Public interest theory (economics)

Public interest theory in economics suggests that government regulation and policies are designed to serve the collective good of society. It posits that policymakers act in ways that align with the broader interests of the public, correcting market failures and ensuring fair competition, safety, and welfare. Essentially, it assumes that government actions are motivated by the goal of benefiting society as a whole, rather than personal or special interests. This theory underscores the belief that well-designed regulation helps address issues like monopolies, externalities, and information asymmetries to promote economic efficiency and social justice.