Public interest theory

Public interest theory

Public interest theory is an economic theory holding that regulation is supplied in response to the demand of the public for the correction of inefficient or inequitable market practices. Regulation is assumed initially to benefit society as a whole rather than particular vested interests. The regulatory body is considered to represent the interest of the society in which it operates rather than the private interests of the regulators.

Assumptions

This theory assumes that economic markets are extremely fragile and apt to operate very inefficiently (or inequitably) if left alone. The government regulation is virtually costless. The government is assumed to be a neutral arbiter.

Criticisms

Critics believe this will only occur when the public demands a better allocative efficiency.Most legislatures do things to benefit themselves, not the public. Therefore their must be an interest of law-makers for regulation to occur. This "theory" has no testable predictions or outcomes, therefore it is viewed by many as not a real theory.

References


Wikimedia Foundation. 2010.

Игры ⚽ Поможем написать курсовую

Look at other dictionaries:

  • Public choice theory — Public choice in economic theory is the use of modern economic tools to study problems that are traditionally in the province of political science. (A more general term is political economy , an earlier name for economics that evokes its… …   Wikipedia

  • Public law — is a theory of law governing the relationship between individuals (citizens, companies) and the state. Under this theory, Constitutional law, administrative law and criminal law are sub divisions of public law. This theory is at odds with the… …   Wikipedia

  • Public administration — can be broadly described as the development, implementation and study of branches of government policy. Public administration is linked to pursuing the public good by enhancing civil society and social justice. Though public administration has… …   Wikipedia

  • public health — public health, adj. health services to improve and protect community health, esp. sanitation, immunization, and preventive medicine. [1610 20] * * * Science and art of preventing disease, prolonging life, and promoting health through organized… …   Universalium

  • Public management — considers that government and non profit administration resembles private sector management in some important ways. As such, there are management tools appropriate in public and in private domains, tools that maximize efficiency and effectiveness …   Wikipedia

  • Public — is of or pertaining to the people; relating to, or affecting, a nation, state, or community; opposed to private; as, the public treasury, a road or lake. Public is also defined as the people of a nation not affiliated with the government of that… …   Wikipedia

  • Public ownership — (also called government ownership, state ownership or state property) refers to government ownership of any asset, industry, or corporation at any level, national, regional or local (municipal); or, it may refer to common (full community) non… …   Wikipedia

  • interest group — a group of people drawn or acting together in support of a common interest or to voice a common concern: Political interest groups seek to influence legislation. [1905 10] * * * ▪ political science Introduction also called  special interest group …   Universalium

  • Public good — For the egalitarian terms, see Common good and Public interest. In economics, a public good is a good that is nonrival and non excludable. Non rivalry means that consumption of the good by one individual does not reduce availability of the good… …   Wikipedia

  • Public sphere — A coffeehouse discussion …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”