure of many savings and loan institutions in the 1980s bankrupted the Federal Savings and Loan Insurance Corporation (FSLIC), forcing the FSLIC to rely on massive federal subsidies. A similar crisis subsequently struck the banking system, and it now appears that the Federal Deposit Insurance Corporation (FDIC) will also go bankrupt and require taxpayer subsidies. The vast expense of these bailouts has focused the attention of policymakers and the public on reducing the risk exposure of the federal deposit insurance system. In response to this crisis, the U.S. Treasury issued a report in 1991 in which it made specific proposals for reforming deposit insurance. The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) incorporated some of the Treasury Department's proposals. One controversial element of the FDICIA is a plan for reforming the deposit insurance system by shifting some of the risk of bank failures from the federal insurance fund to depositors themselves. This proposal rests on the premise that depositors who bear some of the risk of bank failure are likely to discipline weak institutions by threatening to withdraw their deposits. In this Article, Professor Mantripragada discusses the costs and benefits of depositor discipline and assesses the Treasury proposals and FDICIA provisions that are designed to promote depositor discipline. The author suggests that a maturity-based coverage limit would be preferable to the dollar-based limit retained by the Act.
  • Interstate Banking and Product-Line Freedom: Would Broader Powers Have Helped The Banks?

    Litan, Robert (1992-01-01)
    The banking difficulties of the 1980s prompted Congress to enact the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). Advocates of structural reform have criticized the FDICIA because it does not include broader interstate banking authority and product-line freedom. In this. Article, Mr. Litan predicts the effect the absence of such reforms can be expected to have on the U.S. banking industry. The predictions are derived from counter-factual exercises in which the author measures the impact the reforms would have had on the banking industry of the 1980s had the reforms been enacted. These exercises suggest that broader interstate powers would be more effective than expanded product-line authority at reducing bank failure, but they also indicate that neither reform would significantly reduce the number of bank failures during the next several years. Nevertheless, it appears that broader interstate authority, coupled with broader product-line freedom subject to suitable safeguards, would strengthen the industry overall by mitigating the risks associated with banking and lowering the prices of financial services. As a result, Mr. Litan concludes that structural reform of the banking system should remain on the congressional agenda.
  • Can Absolute Manufacturer Liability be Defended?

    Priest, George (1992-01-01)
    Professor George L. Priest's writings have asserted over the years that expanded products liability law.forces manufacturers to sell insurance contracts in conjunction with goods and services, making consumer purchases more expensive than they are worth and reducing consumer welfare. In the last volume of this Journal Steven P. Croley and Jon D. Hanson critically analyzed Professor Priest's work of recent years and argued that the expansion of tort liability has benefitted consumers even where it has forced the withdrawal of products and services from the market. Here, Professor Priest questions the conceptual and empirical claims behind Croley and Hanson's callfor absolute liability. He presents an analysis of general aviation, a prominent product market heavily affected by the expansion of liability, to underscore the authors' contrasting conceptions of efficiency in tort. In order to demonstrate the destructive effects of contemporary tort law, he adduces statistics that show a dramatic decline in general aircraft production despite a concurrent decline in the product accident rate. He suggests that significant analytical and empirical issues need to be addressed before Croley and Hanson's recommendation of absolute manufacturer liability can be adopted.
  • Intrastate Natural Gas Regulation: Finding Order in the Chaos

    Kelly, Suedeen (1992-01-01)
    In the mid-1980s, customers threatened to bypass local gas distribution companies in favor of other suppliers and cheaper fuels. In response, states began to reform their natural gas regulatory policies to lower delivered prices to potential bypassers. In this Article, Professor Kelly argues that the most promising means of reform is to unbundle traditional local gas utility services, that is, to make gas transportation services available to customers separately from gas retail sales services. This Article provides a thorough analysis of the unbundling policies adopted by state regulators across the nation. Through this systematic review of intrastate regulatory policies, Professor Kelly outlines the best method of maintaining open access to markets, of retaining sufficient regulatory control over local utility companies, and of maximizing competition and minimizing the adverse effects of cost-shifting and stranded investment. Professor Kelly asserts that regulatory bodies must recognize the competitive character of unbundled gas retailing service and the monopolistic nature of both unbundled gas transportation services and the services that remain bundled, in order to promote most effectively the primary goal of unbundling: prevention of uneconomic bypass by providing market-priced natural gas to end users.
  • Regulating Broadband Communication Networks

    Hammond, Allen (1992-01-01)
    Professor Allen Hammond argues that the impending development of broadband communication networks has the potential to expand and equalize speech rights by endowing the public with more numerous and more powerful opportunities for speech. To realize these benefits, however, Congress must design a novel regulatory scheme that will maximize the speech rights of both the owners and the users of broadband communication networks. Current regulatory schemes governing print, broadcast and cable provide media owners and editors with extensive speech rights, but fail to provide sufficient public access. In contrast, the regulatory scheme governing telephone service providers assures public speech rights only by depriving media owners of all opportunities for speech.
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  • Worst Things First: Risk, Information, and Regulatory Structure in Toxic Substances Control

    Applegate, John (1992-01-01)
    Scientific uncertainty is the characteristic problem of toxic substances control, and regulators lack the resources to resolve or significantly reduce uncertainty across all of the risks they must address. For this reason, the Environmental Protection Agency (EPA) has become intensely interested in setting priorities among its responsibilities. EPA lacks, however, a coherent framework within which to implement its findings. In this Article, Professor Applegate proposes that the current regulatory regime for toxic substances be restructured to emphasize thoughtful priority setting rather than unrealistic risk standards and deadlines. In his view, Congress should provide broad parameters for agency action in particular cases, but should give specific directions to the agency for setting priorities and goals. This recommendation necessarily implicates broader issues of congressional specificity in regulatory statutes, presidential control of administrative agencies, and judicial review in the early phases of the regulatory process. Professor Applegate explores these larger issues as they relate to his proposal and evaluates his proposal's feasibility by comparing it to legislatively mandated planning in forest management.
  • Fragile Commitments And The Regulatory Process

    Blackmon, Glenn; Zeckhauser, Richard (1992-01-01)
    Once a regulated utility has made an irreversible capital investment, that investment becomes vulnerable to appropriation by a regulator. This Article explores the incentives and strategies of the investor, the consumer, and the regulator-before and after capital investments are sunk-within a game-based model of regulation. A regulator, even one whose allegiance lies wholly with consumers, will find it advantageous to commit to repaying investor capital. A consumer gains when regulatory commitment to repaying capital is made less fragile. Commitment often does not take the form of a promise or contract. Historically, the most important force for keeping regulators faithful has been the continuing need for future investment. New methods for making commitments more sturdy include adopting technologies that result in small repeated investments, greater use of market transactions, and regulator involvement in the firm's planning decisions.
  • After-the-Fact Regulatory Review: Balancing Competing Concerns

    Blank, Eric; Pomerance, Stephen (1992-01-01)
    In their article, Blackmon and Zeckhauser (B&Z) describe the problems associated with fragile regulatory commitments and their effect on utility investment. When utilities invest in capital-intensive plants which have long lead-times and little alternative use, these investments become sunk: utilities will leave them in place as long as recovery of their relatively low marginal operating costs is possible. Under certain conditions, this provides pro-consumer regulators with the opportunity to appropriate the benefits associated with the utility's investment for consumers.
  • A Guide to Takeovers: Theory, Evidence, and Regulation

    Romano, Roberta (1992-01-01)
    The last decade witnessed an explosion of activity in the field of corporate takeovers, which ended in an environment of increased regulation of these transactions. These events have prompted extensive study into the causes for takeovers and the effects of their regulation. This article surveys and analyzes both the economic literature and the law in an attempt to determine which regulatory regimes make the most sense in light of the empirical evidence.
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  • The Law and Economics of Collective Bargaining for Hospitals: An Empirical Public Policy Analysis of Bargaining Unit Determinations

    LeRoy, Michael; Schwarz, Joshua; Koziara, Karen (1992-01-01)
    The National Labor Relations Board recently promulgated a rule that predesignated eight hospital bargaining unit classifications. The rule was an unusual deviation from adjudicatory procedures, intended to facilitate administrative approval without increasing strike activity or causing other undesirable collective bargaining outcomes. This article reports empirical data from a national survey of 574 hospitals. The survey was designed to test the economic conclusions that the Board reached in its Final Rule. The article concludes that the data support the Board's determination that designating the eight classifications is unlikely to cause undesirable collective bargaining consequences
  • The Economics and Ethics of Alternative Cadaveric Organ Procurement Policies

    Blair, Roger; Kaserman, David (1991-01-01)
    Under the National Organ Transplant Act of 1984, organ suppliers-usually the famillies of critically injured accident victims-are not allowed to receive compensation in exchange for granting permission to remove the organs of their deceased relatives. This organ procurement regime is therefore driven solely by potential donors' altruism. Due to the growing nationwide shortage of transplantable organs, the altruistic system has begun to draw considerable criticism. Focussing on the transplantation of kidneys, this Article challenges the theoretical and economic underpinnings of the altruistic system by comparing it to two alternative policies: a market system that allows demand and supply to equilibrate at a positive price, and a system which transfers property rights in cadaveric organs from potential donors to recipients. Blair and Kaserman subject these alternative policies to economic and ethical scrutiny, and conclude that the market system would not only generate the largest number of transplantable kidneys, but would also provide the greatest gain in overall social welfare.

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