ECONOMIC

identify the causes of a disease, and the link between health and workingconditions is difficult to establish. Many occupationally related diseasesappear long after exposure to their causes. The charges might follow solong after the hazardous conditions had caused harm that they would notplay much part in decisions affecting the health of employees. The assignmentof liability is further complicated because firms may disappear as timepasses or avoid responsibility in other ways.Information problems and the long latency of many occupational diseasesmake it very difficult to estimate costs and therefore the level of exposurethat society is willing to tolerate. In addition, even if these problems wereresolved it would be hard to embody the results in an operational systemof levying the appropriate charges and internalizing the costs. These samedifficulties confront the engineering standards approach. But for occupationalhealth objectives there is often a correct preference for standards thatprohibit or severely limit exposure, rather than for an injury fee approachthat might allow substantial exposure. In the presence of considerableuncertainty, the desire to err in the direction of too much health and safetymay require a standards approach. Where the relevant information is availableand the risks involved are not excessive, the use of performance standardsmay be a more effective means of achieving desired levels of safety and health.Because of the substantial externalities that may be involved, and thedifficulty of generating private sector financing of basic research, an importantrole for Government lies in financing research relating to occupationaldisease.IMPLEMENTING REGULATORY REFORMIn spite of the widespread recognition that reform of certain Governmentregulatory policies could yield substantial economic benefits, there remainmajor obstacles to achieving reform. Compared to those who would benefit byreform, those who would be hurt are fewer; but they are also likely to be moreaware of the losses that they would incur. Many potential losers are wellorganized and have an effective system for communicating their views topolicy makers and the public. On the other hand, the beneficiaries ofregulatory reform (especially the ultimate consumers of products of theregulated industries) are numerous, and the benefit per individual is usuallysmall. Beneficiaries of reform are less likely to understand their stake inregulatory reform, are not usually organized, and generally have littlesuccess in effectively communicating their views to decision makers andthe public.Those in a position to lose from regulatory reform are not always theones who have gained from prior restrictive economic regulations. In a wellfunctioningmarket, the sales price of capital assets reflects the future earningsstream they are expected to generate, appropriately discounted toaccount for delay in the receipt of those earnings. The value of regulated industries'assets are likely to be elevated sufficiently to reflect the expectationthat regulation, and its associated benefits to existing firms, will continue156