Regulation

The study of regulation examines how governments control economic and social activity through rules, and the design and effects of regulatory regimes.

Scope

It covers the rationale and theory of regulation, regulatory capture, regulatory strategy and enforcement, and deregulation and regulatory reform.

Core questions

• Why and how do governments regulate?
• Whose interests does regulation serve?
• How should regulation be enforced?
• When should activities be deregulated?

Key concepts

• Regulatory capture
• Public-interest regulation
• Responsive regulation
• Enforcement
• Deregulation
• Regulatory design

Key theories

Economic theory of regulation

Stigler argued regulation is often captured by the regulated industry, serving producer interests.

Responsive regulation

Ayres and Braithwaite proposed escalating enforcement strategies transcending the regulate-versus-deregulate debate.

History

Regulation scholarship developed from public-interest theory through Stigler's capture theory to responsive and risk-based regulation (Ayres & Braithwaite), shaping modern regulatory governance.

Debates

Public interest versus capture

Whether regulation serves the public or is captured by regulated industries.

Key figures

• George Stigler
• Ian Ayres
• John Braithwaite

Seminal works

• stigler-1971
• ayres-braithwaite-1992

Frequently asked questions

What is responsive regulation?

An approach (Ayres & Braithwaite) that escalates from persuasion to sanctions depending on the regulated party's behaviour.