Government & Markets
What are the conditions that distinguish success from failure in the governance and regulation of the economy?
Systemic institutional failures, perhaps most notably the financial crisis, have led to a growing realization that economic governance is both necessary and imperfect. And yet, contemporary scholarship has not adequately examined the possibilities for constructive governance of the economy. As regulatory responses to crises are crafted, there is a real danger that reforms will be rooted in old models that are known to be poor guides. Much hard work that will be necessary for re-imagining the possibilities and pitfalls of regulation remains to be done.
To address this challenge, the Tobin Project’s Government & Markets research initiative is focused on discerning the conditions that distinguish government success from government failure. This inquiry aims to understand when and to what extent government regulation contributes positively to society. At the same time, it asks which regulatory strategies and situations are likely to fail and considers how regulation can be made to work better. In the short-term and over time, this research effort has the potential to inform regulatory policymaking, undergirding the development of regulation able to support a vibrant market economy that serves the public interest.
Questions within the broader initiative include:
Preventing Capture: How can regulation be optimized to serve the public good without falling prey to “capture” by special interests?
Behavioral and Institutional Regulation: What can new perspectives from both experiments and close observation add to understanding of how institutions – especially firms and regulators – operate in complex markets to make such markets work better?
Rethinking Regulation: How might a widespread reconsideration of regulation affect reforms in the field, considering that healthy capitalist societies depend on sensible regulation?