Do elections delay regulatory action?

• 成果类型: Article
• 署名作者: Leverty, J. Tyler; Grace, Martin F.
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.06.010
• 发表日期: 2018
• 页码: 409-427
• 关键词: Government policy and regulation; political economy; insurance; electoral cycles; incentives

摘要

This paper investigates whether elections delay regulatory action against failing financial institutions by exploiting the cross-sectional and time-series heterogeneity in the exogenous electoral cycles of US insurance regulators and governors. We find causal evidence that regulators delay interventions before elections. The extent of the delay is larger for elected regulators than regulators appointed by the governor. Interventions by appointed regulators are less likely before competitive gubernatorial elections. Regulatory governance mechanisms that constrain the discretion of regulators reduce the delays of appointed regulators but not elected. Finally, we find evidence that suggests electoral delays increase the ultimate costs of failure. (C) 2018 Elsevier B.V. All rights reserved.