ABSTRACT
The public distrust of both big business and big government led, quite logically, to the creation of an independent regulatory commission, the Interstate Commerce Commission, composed of apolitical experts who would use fair, judicial-like procedures to restrain unethical behavior in the private sector and protect the public interest. The concept of market failures which generated the rationales for regulation also provides the theoretical underpinnings for the public interest approach to regulation. Regardless of which theory of regulation one ascribes to, the empirical evidence from over four decades of research strongly supports the position that economic regulation has failed to accomplish many of the objectives for which it was established. Other structural reforms are directed toward the selection and motivation of the regulators. Substantive regulatory reforms strike at the heart of the underlying rationales for and objectives of economic regulation. A. E. Kahn contends that an incremental approach to deregulation makes the transition more difficult.
