Excerpt: There is ... no theory under which the state or firm will always be superior at imposing nanny limitations on behavior. Because of this, we might expect firms to supply nanny rules when it is efficient for them to do so, say because of better monitoring, lower agency costs, or the like, and not to do so when government rules could be supplied at lower cost for a given efficacy level. The problem, however, is that there are government rules, regulations, statutes, constitutional provisions, and case law that may distort the market from efficiency. This essay makes the case for corporate nannyism and shows how government regulation may be biased without justification in favor of the nanny state.

MORE >>