Payson Center Releases Economic Impact Analysis on Dodd-Frank Section 1502 Concerning Conflict Mineral

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This white paper analyzes and critiques both the SEC and NAM economic impact models relative to the implementation of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and proposes a 3rd model which is more reflective of the actual economic impact of this law.

As background, on September 26, 2011, faculty members Dr. Elke de Buhr and Dr. Laura Haas at Tulane University's Payson Center for International Development were contacted by Jessica Simon of Senator Durbin's office with a specific request for help in providing a detailed estimate of what it would cost companies to implement the Congo Conflict Mineral Act. This request was met by a Tulane team agreeing to prepare this paper with doctoral student, Chris Bayer as lead.

At the heart of the debate is how the SEC should calibrate regulation that implements the law in a manner consistent with the goals of the legislation without needlessly burdening industry and undermining American competitiveness. The various possible regulation formulations function as parameters to determine the act's economic impact. This paper analyzes and critiques both the SEC and NAM economic impact models as both models contain significant shortcomings and proposes a more accurate 3rd model. By honing in on the main deliverables under Dodd Frank, focusing on actual costs, assigning fair valuations, and basing the extrapolation the macro-level on the best available figures, this model may help shed light on central issues at the heart of the discussion and inform the crafting of practicable regulation. 


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