Document Type : Original Article
Highlights
According to theories of public interest, government regulation is one of the methods to achieve efficiency by fair distribution of resources, as an legal instrument to ensure and encourage public welfare, to correct market failures, externalities, monopoly, or Market imbalance. By this way also public goods will be produced and the failure of incomplete or asymmetric information in the market will be resolved. Therefore, with regulations, distribution can be modified by facilitating, maintaining and accelerating market activity. According to this view, the exchange of goods and the guarantee of property rights and the execution of contracts are better and more efficiently organized in the collective and public system than in the individual and private systems. And market transaction’ costs are reduced.In general, these theories are divided into two groups: one group that pays attention only to economic efficiency and considers the goals of regulatory regulations to achieve economic efficiency, and the other group also pursues political goals. The theory of public interest has been criticized both theoretically and practically. Critics believe that in practice the market mechanism itself is able to compensate for any inefficiency. For example, the problem of "unfavorable choice" can be solved with advanced mechanisms such as guarantees and extensive advertisements that indicate the quality of the product. Also, some public goods such as street lighting, education, entertainments can be provided by the private sector. Practical research on the effectiveness and efficiency of government’ regulation has also criticized the theory of public interest. For example, research shows that the effects of regulations on matters of natural monopoly goods, such as the effects of price regulations on electricity producers, have been negligible. Also, regulating competitive sectors such as air and sea transport will increase prices. Private interest theory sees regulation as the result of competition between rent-seeking interest groups and selfish influence in legislation. In those political and legislative processes, these interest groups play a role in securing their interests in legislation. Theories of private interest are largely explanatory in nature, explaining how and why regulations arise. Some theories of private interest may prescriptively seek to assess whether the results obtained are economically viable. It is commonly observed that the resources allocated to win the game of regulation often lead to economic waste. And are therefore socially unproductive. This theory has also been criticized in some ways. First, this theory is not entirely distinguishable from the public interest theory. Because this theory also assumes that the theory of public interest has been the starting point for attention to regulation. On the other hand, it does not specify why a group or branch of industry has been successful in imposing its group interests on the regulator, but it could not have prevented regulation. Second, there are more regulations that serve the interests of consumer groups rather than securing parts of the industry. Third, most regulations, such as environmental regulations, safety and production regulations, and occupational safety conditions, are not only in the interests of companies but also against their interests. In Institutionalist Theory, both private and public interests are considered, and the role of institutions in enforcing regulations is considered. These include markets, families, market, and the like. In addition to personal and group self-interest motives, this view also considers the role of institutions in the development and functioning of regulation and considers the set of social, economic and cultural factors, in other words, time and place factors in economic and legal affairs. According to this view, intra-group motivations can also be in the public interest and in the service of society.
These theories define any justification for the rules. The rules should be in the public interest. Regulations should encourage and protect the interests of economic elites whose efforts and creativity lead to the development of the economy, but it is necessary to prevent the formation of any kind of monopoly by imposing restrictions. In short, the concept of public interest should be redefined to reflect the interests of all private groups, especially the elite, the functioning of institutions and the public interest. If the regulations are applied in the interests of special groups and the public interests are ignored, it is the responsibility of the regulator.
One of the ways to achieve efficiency in the market and fair distribution of resources and eliminate market failures is government regulation and as a instrument to overcome monopoly and create fair competition in the market. If the regulation becomes ineffective or becomes the monopoly of influential groups, the solution to the failure of the regulation is not to remove it, but to amend it and make reforms in the regulatory authorities. On the other hand, many of the implementing regulations in our country are translations of regulations related to other countries. Obviously, what creates public interest varies according to the specific time, place and values of a particular society. Therefore, in order to achieve the public interest in our country, regulations must be formed according to the time, place and specific values of our society. In Iranian economic and legal system, a new situation is taking place. With the privatization agenda, the regulations must be revised in accordance with the new conditions and meet the government's goals in the social, economic and legal fields. Therefore, the principles of regulation should be carefully reviewed and reconstructed in accordance with the specific conditions of each area. It is obvious that strengthening and defining the exact basis of the rules and regulations can free the system of governing the country in all fields from dispersion, aimlessness, confusion. It should be created a system in accordance with the goals of the constitution and in accordance with modern time, economic and social conditions and values.
