For decades prior to the s, governments around the world increased the scope and magnitude of their activities, taking on a variety of tasks that the private sector previously had performed. In the United States, the federal government built highways and dams, conducted research, increased its regulatory authority across an expanding horizon of activities, and […]. In the United States, the federal government built highways and dams, conducted research, increased its regulatory authority across an expanding horizon of activities, and gave money to state and local governments to support functions ranging from education to road building. In Western Europe and Latin America, governments nationalized companies, whole industries, banks, and health care systems, and in Eastern Europe, communist regimes strove to eliminate the private sector altogether. Then in the s, the tide of public sector expansion began to turn in many parts of the world. In the functions that are privatized, they argue, the profit-seeking behavior of new, private sector managers will undoubtedly lead to cost cutting and greater attention to customer satisfaction.
Does Privatization Serve the Public Interest?
The Public Interest Theory of Regulation: Non-Existence or Misinterpretation? | SpringerLink
The Public Interest Theory of regulation explains, in general terms, that regulation seeks the protection and benefit of the public at large. This paper argues that possibly the Public Interest Theory does not exist as such for reasons that will be discussed later. In addition, the paper contends that the Stigler's and Posner's characterisation of the Public Interest Theory has similarities with the welfare economics rationale for regulation. Nevertheless, the similarities do not prove or deny a connection between both the concepts of public interest and the welfare economics rationale for regulation. This is a preview of subscription content, access via your institution. Rent this article via DeepDyve. Brass v North Dakota ex rel.
The Public Interest Theory of Regulation: Non-Existence or Misinterpretation?
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. Regulation means the employment of legal instruments for the implementation of socio-economic policy objectives, for example the government can establish economic and social regulations in order to realize goals like allocative efficiency, stabilization, or fair and just income distribution. In modern economies, the allocation of scarce resources is mainly coordinated by the market.
The public interest is "the welfare or well-being of the general public" and society. Economist Lok Sang Ho in his Public Policy and the Public Interest  argues that the public interest must be assessed impartially and, therefore, defines the public interest as the " ex ante welfare of the representative individual. This approach is " ex ante ", in the sense that the change is not evaluated after the fact but assessed before the fact without knowing whether one would actually benefit or suffer from it.