Regulation and Development

Jean-Jacques Laffont provides the first theoretical analysis of regulation of public services for less developed countries (LDC's). He shows how the debate between price-cap regulation and cost of service regulation is affected by the characteristics of LDCs, develops a new theory of regulation with limited enforcement capabilities, and discusses the delicate issue of access pricing in view of LDC's specificities. Based on organization theory and history, and using empirical tests where possible, Laffont's evaluation of the different ways to organize the regulatory institutions makes a significant contribution to the field.