ABSTRACT
The presence of multiple, overlapping regulations, policed by separate regulatory authorities, is a common feature of modern economies. The potential conflicts that may arise between the objectives and requirements of the various authorities pose a difficult problem for the designers of regulatory institutions. For example, while moving certain powers out of a given authority might be necessary to avert the concentration of power, this can at the same time lead to other distortions. A reason is that even if the objectives of each authority could be specified so completely as to render them perfectly consonant, the incentive difficulties arising from the agency problem and imperfections in monitoring the behaviour of the authorities will still lead to conflicts between the authorities’ objectives.
