What Is Interest Group Theories Of Regulation Of Economists?

Economists who emphasize the anticompetitive aspect of regulation argue," you say the regulation is in the interest of consumers and workers. Don't believe it. Rather regulation is designed to boost the incomes of producers by limiting entry and preventing competition in the regulated industry. Any gins to consumers or workers are purely incidental."
The historical record shows that there is much truth to this view. Fro example numerous economic studies of regulation have shown that regulation often keeps prices high. For many years, trucking companies and airlines had to get permission before lowering prices or entering new markets. Other types of regulation also have the effect of limiting competition. For example, high standards for new drugs mean that the process of getting regulatory approval is lengthy and expensive. That keeps out many smaller companies, which cannot afford the years of testing that a new drug requires.
The most recent example of a regulatory program benefiting the industry at the expense of taxpayers came in the savings and loan industry. The federal program of deposit insurance was established in the 1930s to help restore confidence and prevent bank panics. By the early 1980s, however, it became clear that the program was poorly designed.

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