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Public Interest Theory

posted 10 Jan 2011, 17:37 by Jess Maher
Public interest theory is an economic theory first developed by Arthur Cecil Pigou[1] that holds that regulation is supplied in response to the demand of the public for the correction of inefficient or inequitable market practices. Regulation is assumed initially to benefit society as a whole rather than particular vested interests.[citation needed] The regulatory body is considered to represent the interest of the society in which it operates rather than the private interests of the regulators.