The Regulator and the Judge: The Optimal Mix in TheControl of Environmental Risk

Nous considérons une firme qui génère un risque pour l'environnment via son activité industrielle et qui a une information privée à la fois sur son effort de précaution et sur le montant de ses actifs. Nous étudions l'interaction entre l'audit ex ante de l'effort de précaution par un régulateur et la vérification ex post de la capacité financière par un juge en cas d'accident. Du point de vue des incitations, les deux instruments sont utiles. Le policy-mix optimal dépend de la règle gouvernant l'intervention ex post et de l'efficience de l'intervention ex ante.

The public management of risk: Separating ex ante and ex post monitors

When a firm undertakes risky activities, the conflict between social and private incentives to exercise safety care requires public intervention. This control takes the form of both monetary incentives but also monitoring taking place either ex ante or ex post, i.e. before or after an accident occurs. We delineate the respective scopes of these monitoring activities when public monitors are either benevolent or corruptible. Separation between the ex ante and the ex post monitors helps to prevent capture, increases the likelihood of ex post investigation and improves welfare.risk regulation ; monitoring ; capture ; integration and separation

The Public Management of Risk: Separating Ex Ante and Ex Post Monitors

When a firm undertakes risky activities, the conflict between social and private incentives to implement safety care requires public intervention which can take the form of both monetary incentives but also ex ante or ex post monitoring, i.e., before or after an accident occurs. We delineate the optimal scope of monitoring depending on whether public monitors are benevolent or corruptible. We show that separating the ex ante and the ex post monitors increases the likelihood of ex post investigation, helps prevent capture and improves welfare.Risk Regulation, Monitoring, Capture, Integration, Separation