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New research on governance controls from Harvard Business School faculty on issues such as governing rules, regulations, and reforms.
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The Emergence of Mafia-like Business Systems in China

by Meg Rithmire and Hao Chen

This study sheds light on the political pathology of fraudulent, illegal, and corrupt business practices. Features of the Chinese system—including regulatory gaps, a lack of formal means of property protection, and pervasive uncertainty—seem to facilitate the rise of mafia systems.

Deregulation, Market Power, and Prices: Evidence from the Electricity Sector

by Alexander MacKay and Ignacia Mercadal

Efforts to deregulate the US electricity sector beginning in the 1990s included market-based prices and restructuring measures to introduce competition. This paper argues that electricity prices increased after deregulation because of the presence of market power.

Dog Eat Dog: Measuring Network Effects Using a Digital Platform Merger

by Chiara Farronato, Jessica Fong, and Andrey Fradkin

With heated debate over antitrust regulation of online platforms, this study finds that when a larger platform acquired its greatest competitor, users were not better off with a single platform compared with two competitors, despite marked efficiency improvements experienced by the acquiring platform.

What Does December's Drug-Approval Dash Mean for COVID-19 Vaccines?

by Danielle Kost

Even in the best of times, pharmaceutical regulators tend to rush through drug applications in December. Now add in a ruthless pandemic. Research and insights from Lauren Cohen. Open for comment; 0 Comments.

Of Learning and Forgetting: Centrism, Populism, and the Legitimacy Crisis of Globalization

by Rawi Abdelal

Cycles of liberation and regulation of global finance follow a pattern of learning and forgetting. This essay argues that liberalization and globalization created the instability and inequality that have begun to undermine the system from within.

Why Investors Often Lose When They Sue Their Financial Adviser

by Danielle Kost

Forty percent of American investors rely on financial advisers, but the COVID-19 market rollercoaster may have highlighted a weakness when disputes arise. The system favors the financial industry, says Mark Egan. Open for comment; 0 Comments.

How Countries Use Financial Policy to Fight COVID-19

by Rachel Layne

Developing countries have fewer fiscal tools and policy options to combat COVID-19 damage to their economies, according to research by Alberto Cavallo and colleagues. Open for comment; 0 Comments.

It's Time for a Bipartisan Health Plan for Employers and Employees

by Regina E. Herzlinger and Richard J. Boxer

Regina E. Herzlinger and Richard J. Boxer prescribe a seemingly impossible cure for battling health care options: a plan that embraces both Republican and Democratic ideas. Open for comment; 0 Comments.

Sticky Capital Controls

by Miguel Acosta-Henao, Laura Alfaro, and Andrés Fernández

One of the legacies of the 2007–2008 global financial crisis has been a reassessment of the potential for restriction of capital flows policies. This paper documents a set of stylized facts on capital controls along their intensive and extensive margins for emerging markets and document them to be “sticky.” We then rationalize them through a model that includes fixed cost of implementing such policies, which lower the welfare gains of implementation.

Making Economics More Useful: How Technological Eclecticism Could Help

by Amar Bhidé

This paper shows how tools, such as simulations used to design new technologies, can facilitate collaborative economic policy judgments. The paper forms part of a broader, ongoing study of knowledge in practical fields such as engineering, medicine, and business.

How Should US Bank Regulators Respond to the COVID-19 Crisis?

by Michael Blank, Samuel G. Hanson, Jeremy C. Stein, and Adi Sunderam

Instead of the "watchful waiting" approach taken by US bank regulators to the pandemic crisis, they should use their prudential authorities to encourage banks to increase their equity capital. This is effectively a way of buying low-cost insurance against adverse scenarios that have become more likely.

Inflation with COVID Consumption Baskets

by Alberto Cavallo

Examining the impact that changes in expenditure patterns are having on the measurement of consumer price indices (CPI) inflation in 17 countries, this study finds that the cost of living for the average consumer is higher than estimated by the official CPI. This implies that real consumption is falling more quickly over time.

The Rise of the Investor State: State Capital in the Chinese Economy

by Hao Chen and Meg Rithmire

Researchers document and explain the rise of a novel form of intervention on the part of the Chinese state: the expansion of state capital beyond ownership of state firms.

HBS COVID-19 Global Policy Tracker

by Alberto Cavallo and Tannya Cai

The Harvard Business School Covid-19 Global Policy Tracker monitors new developments and changes in government policies throughout this crisis to analyze trends and correlations in countries' responses and economic impact.

Rebates in the Pharmaceutical Industry: Evidence from Medicines Sold in Retail Pharmacies in the U.S.

by Pragya Kakani, Michael Chernew, and Amitabh Chandra

Retail pharmacy data illustrates it can be misleading to use list prices instead of net prices to understand pharmaceutical prices. Analysts and economists working in public policy should be extremely cautious in drawing policy conclusions based on list prices alone.

Has COVID-19 Broken the Global Value Chain?

by Sean Silverthorne

4Questions Companies and consumers depend on the global value chain to create and distribute products around the world. What happens when the chain breaks? Insights from Laura Alfaro and Ester Faia. Open for comment; 0 Comments.

Small Businesses Are Worse Off Than We Thought

by Kristen Senz

A survey of small-business owners shows that lack of liquidity and skepticism of government programs are compounding COVID crisis recovery efforts. Open for comment; 0 Comments.

Consumer Protection in an Online World: An Analysis of Occupational Licensing

by Chiara Farronato, Andrey Fradkin, Bradley Larsen, and Erik Brynjolfsson

This paper uses new data collected by a digital platform to study the role of occupational licensing laws on individual choices and market outcomes. Results suggest that more stringent licensing laws restrict competition but do not lead to improvements in customer satisfaction.

Competition in Pricing Algorithms

by Zach Y. Brown and Alexander MacKay

The adoption of pricing technology can lead to higher prices, by increasing the frequency of price changes and/or encoding pricing strategies in algorithms. This raises new antitrust questions for policymakers, as firms do not need to coordinate or collude to raise prices.

The Impact of the General Data Protection Regulation on Internet Interconnection

by Ran Zhuo, Bradley Huffaker, KC Claffy, and Shane Greenstein

While many countries consider implementing their own versions of privacy and data protection regulations, there are concerns about whether such regulations may negatively impact the growth of the internet and reduce technology firms’ incentives in operating and innovating. Results of this study suggest limited effects of such regulations on the internet layer.