Suppose a regulatory agency makes decisions that seem to require an ever-growing agency budget and staff of regulators to monitor firms and enforce the decisions. This would be evidence in support of the __________ theory of regulation.

Question

Quizplus · Accepted Answer

The public choice theory of regulation suggests that regulatory agencies are motivated by their own self-interests, such as budget maximization and staff expansion, rather than solely by the public interest. This theory posits that regulators may make decisions that require more resources and personnel to enhance their power and influence, rather than to efficiently and effectively serve the public.

Suppose a Regulatory Agency Makes Decisions That Seem to Require