IDEAS home Printed from https://ideas.repec.org/a/bla/ecaffa/v42y2022i1p30-49.html
   My bibliography  Save this article

Private regulation versus government regulation: The example of financial markets

Author

Listed:
  • Philip Booth

Abstract

Economists generally study financial regulation in a ‘market failure’ context. Market failures, as defined in undergraduate textbooks, are identified and government action is proposed to remedy those failures. Quite apart from objections to the market‐failure model that can come from many perspectives, this approach ignores the ways in which regulatory institutions can develop within financial markets. Indeed, such institutions were the norm in the UK until the mid‐1980s, and they still exist today. This article proposes that economists should take this observed reality into account. When considering the appropriateness of government intervention, they should first study the relative advantages and disadvantages of private and government regulation.

Suggested Citation

  • Philip Booth, 2022. "Private regulation versus government regulation: The example of financial markets," Economic Affairs, Wiley Blackwell, vol. 42(1), pages 30-49, February.
    • Handle: RePEc:bla:ecaffa:v:42:y:2022:i:1:p:30-49
    DOI: 10.1111/ecaf.12512
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecaf.12512
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecaf.12512?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Elinor Ostrom, 2010. "Beyond Markets and States: Polycentric Governance of Complex Economic Systems," American Economic Review, American Economic Association, vol. 100(3), pages 641-672, June.
    2. Bellis, C.S., 2000. "Professions in Society," British Actuarial Journal, Cambridge University Press, vol. 6(2), pages 317-364, August.
    3. Ryan Bourne, 2019. "‘Market failure’ arguments are a poor guide to policy," Economic Affairs, Wiley Blackwell, vol. 39(2), pages 170-183, June.
    4. Booth, P.M., 1997. "The Political Economy of Regulation," British Actuarial Journal, Cambridge University Press, vol. 3(3), pages 675-707, August.
    5. Stringham, Edward Peter, 2015. "Private Governance: Creating Order in Economic and Social Life," OUP Catalogue, Oxford University Press, number 9780199365166.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Trent J. MacDonald, 2019. "The Political Economy of Non-Territorial Exit," Books, Edward Elgar Publishing, number 18871.
    2. Darcy W E Allen, 2020. "When Entrepreneurs Meet:The Collective Governance of New Ideas," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number q0269, January.
    3. March, Raymond J., 2017. "Skin in the game: comparing the private and public regulation of isotretinoin," Journal of Institutional Economics, Cambridge University Press, vol. 13(3), pages 649-672, September.
    4. Palagashvili,Liya & Piano,Ennio & Skarbek,David, 2017. "The Decline and Rise of Institutions," Cambridge Books, Cambridge University Press, number 9781316649176.
    5. ., 2019. "Economic theory of non-territorial unbundling," Chapters, in: The Political Economy of Non-Territorial Exit, chapter 1, pages 14-38, Edward Elgar Publishing.
    6. Eloi Laurent & Jean Jouzel, 2018. "The Well-being Transition: Measuring what counts to protect what matters," Sciences Po publications 35, Sciences Po.
    7. Moeliono, Moira & Brockhaus, Maria & Gallemore, Caleb & Dwisatrio, Bimo & Maharani, Cynthia D. & Muharrom, Efrian & Pham, Thuy Thu, 2020. "REDD+ in Indonesia: A new mode of governance or just another project?," Forest Policy and Economics, Elsevier, vol. 121(C).
    8. Górriz-Mifsud, Elena & Olza Donazar, Luis & Montero Eseverri, Eduardo & Marini Govigli, Valentino, 2019. "The challenges of coordinating forest owners for joint management," Forest Policy and Economics, Elsevier, vol. 99(C), pages 100-109.
    9. McCloskey Deirdre Nansen, 2018. "The Two Movements in Economic Thought, 1700–2000: Empty Economic Boxes Revisited," Man and the Economy, De Gruyter, vol. 5(2), pages 1-20, December.
    10. Martin G. Kocher & Fangfang Tan & Jing Yu, 2018. "Providing Global Public Goods: Electoral Delegation And Cooperation," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 381-397, January.
    11. Jorge M. Streb & Gustavo Torrens, 2011. "Meaningful talk," CEMA Working Papers: Serie Documentos de Trabajo. 443, Universidad del CEMA, revised May 2017.
    12. Andy Gouldson & Rory Sullivan, 2014. "Understanding the Governance of Corporations: An Examination of the Factors Shaping UK Supermarket Strategies on Climate Change," Environment and Planning A, , vol. 46(12), pages 2972-2990, December.
    13. David Klenert & Franziska Funke & Linus Mattauch & Brian O’Callaghan, 2020. "Five Lessons from COVID-19 for Advancing Climate Change Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 751-778, August.
    14. Allen, Darcy W.E. & Berg, Chris & Markey-Towler, Brendan & Novak, Mikayla & Potts, Jason, 2020. "Blockchain and the evolution of institutional technologies: Implications for innovation policy," Research Policy, Elsevier, vol. 49(1).
    15. Thomas Vendryes, 2014. "Peasants Against Private Property Rights: A Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 971-995, December.
    16. Michael Peneder & Spyros Arvanitis & Christian Rammer & Tobias Stucki & Martin Wörter, 2022. "Policy instruments and self-reported impacts of the adoption of energy saving technologies in the DACH region," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(2), pages 369-404, May.
    17. Meyer, Camille, 2020. "The commons: A model for understanding collective action and entrepreneurship in communities," Journal of Business Venturing, Elsevier, vol. 35(5).
    18. Haucap, Justus, 2017. "The rule of law and the emergence of market exchange: A new institutional economic perspective," DICE Discussion Papers 276, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    19. Hervé Charmettant & Yvan Renou, 2021. "Cooperative conversion and communalization: Closely observed interactions between the material and the mental," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(1), pages 55-77, March.
    20. Sophie King & Peter Kasaija, 2018. "State-movement partnership in Uganda: Co-producing an enabling environment for urban poverty reduction?," Global Development Institute Working Paper Series esid-098-18, GDI, The University of Manchester.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecaffa:v:42:y:2022:i:1:p:30-49. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0265-0665 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.