Abstract
The six chapters in this thesis all focus on regulation. Public and private interest theories of
regulation are used as a viewpoint and as an instrument to analyse and evaluate particular
regulations and policy developments. Furthermore, in the literature there is a debate about the
explanatory power and scientific status of public and
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private interest theories of regulation.
This thesis evaluates this debates and draws a number of conclusions on the merits and possible
applications of the public and private interest theories of regulation.
Chapter one presents a review and synthesis of the literature on the economic theories of regulation.
Chapter two applies the different theories of regulation to explain deregulation in the
Netherlands. Why was deregulation unsuccessful until the mid 1990s and why has the partial
or full deregulation of economic sectors become more common? Chapter three analysis the
regulation and self-regulation of physicians in the Netherlands in order to determine which of
the competing theories of regulation has the greatest explanatory power. Chapter four uses
public and private interest theories to explain reversed solidarity in pension plans in the Netherlands
and other countries. Why do blue-collar workers and women contribute to the pension
provisions for persons with a career path or white-collar workers, who are mostly men? Chapter
five analysis noncompetition clauses which are part of the labour contract for one in every
five employees in the Netherlands. After an evaluation of five theories explaining noncompetition
clauses, the conclusion is drawn that these clauses appear to prevent hold-up problems
and protect the creation and distribution of the surplus of the employment relationship.
Appraisals of public and private interest theories of regulation require criteria with which to
judge these theories. The criteria may be inferred from the methodology that is regarded appropriate
when conducting economic research. Basically, these criteria emanate from the demands
of logical and empirical consistency and the plausibility of theories. The evaluation of
public and private interest theories of regulation has made clear that an unambiguous ranking
of these theories in terms of the best in explaining regulations is (as yet) impossible. Much
theoretical and empirical work still needs to be done to understand how and why regulations
are chosen as the preferred instrument and why it takes one particular legal form or another.
The strength of the public and private interest theories of regulation lies more in their use as
juxtaposing and opposing frameworks of economic analysis rather than in being corroborated
theories. Furthermore, these theories may be useful not only for new theoretical developments
but also for their application to practical problems. As such they may be interpreted as a box
of tools in policy-making. More generally, the public interest theories may be applied to identify
possible causes of market failures and to summarize possible regulatory solutions, while
the private interest theories of regulation may be applied to do discover where proposed or
existing regulations are vulnerable to rent-seeking behaviour and may consequently display
possible unexpected side effects or inefficiencies.
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