As was asserted already the economists take an important role in the study of regulation. Below you may find some notable contributions of the economists - some of them, with direct relation to political analysis.

Averch, Harvey and Johnson, Leland, "Behavior of the Firm Under Regulatory Constraints", American Economic Review, 1962, Vol 52, pp. 1053-1069.

Stigler J. George, "The Theory of Economic Regulation", Bell Journal of Economics and Management Science, Vol. 2, 1971, pp. 3-21.

Peltzman Sam, "Toward a More General Theory of Regulation", Journal of Law and Economics, Vol. 19, 1976, pp. 211-240.

Abstracts

"In judging the level of prices charged by firms for services subject to public control, government regulatory agencies commonly employ a "fair rate of return" criterion: After the firm subtracts its operating expenses from gross revenues, the remain net revenue should be just sufficient to compensate the firm for its investment in plant and equipment. If the rate of return, computed as the ratio of net revenue to the value of plant and equipment (the rate base), is judged to be excessive, pressure is brought to bear on the firm to reduce prices. If the rate is considered to be too low, the firm is permitted to increase prices.

The purpose here is (a) to develop a theory of the monopoly firm seeking to maximize profit but subject to such as constraint on its rate of return, and (b) to apply the model to one particular regulated industry - the domestic telephone and telegraph industry. We conclude in the theoretical analysis that a "regulatory bias" operates in the following manner: (1) the firm does not equate marginal rates of factor substitution to the ration of factor costs; therefore the firm operates in efficiently in the sense that (social0 cost is not minimized at the output it selects. (2) The firm has an incentive to expand into other regulated markets, even if it operates at a (long-run) loss in these markets; therefore, it may drive out other firms, or discourage their entry into these other markets, even though the competing firms may be lower cost producers. Applying the theoretical analysis to the telephone and telegraph industry, we find that the model does raise issues relevant to evaluating market behavior.

The potential uses of public resources and powers to improve the economic status of economic groups (such as industries and occupations) are analyzed to provide a scheme of the demand for regulation. The characteristics of the political process which allow relatively small groups to obtain such regulation is then sketched to provide elements of a theory of supply of regulation. A variety of empirical evidence and illustration is also present

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