Industry Self-Regulation, Subversion of Public Institutions and Social Control of Torts
Posted: 17 Nov 2009
Date Written: November 17, 2009
We characterize the comparative efficiency of industry self-regulation as means of social control of torts. Unlike liability, which is imposed by courts ex post, industry self-regulation, much like government regulation, acts before the harm is done. As compared to government regulators, however, the industry regulates with superior information. Furthermore, a pro-industry bias inherent to self-regulation also arises under alternative institutional arrangements when adjudicators are vulnerable to pressure by industry members. We show when industry self-regulation is socially desirable and feasible, and clarify when it could be an attractive institutional arrangement for developing and transition countries.
Keywords: Industry self-regulation, social control of torts, institutional subversion, strict liability, government regulation, industry hazardness
JEL Classification: K13, K23, K42, L50, P50
Suggested Citation: Suggested Citation