The Politics of Regulation

Abstract

This chapter discusses the political sources of regulation should provide some clues as to the circumstances under which the regulated industry will become the client of the regulatory agency. The political circumstances under which business regulation occurs must be distinguished from those economic factors that may or may make such regulation desirable. The view taken here is that regulatory laws can have a variety of political causes and that it is necessary, in order to understand why regulation occurs, to specify the circumstances under which one or another cause will be operative. Interest-group activity intensifies when the associations confront a visible, direct, and immediate threat to their values. In addition to serving as a source of assumed threats or deprivation, there is a second way in which costs and benefits affect regulatory politics, and that has to do with the extent to which they are concentrated.