Economic Theory of Regulation

The Economic Theory of Regulation suggests that government regulations are often shaped by the interests of certain groups rather than the public good. It posits that businesses or industries may seek to influence lawmakers to create rules that benefit them, which can lead to monopolies or protect established companies from competition. This theory highlights the idea that regulations can serve as tools for private interests rather than true market fairness, and it emphasizes the need for ongoing scrutiny to ensure regulations ultimately serve the broader public interest.