Tommaso Valletti argues that economic consultants have made little meaningful contribution to antitrust policy and enforcement over the past 20 years—despite their assertions of bringing academic insights to practice. Valletti calls for more critical scrutiny of consultants' biased economic analyses by antitrust authorities and courts, as well as greater use of structural presumptions in merger review.
The supply of accountants in the United States is in serious decline due to the American Institute of Certified Public Accountants’ decision in 1988 to raise entry requirements. Ray Ball argues that the rule change did not improve the quality or productivity of newly licensed accountants, but instead reflected the incentives of the Institute’s members to reduce entry to increase their own salaries.
Why has antitrust enforcement declined in the United States since the 1970s? Is it due to the preferences of voters, business influence, or an alternative explanation altogether? In this symposium, Jonathan Baker, Eleanor Fox, and Herbert Hovenkamp discuss the findings of Filippo Lancieri, Eric Posner, and Luigi Zingales’ new paper, “The Political Economy of the Decline of Antitrust Enforcement in the United States.” In this article, Baker critiques the big business capture theory the authors develop and suggests an alternative “settlement” theory to explain the shift toward weaker antitrust enforcement that began in the 1970s.
Eleanor Fox evaluates "The Political Economy of the Decline of Antitrust Enforcement in the United States" by Professors Lancieri, Posner, and Zingales, praising its revelations on the depth of corporate capture while challenging its narrative of judicial and regulatory dissembling on promises to uphold antitrust.
In contrast to a recent paper that argues the decline in antitrust enforcement over recent decades is due largely to the political influence of big business, Herbert Hovenkamp argues that small businesses and trade associations have historically had more influence over antitrust policy, often lobbying for less competition and higher prices.
Hao Zhang examines how global value chain partnerships among large, monopolistic firms in the US enable new forms of political coordination and coalition-building to influence trade policy in their favor, despite popular backlash against globalization.
The following is an excerpt from the book The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It - New and Expanded Edition by Anat Admati and Martin Hellwig published by Princeton University Press and reprinted here by permission. Also check out today's Capitalisn't interview with Anat Admati.
The United States has relaxed campaign finance laws over the past few decades. As a result, there exist concerns about politicians favoring special business interests over the welfare of other constituents, such as workers. In a new paper, Pat Akey, Tania Babina, Greg Buchak, and Ana-Maria Tenekedjieva examine how the 2010 U.S. Supreme Court decision in Citizens United v. Federal Election Commission affected earnings for firms and workers, as well as political turnover and polarization at the state level.
In new research, Valentino Larcinese and Alberto Parmigiani find that the 1986 Reagan tax cuts led to greater campaign spending from wealthy individuals, who benefited the most from this policy. The authors argue that a very permissive system of political finance, combined with the erosion of tax progressivity, created the conditions for the mutual reinforcement of economic and political disparities. The result was an inequality spiral hardly compatible with democratic ideals.
In new research, Matthew C. Ringgenberg, Chong Shu, and Ingrid M. Werner ask if academic research exhibits political slants. They develop a new measure of the political slant of research and study how it varies by discipline, demographics, and the political party of the sitting United States president. Finally, they show that their measure is related to the researchers' personal political ideology, suggestive of an ideological echo chamber in social science research.
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