The early work of Stigler (1971) treats the regulatory process as the
arbitration of conflicting economic and political interests rather than
a pure welfare-maximizing effort. This paper builds on these ideas
and models the regulatory process as a game where the industry-lobby, consumers-voters, and a regulator-politician interact to define the regulated price, in alternating electoral and non-electoral periods. The equilibrium that emerges consists of a fully rational political price cycle in a regulated industry. Using monthly data for regulated gasoline and electricity prices from Brazil, we find strong evidence pointing towards the existence of electoral price cycles in both markets. (JEL D72, L51, L71, L78, L94, L98, O14)
Moita, Rodrigo M. S., and Claudio Paiva.
"Political Price Cycles in Regulated Industries: Theory and Evidence."
American Economic Journal: Economic Policy,
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Economics of Regulation
Mining, Extraction, and Refining: Hydrocarbon Fuels
Industry Studies: Primary Products and Construction: Government Policy
Industry Studies: Utilities and Transportation: Government Policy
Industrialization; Manufacturing and Service Industries; Choice of Technology