Private Politics and Public Regulation

• 成果类型: Article
• 署名作者: Egorov, Georgy; Harstad, Bard
• 署名单位: Northwestern University; National Bureau of Economic Research; University of Oslo
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdx009
• 发表日期: 2017
• 页码: 1652-1682
• 关键词: corporate social-responsibility; Consumer boycotts; self-regulation; UNITED-STATES; Europe; Activism; MARKET; POLICY; CSR

摘要

Public regulation is increasingly facing competition from private politics in the form of activism and corporate self-regulation. However, its effectiveness, welfare consequences, and interaction with public regulation are poorly understood. This article presents a unified dynamic framework for studying the interaction between public regulation, self-regulation, and boycotts. We show that the possibility of self-regulation saves on administrative costs, but also leads to delays. Without an active regulator, firms self-regulate to preempt or end a boycott and private politics is beneficial for activists but harmful for firms. With an active regulator, in contrast, firms self-regulate to preempt public regulation and private politics is harmful for activists but beneficial for firms. Our analysis generates a rich set of testable predictions that are consistent with the rise of private politics over time and the fact that there is more self-regulation and activism in the U.S., while public regulation continues to be more common in Europe.