Government’s Regulatory Role on

Businesses and Individuals

PA 301
Government’s Relationship
with Private Business
• Philosophy #1: The prosperity of business is
essential to our country’s general well-being and
therefore promoting businesses is a public
purpose

• Philosophy #2: Businesses will always focus on

their own profits and success and as a result,
they must be prevented from harming the public
interest
Regulation (Defined)
• Regulation is the process by which government
requires, prohibits or structures certain actions by
individuals and organizations. The activity entails
both deciding what actions will be covered by law
and enforcing those rules

• Regulations are laws developed by law makers at all

levels of government
Why are there regulations and
why should we care?
• Our society would be very chaotic without any types
of rules or restrictions on enterprise or individuals
• Market Failure: Undesirable social and economic impacts
on a freely operating business system
• As Criminal Justice and Public Administration
students, you will likely spend your career in public
service enforcing laws (regulations)
• Policy is codified into law that “street level
bureaucrats” enforce each day (municipal code,
State Penal Code, Welfare and Institutions Code, etc)
Rationales for Regulations
• Protect Competition
• Monopolies or unfair business practices like price-fixing can
result in serious consequences for individual members of
society and the economy
• Supervise Natural Monopolies
• Businesses that are granted exclusive rights to provide a
particular service, but are heavily regulated
• Inform/Protect Consumers
• Government plays the role of a “super consumer” by
testing goods and services, providing information for
informed choices or banning products from the market
deemed unsafe
Rationales for Regulations (Cont’d)

• Minimize Negative Externalities

• Regulations mandate that businesses internalize costs
or harms
• Protect Employees
• Regulations mandate fair wages and workplace safety
• Promote Steady Economic Growth
• Regulations take the edge off the market’s extreme
highs and lows in concert with basic economic theories
Regulation: How much is too much?
• Law makers need to consider many issues when
developing regulations (i.e. balancing the spirit of the
legislation with the needs of business enterprise and
personal liberties)

• Deregulation is the process of reducing the regulatory

burden on business, either across the board or in specific
sectors, by modifying or eliminating certain rules
deemed to be contrary to the public interest

• “Nanny State”: Pejorative (negative) term used to

describe too much government involvement in our lives
Reflection:
Regulations: Personal Decisions/Freedoms
• After reviewing the video concerning New York City’s
proposed ban on large surgery drinks:
• Does this fit the definition of a “nanny state” policy?
• As this policy was proposed, do you believe this restriction on
personal freedoms would have resulted in achievement of the
policy goal (reducing obesity)?

• After reviewing the video on the implementation of the 2010

Healthy, Hunger-Free Kids Act:
• What are the unintended consequences of the revised
regulations on school lunches?
• Based on these reports, is the public policy meeting its goals?
• What challenges did this “top down” approach of policy
implementation cause for school districts?
Lecture Summary
• Regulation is the process by which government requires,
prohibits or structures certain actions by individuals and
organizations
• Our society would be very chaotic without any types of
rules or restrictions on enterprise or individuals
• As PA/CJ students, it is important to understand
government’s regulatory role as you will likely spend your
career in public service enforcing laws (regulations)
• Our personal ideologies influence our beliefs on
government’s regulatory role (i.e. “good” consumer
protection vs. nanny state)
• Government’s role in regulating the activity of individuals
and businesses is a continuous political and policy debate
at all levels of government