The Institutional Dimension of Consumer Protection
NEW FRONTIERS OF CONSUMER PROTECTION: THE INTERPLAY BETWEEN PRIVATE AND PUBLIC ENFORCEMENT, Cafaggi & Micklitz, eds., 2009
17 Pages Posted: 7 Apr 2009 Last revised: 8 Apr 2009
Date Written: March 28, 2009
One of the central functions of the state is protecting the integrity of contracts such that markets and private ordering may thrive. As the scale and scope of markets change, so too must the role of the state in providing assurances against multiple forms of market malfunction. As the breadth of commercial activity expands and as exchange takes on forms unadorned by actual human contact, protecting consumers against harm becomes an essential prerequisite to the healthy functioning of markets.
Simply acknowledging the need to police markets and protect consumers is an important but limited first step. All reasonably developed societies do that in some fashion. What is of interest for us is how that is done and what forms of institutional arrangements follow from the array of choices that remain. In this chapter, we take up two topics: first, the typology of harm management itself. By dividing enforcement agents into "public" and "private," and the moments of enforcement into ex ante and ex post, it is possible to develop a typology.
Our main focus, however, is not so much on identifying the forms that regulation might take, but on the institutional demands made by these different modes of regulation. It is here that the temporal dimension emerges as critical. Each of the regulatory options must have its own supporting institutions and its own societal infrastructure to make it work. The choice of how to regulate harm ought to be as sensitive to what the tool requires as it is to the shape of the harm itself. These choices are about institutional design and competence as much as alleviation of substantive harm.
Our claim is not that a particular form of regulation is superior across all settings. Rather, it is that each regulatory strategy must ensure that the proper institutional actors are in place for its effective implementation.
Keywords: Regulation, Markets, Class Actions, Private Attorneys General, Consumer Protection
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