Rethinking the role of the Regulatory State

Public Choice Theory in promoting freer markets

Resumen

[Purpose] This article investigates the role of Public Choice Theory in reassessing economic regulation models and its influence on promoting freer markets.

[Methodology/approach/design] Based on the assumption that public agents respond to personal and institutional incentives, the theory challenges the traditional view that regulation is always guided by the public interest. By analyzing the incentives of political agents, the theory reveals limitations of traditional regulatory models and alternatives for a more efficient and transparent approach. It explores how government failures, including regulatory capture and excessive bureaucracy, limit the efficiency of public policies and distort markets.

[Results] It is concluded that the application of this approach allows for the construction of more transparent and effective regulations that favor the development of freer markets, promoting competition and efficiency.

[Practical implications] By analyzing the incentives and behaviors of political and economic agents, it allows for the identification and correction of dysfunctions in regulatory mechanisms, promoting greater efficiency. The article proposes a reformulation of the regulatory State, aiming to minimize state intervention, strengthen market mechanisms and promote a more competitive business environment.