How to Regulate
A Guide for Policymakers

The book teaches how to minimize the social welfare losses from the major market - and regulatory - failures.

Thomas A. Lambert (Author)

9781107144880, Cambridge University Press

Hardback, published 18 August 2017

278 pages, 25 b/w illus.
23.6 x 15.7 x 2 cm, 0.52 kg

'The title notwithstanding, this book will be valuable for all policy wonks, not just policymakers. It provides an organized and rigorous framework for analyzing whether and how inevitably imperfect regulation is likely to improve upon inevitably imperfect market outcomes.' Douglas H. Ginsburg, Chief Judge, United States Court of Appeals for the District of Columbia Circuit

Markets sometimes fail. But so do regulatory efforts to correct market failures. Sometimes regulations reach too far, condemning good activities as well as bad, and sometimes they don't reach far enough, allowing bad behavior to persist. In this highly instructive book, Thomas A. Lambert explains the pitfalls of both extremes while offering readers a manual of effective regulation, showing how the best regulation maximizes social welfare and minimizes social costs. Working like a physician, Lambert demonstrates how regulators should diagnose the underlying disease and identify its symptoms, potential remedies for it, and their side effects before selecting the regulation that offers the greatest net benefit. This book should be read by policymakers, students, and anyone else interested in understanding how the best regulations are crafted and why they work.

1. Defining our subject
2. The overarching model
3. The private ordering ideal
4. Externalities
5. Public (and quasi-public) goods
6. Agency costs
7. Market power
8. Information asymmetry
9. Cognitive limitations and behavioral quirks
Conclusion. Closing thoughts on open questions.

Subject Areas: International humanitarian law [LBBS]