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How do Regulators Regulate? Enforcement of the Pure Food and Drugs Act, 1907--38

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  • Marc T. Law

Abstract

Economists have devoted relatively little attention to analyzing how government officials actually enforce regulation. This is a significant omission, since the efficacy of regulatory enforcement and the effects of regulation on economic outcomes may depend on how regulators regulate. This article sheds light on these issues by examining how the fledgling Food and Drug Administration (FDA) enforced the Pure Food and Drugs Act from 1907 to 1938. I argue that because the FDA's ability to enforce this law through deterrence was limited, effective enforcement could be obtained only in those instances where the agency had the capacity to offer benefits to compliant firms in the way of quality certification or direct assistance in improving product quality. The available evidence on the FDA's enforcement activities is consistent with this prediction. The analysis presented may help to explain why contemporary regulatory agencies spend considerable resources on advisory enforcement activities. Copyright 2006, Oxford University Press.

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  • Marc T. Law, 2006. "How do Regulators Regulate? Enforcement of the Pure Food and Drugs Act, 1907--38," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(2), pages 459-489, October.
    • Handle: RePEc:oup:jleorg:v:22:y:2006:i:2:p:459-489
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    File URL: http://hdl.handle.net/10.1093/jleo/ewj014
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    Cited by:

    1. Marc T. Law & Cheryl X. Long, 2011. "Revolving door laws and state public utility commissioners," Regulation & Governance, John Wiley & Sons, vol. 5(4), pages 405-424, December.
    2. Marc T. Law & Zeynep K. Hansen, 2009. "Medical Licensing Board Characteristics and Physician Discipline: An Empirical Analysis," NBER Working Papers 15140, National Bureau of Economic Research, Inc.
    3. Karim Jamal & Shyam Sunder, 2011. "Unregulated Markets for Audit Services," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 1, pages 1-16, December.
    4. Anne‐Marie Reynaers & Salvador Parrado, 2017. "Responsive regulation in public‐private partnerships: Between deterrence and persuasion," Regulation & Governance, John Wiley & Sons, vol. 11(3), pages 269-281, September.
    5. Calel, Raphael & Dechezlepretre, Antoine & Venmans, Frank, 2023. "Policing carbon markets," LSE Research Online Documents on Economics 120565, London School of Economics and Political Science, LSE Library.
    6. Buckley, Jenifer A., 2015. "Food safety regulation and small processing: A case study of interactions between processors and inspectors," Food Policy, Elsevier, vol. 51(C), pages 74-82.
    7. Daniel Carpenter & Justin Grimmer & Eric Lomazoff, 2010. "Approval regulation and endogenous consumer confidence: Theory and analogies to licensing, safety, and financial regulation," Regulation & Governance, John Wiley & Sons, vol. 4(4), pages 383-407, December.

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