Political Science 2211E Lecture Notes - Lecture 5: Comparative Advantage, Ontario Energy Board, Regulatory Capture
11 Mar 2016
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Lecture 5 where two world meet: regulaions, crown corporaions, and subsidies. Regulaion is an example of an authority-based policy instrument: threat and use of sancions for non-compliance, enforcement acions may include monetary penalies, but raising revenue is not primary purpose, less intrusive than public ownership. Regulates the condiions of business compeiion: prices and rates of return i. e. ontario energy board. Governments set prices consumers can be charged. When a irm has a monopoly in an important market. Rates set and intended to provide pricing transparency for consumers: entry i. e. crtc. Ensure standards are met or to protect domesic providers: exit i. e. manitoba ministry of infrastructure and transportaion. Restricions on ability of irms to exit a market. Usually employed to prevent irms from pulling out from unproitable, underserviced markets. Buses i. e. greyhound wanted to stop running unproitable routes in prairies, government allowed more proitable routes to compensate: output i. e. agricultural markeing boards.
