The optimal form of regulation of the average price depends on the relative importance of the various sources of information asymmetry influencing the cost levels. Theory provides two main insights that hold, irrespective of the main source of distortion. The first is that the average regulated price needs to include a temporary payment to cover the price the regulator must pay to get the missing information and this price should be seen as an additional cost. The second is that the regulators should set up a menu of desirable contracts and allow the firms to self-select the contract type that best matches their capacity and risk-taking preferences; good firms (low costs) tend to prefer fixed-price contracts and bad firms (high costs) tend to prefer cost-plus. There are three main approaches to set the average price in practice: cost-plus, price caps and hybrids. Various forms of performance benchmarking can be useful complements to close the informational gap on costs and to shame poor performance (sunshine regulation). In practice, most countries are evolving towards hybrid forms of regulation emphasizing the need to account for the multiplicity of regulatory goals and informational constraints.

Inequality is a major global issue, destroying the social cohesion necessary for stability and security, the subject of Sustainable Development Goal 10. Poverty results from failures of redistribution within the economic system, stagnating wages, chronic unemployment and lack of opportunity, while less attention has been paid to the increasing global wealth going to the already wealthy as returns on capital, producing a social backlash. A new multilateral specialized agency should be created within the reformed UN system specifically to address growing economic inequality and to promote more equitable distribution of the world’s resources. While some countries have advanced, inequality between states remains a long-term problem, with development aid failing to address root causes. Various options and policies are available to redress global inequality between and within countries, including progressive taxation, employment creation, gender equality, a universal basic income and other provisions for social security. Design principles for a more just and sustainable economy are reflected in the UN 2030 Agenda. One priority is to establish a global regulatory framework for social and environmental responsibility in the private sector, creating a level playing field for business. Another is to rethink the global economic and financial architecture.