INTRODUCTION
There has always been a debate around what the ultimate goal of a regulatory process should be. Firstly, whether it is the general good of society writ large that is pursued, more importantly, whether the conception of what is ‘good’ for the public must be left to the regulator or if he must bow down to the public’s conception of their own good even if he disagrees and secondly, whether regulation implicates allowing special interests to contest in an arena in order to use government power for narrow advantages.
Crudely put, the first normative scenario is what comprises the ‘Public Interest’ theory of regulation and the subsequent scenario is what comprises the ‘Capture’ theory of regulation, and is what has been dominant for the past 25 – 30 years of the regulatory process.
Regulation may be surmised to be the exercising of the collective power of the government in order to keep market failures in check, to protect the polity from monopolistic market behaviour and to suppress the detrimental effects of externalities.
SEPARATION OF INTERESTS
Division of interests is made along the lines of two variables. Private and Public interests are separated along the lines of distinguishing kinds of motivation; and General and Special interests to distinguish between the kinds of political dominance.
When private individuals hold public positions, they have private preferences that are separate from the society they reckon to serve in the first place. These preferences and interests are self- regarding in nature. Public interests however are those preferences of individuals that are made keeping their and others condition and behaviour in mind. The context setting here will a...
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...Ministry for Corporate Affairs in India, headed by Sachin Pilot. Such former employees who worked on higher rungs of positions in the companies would have had access to all information regarding profits, audits, management of funds etc. To use such privileged knowledge and help in formulating policies for the very companies that they worked for is a classic case of regulatory capture. The ‘comply or explain’ clause was successfully included. It gave companies who didn’t want to part with their profits, enough opportunity to explain ‘why’ they couldn’t do so any fiscal year.
It would be too naïve to claim one theory superior to the other. Although, on the basis of their ability to underpin realities that exist in society and the profound diverse ways in which policies can be manipulated to suit vested interests, the Capture Theory of regulation helps objectively.
First the story of the Standard Oil Company briefly describes the limits of power. When Rockefeller was trying to take over the market he formed the “South Improvement Plan. When this occurred the public grew very angry with the price of trains, so nobody went on the railroads and Rockefeller eventually got the bill, until prices changed. This is an example of how the consumers, make the company run and when nobody wants to buy your product the individual must adjust. Another example would be when the Standard Oil Company was primarily the only oil company and was forced to split into thirty nine different independent companies. This shows that one business cannot control the entire market and interventions will need to be done accordingly so that a company does not have all the power.
Given the nature of man, factions are inevitable. As long as men hold different opinions, have different amounts of wealth, and own different amount of property, they will continue to fraternize with people who are most similar to them. Both serious and trivial reasons account for the formation of factions but the most important source of faction is the unequal distribution of property. Men of greater ability and talent tend to possess more property than those of lesser ability, and since the first object of government is to protect and encourage ability, it follows that the rights of property owners must be protected. Property is divided unequally, and, in addition, there are many different kinds of property; men have different interests depending upon the kind of property they own. For example, the interests of landowners differ from those who own businesses. Government must not only protect the conflicting interests of property owners, it must, at the same time, successfully regulate the conflicts that result from those who own, and those who do not own, property.
. Factions can be present in many different settings in society. They can be a passion for different opinions on religions, government, or war. Madison claims that "the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever been formed distinct interests in society." The modern government includes factions as necessary operations, and the regulation of these interest groups form the foremost assignment of legislation.
The amount of government regulation, restriction, and intervention in the economy is substantial. No free markets, and rapid innovations in technology and communications, the need for government intervention in the economy is necessary to correct abuses or to promote general welfare.
...nments, corporations and public institutions for the common good. [Which]… required a broadly framed policy” (229).
The most manageable way to approach such an intricate and abstruse concept such as public order is to first establish it as a means...
There are two perspectives presented in the article namely, the individualist – economic core approach and the normative perspective. The first tells us that the publicness is necessary in the “production of goods and services becoming supportive to the needs of the people”. The second perspective tells us that the government must “provide structures that allow the community to identify itself as part of the community as a means of preserving and strengthening public interest”. The public is somehow referred to by Pesch and Wilson in the same manner attributing public to “needs” and “interest” of the people, both intangible and
An argument against the interest groups and the pluralist view is that it sees public
The current issues that have been created by the market have trapped our political system in a never-ending cycle that has no solution but remains salient. There is constant argument as to the right way to handle the market, the appropriate regulatory measures, and what steps should be taken to protect those that fail to be competitive in the market. As the ideological spectrum splits on the issue and refuses to come to a meaningful compromise, it gets trapped in the policy cycle and in turn traps the cycle. Other issues fail to be handled as officials drag the market into every issue area and forum as a tool to direct and control the discussion. Charles Lindblom sees this as an issue that any society that allows the market to control government will face from the outset of his work.
Regulation is an important tool used by our government entities that strongly impacts public health. It can be used to enforce new policies and initiatives in order to control risks or dangers to the public and can encourage improved behaviors within the population. There are legal foundations supporting and permitting the use of regulations in our government, and there are recognized times regulation can be justified.
.... Measures to avoid a situation of that nature must focus on the enactment of effective policy by both local and national governments to regulate their industries, and focus on having an adequate number of revenue-generating industries so as not to jeopardize public interests.
Public Law: Text, Cases, and Materials by Andrew Le Sueur, Maurice Sunkin and Jo Murkens (Paperback - 12 Aug 2010) chapter 8 p 368-418
Over all the appropriate role of government has always been an argument discussing whether it is actually helping our economy or is the government gaining too much power over the markets. However the economy could not prosper without the actions imposed to assist in diffusing the power over the markets and regulating as well as enforcing the law in order for things to done in a beneficial way to both the consumers and the markets.
The first point that Rodrik makes is that markets are limited by the scope of governance or regulation. He argues that markets and governments are most effective when they are operating in accordance with one another. This theory seems to stem from a theory earlier developed by the famous economist Adam Smith, which was that “the division of labor is limited by the extent of the market.” Rodrik expands on this theory by saying that not only is labor limited by the market, but that markets are limited by government.
‘The doctrine of dichotomy implied that the politicians and their direct appointees have the right to make policy decisions for the polity but it is the duty of the bureaucrats to carry those policies in good faith’ (Pfiffner, 2004, p. 2).