Licit and Illicit Responses to Regulation

  • Lee Benham

Newregulation can elicit a great variety of responses from individuals, firms, interest groups, and bureaucracies. This chapter examines a range of common legal and illegal behaviors that arise as responses to new regulations. It also compares the approaches that newinstitutional economics and neoclassical economics use to study these responses. The motivation for introducing new regulation is generally to influence behavior: to promote or restrict competition, to redistribute income, to increase or reduce barriers to entry, to increase or reduce spillovers, and so on. However, regulation often influences behavior in ways that differ from the initially stated rationale. This chapter focuses on the consequences of regulation, on this wide range of responses, rather than on the rationale offered for introducing the regulation.


Transaction Cost Vertical Integration Institutional Economic Informal Economy Deadweight Loss 
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© Springer-Verlag Berlin Heidelberg 2008

Authors and Affiliations

  • Lee Benham
    • 1
  1. 1.Department of EconomicsWashington University in St. LouisUSA

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