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This research aims at incorporating the political environment in the process of policy making such as regulation and competition policy.  The normative effects of these policies on market outcomes have been widely analyzed, both theoretically and empirically.  To understand their impact on market outcomes, however, it is important to consider the underlying forces that determine how they are chosen, such as institutions, the electoral process, and lobbying.  It therefore requires simultaneously endogenizing the determinants and the effects of the political decision making processes.  This is achieved by combing industrial organization analysis with aspects of political economy.  In particular, there are currently four areas that are being investigated within this approach:

The increased importance of understanding the institutional environment — i.e., political, economic & bureaucratic institutions — has been highlighted by a few developments: first, institutional arrangements appear to explain variation in cross-national economic efficiency; second, the economic implications of domestic institutional arrangements are no longer contained within a nation.  In short, the rapid internationalization of markets has enhanced the merit of factoring any relationship between institutions and international competition.  Accordingly, the political-economic research in this project aims to understand how variations in the cross-national institutional environment impact economic outcomes, and to analyze the two-way relationship between domestic institutional arran