The Role of the State

In this second installment of a two-part series, David Dubrow and Kent Hiteshew propose reforms to improve disclosure standards in the municipal bond market, exploring both legislative and regulatory approaches. They outline eight key guidelines for enhancing transparency and consistency in municipal offering statements, aiming to bring these disclosures into the modern era and better protect investors.

Two municipal market veterans, David Dubrow and Kent Hiteshew, delve into the history and current state of disclosure practices in the municipal bond market, highlighting the flaws in the current system. In a follow up, the authors will explore potential paths to reform and key components of a uniform standard of disclosure for municipal securities.

In a survey of nearly 400 European firms that export abroad, Elena Argentesi, Livia De Simone, Stephan Paetz, Vincenzo Scrutinio find that most firms believe that competition forces them to produce cheaper and higher quality products and services, allowing them to be more competitive in foreign markets.

Richard R. John recounts how in the twentieth century the once-mighty Bell System, whose descendants include today’s Verizon and AT&T, waged a powerful decades-long public relations campaign, including the funding of history books and research centers, to persuade the public that its success rested in technological imperatives and economic incentives rather than a favorable regulatory landscape. Though the Bell PR campaign failed to stop three highly effective antitrust suits, it succeeded in establishing a story about management, competition, and innovation that many Americans—including several of today’s Big Tech critics—have uncritically repeated.

The financial market has moved from LIBOR to alternative interest-rate benchmarks, such as SOFR. Credit-sensitive rates, which are now becoming increasingly popular, carry greater risks than SOFR and other “risk-free rates” and must be used with great care. If not, United States legislators might need to step in to further stimulate the use of safter benchmark alternatives, writes Randy Priem.

Alessia D’Amico and Inge Graef discuss Mario Draghi’s proposal for a New Competition Tool to revamp competition in the European Union. They write the European Commission must think hard about its design to achieve the right balance.

Lulu Wang writes that the Department of Justice’s lawsuit against Visa for maintaining a monopoly in the debit card market will, if victorious, only impact a fraction of the transaction fees that burden merchants. And if the lawsuit opens up the market to more competition, there are reasons to believe a more fractured card network could end up hurting consumers and merchants.

Jonathan B. Baker and Fiona Scott Morton challenge the interpretations of two new papers from Carl Shapiro & Ali Yurukoglu and Nathan Miller, which question economy-wide trends toward a rise in market power and, if any such trend has occurred, that it is due to lax antitrust enforcement.

In his recent article, John Kwoka accepts the antitrust community’s general opinion that Procter & Gamble requires courts and the antitrust agencies to weigh plaintiff rebuttals that a merger can produce extraordinary efficiencies even if it reduces competition. Jerry Cayford argues that this is an inaccurate reading of the Supreme Court’s decision, and it has hampered enforcement for decades.

Should we pay regulators according to their performance? In a new paper, Jason Chen, Jakub Hajda, and Joseph Kalmenovitz show that a pay-for-performance system has a surprising effect: it increases regulatory effort but also motivates regulators, especially the productive ones, to quit and join the private sector.