Public Interest Theory

Public Interest Theory is a concept in regulatory economics that suggests regulations should be designed to serve the public good, rather than special interests. It argues that industries often require oversight to prevent exploitation, uphold safety standards, and ensure fair competition. By regulating practices, the government seeks to protect consumers, promote welfare, and maintain a balance in the market. Essentially, the theory posits that regulations exist to align private actions with societal benefits, ensuring that businesses operate in ways that are fair and beneficial to the community as a whole.