Regulation consists of the imposition of economic controls by government agencies on private business or on individual behavior. Deregulation then consists of the elimination or the loosening of these controls. The focus here is on one kind of regulatory activity, and its demise, namely on controls aimed at affecting the entry and exit of firms into and out of an industry and the prices charged to consumers of that industry's goods or services.

A significant (aging and largely discredited) literature devotes itself to public interest explanations of regulatory and deregulatory activities, based on Paretian welfare economics, buttressed by the potential compensation test for efficiency in cost-benefit analysis. This entry ignores the public interest approach and focuses attention instead on modern private interest theories of regulation and ...

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