Theoretical Aspects of Regulation
Public Interest Theories
The purpose of the regulation is to achieve certain publicly desired results in circumstances where the market would fail to yield these (market failure).
Interest Group Theories
The regulatory developments are driven by the pursuit of public interest but by particularistic concerns of interest groups. This approach has most prominently been associated with the so-called 'economic theory of regulation'. The economic theory of regulation builds on the assumption that actors are inherently self-regulatory and orientated at maximizing their own (material) interest.