Regulatory instruments should be carefully designed to achieve desired outcomes from "summary" of The Economics of Regulation: Principles and Institutions: Economic principles by Alfred Edward Kahn
The design of regulatory instruments holds significant importance in the regulatory process, as they serve as the means through which desired outcomes are achieved. These instruments must be carefully crafted to align with the specific objectives set by regulators and policymakers. By doing so, regulators can ensure that the intended goals of regulation, such as promoting competition, protecting consumers, or achieving environmental sustainability, are effectively realized. The careful design of regulatory instruments involves considering various factors that may impact their efficacy. For instance, regulators must take into account the characteristics of the market being regulated, as well as the behavior of firms and consumers within that market. Additionally, regulators must anticipate potential unintended consequences that may arise from the implementation of regulatory measures and take ste...
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