Public Interest in Theories of Regulation Essay.

The private theory interest of regulation does not consider the public interest at all (Posner 1974). In this theory, interest groups represented by big corporations only seek to maximise profits by exerting pressure on politicians and regulators (M.Martins 2008).

Private Interest Theory: This theory is based on the assumption that Government is not a neutral arbiter as supposed in public interest theory.

The Public Interest Theory of Regulation: Non-Existence or.

We can say that the regulation seeks the protection and benefit of the public at large. Under this theory regulatory bodies are considered to represent the interests of the society in which they operate, rather than their private interests.The Public Interest Theory Of Regulation Economics Essay Social Regulation. Social regulation came about after industrial regulation which regulated monopolies and the price of. Natural Monopolies. A natural monopoly occurs when one company supplies the market demand at a fair price. It would.Public interest theory was developed by A.C. Pigou (1932). The author believed that the regulations are prepared in the public interest when they are demanded by the public for correcting inefficient practices. Regulations are understood to do good to the whole society rather than any individual’s interest.


Private interest theory is the main regulatory theory which emphasises the need for standard setters to intervene because of market inefficiencies and inability to self regulate. Private Interest or (economic Interest theory) is based on an assumption similar to PAT that individuals seek to act in their own self interest.The public interest view The public interest view of regulation holds that government regulators will implement rules which improve the welfare of consumers. From this perspective, regulations are meant to protect consumers from harm resulting from irresponsible, greedy, or fraudulent producers.

The development and techniques of regulations have long been the subject of academic research. Two basic schools of thought have emerged on regulatory policy, namely, positive theories of regulation and normative theories of regulation. Positive theories of regulation examine why regulation occurs. These theories of regulation include theories of market power, 2 interest group theories that.

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The Public Interest Theory Of Regulation Economics Essay Industrial regulation is the industrial regulation of prices charged to the consumer, which is also known as public regulation. The idea is to determine a price, or rate, that covers the production cost and a fair profit for the company.

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But a legitimate public interest in an aspect of the private behaviour of a public figure cannot automatically justify disclosure of any private information about the individual. Legitimate public interest certainly justified the story that the heir to the Britain throne, Prince Charles, the Prince of Wales, had had an affair with Mrs Camilla Parker-Bowles after his marriage.

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The Public Interest Theory of regulation explains in general terms, that regulation seeks the protection and benefit of the public at large; public interest can be further described as the best possible allocation of scarce resources for individual and collective goods.

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It means that accounting regulations can have different impact on different people or groups. Moreover, private interest theory argues that regulations are initially put in place to protect the public interest, as well as the assumption that government regulators are neutral arbiters not driven by self-interest.

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It implies that regulation is a response to the public demand for the establishment of efficient and equitable market practices. In this theory, society, rather than private and individual vested interests, is the main party of interest and the main beneficiary.

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A second reason for the expansion of scholarly interest in this area is the increasing importance of administrative regulation in the U.S. economy. Regulation spread to more and more sectors of the economy, and the relative importance of such heavily regulated sectors as transpor-tation, energy, and telecommunciations has also increased. The impact.

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Private interest theories of regulation developed by Chicago and Virginia school of economists suggests that regulation does not protect the public at large but only the interests of special groups.

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Explain how the public interest theory of regulation might come to a different conclusion regarding emission fees v. marketable permits than the interest group theory.

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Thus regulations are put in place by the regulators in the public interest. However a counter view is quoted by the proponents of 'economic interest theory of regulation'. As according to this approach the members of the regulatory body can't be totally free from the bias and they have their own self interest attached to the whole process.

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