Public Interest Theory v. Economic Interest Theory - Coursework Example

Download file to see previous pages Many research studies have examined the various regulations employing both public interest theory and economic interest theory and they have found that there is a lack of harmony as to the supremacy of one theory over the other. Public interest theory can be defined as a positive action and also some negative action initiated by a government in the cause of the public interest. Positive action is concerned with securing a benefit to “the public” whereas a negative action is concerned with the prevention of harm to ‘the public.’ The public interest theory of regulation essentially argues that regulators act to maximize the public interest. This theory indeed assumes that the public’s interest is homogeneous or ignores the conflicts of interest among different groups that make up the public. Public interest theory can be directed to negate the adverse effects of certain types of market failure. One another definition of public interest theory is regulation introduced for correcting a market failure due to the manifestation of political pressure which is implemented to safeguard the public.

During the majority period of the twentieth century, the ‘public interest theory’ of government was widely followed. Thus, the notion is that the policymakers reacted in the paramount interest of the common public. Bureaucrats and politicians prefer to label themselves as “social workers.’

The supporters of theory demonstrated that the role of the regulatory agency is to safeguard the public from private behavior that may injurious to society. In case, there are market failures and inefficiencies occurred which resulted in natural monopolies, then the government should intervene to safeguard the public interest.

For instance, the Rome Convention on contractual subjects introduced the notion of mandatory regulations, which, to a large degree, constituted the regulations and rules with a public interest aroma. ...Download file to see next pagesRead More