Book contents
- Frontmatter
- Contents
- Acknowledgments
- Contributors
- Introduction
- SECTION I BEYOND MARKET FAILURE
- 1 Government Failure vs. Market Failure: Principles of Regulation
- 2 Effective Regulation through Credible Cost-Benefit Analysis: The Opportunity Costs of Superfund
- 3 From “State Interference” to the “Return to the Market”: The Rhetoric of Economic Regulation from the Old Gilded Age to the New
- 4 Lessons from Europe: Some Reflections on the European Union and the Regulation of Business
- 5 Confidence Games: How Does Regulation Constitute Markets?
- SECTION II BEYOND THE ECONOMIC THEORY OF POLITICS
- SECTION III BEYOND COMMAND AND CONTROL
- Conclusion
- Index
- References
1 - Government Failure vs. Market Failure: Principles of Regulation
Published online by Cambridge University Press: 20 January 2010
Book contents
- Frontmatter
- Contents
- Acknowledgments
- Contributors
- Introduction
- SECTION I BEYOND MARKET FAILURE
- 1 Government Failure vs. Market Failure: Principles of Regulation
- 2 Effective Regulation through Credible Cost-Benefit Analysis: The Opportunity Costs of Superfund
- 3 From “State Interference” to the “Return to the Market”: The Rhetoric of Economic Regulation from the Old Gilded Age to the New
- 4 Lessons from Europe: Some Reflections on the European Union and the Regulation of Business
- 5 Confidence Games: How Does Regulation Constitute Markets?
- SECTION II BEYOND THE ECONOMIC THEORY OF POLITICS
- SECTION III BEYOND COMMAND AND CONTROL
- Conclusion
- Index
- References
Summary
The subject of regulation has been one of the most contentious, with critics arguing that regulations interfere with the efficiency of the market, and advocates arguing that well-designed regulations not only make markets more efficient but also help ensure that market outcomes are more equitable. As the economy plunged into a recession, with more than 3 million Americans already having lost their homes as this chapter goes to press and millions more likely to do so (unless the government intervenes more successfully than it has), and as the government spends hundreds of billions in bailouts to prevent the economic recession from growing worse, there is a growing consensus: There was a need for more government regulation. Even the high priest of laissez faire economics, Alan Greenspan, has admitted that he may have gone too far in believing that markets could be self-regulating.
Responding to these calls – as if to close the barn door after all the horses have gotten out – the Federal Reserve has tightened some regulations. If it is the case that better regulations could have prevented, or even mitigated, the downturn, the country, and the world, will be paying a heavy price for the failure to regulate adequately. And the social costs are no less grave – as hundreds of thousands of Americans will not only have lost their homes but also their lifetime savings.
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- Government and MarketsToward a New Theory of Regulation, pp. 13 - 51Publisher: Cambridge University PressPrint publication year: 2009
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