Regulated market
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A regulated market (RM) or coordinated market is an idealized system where the government or other organizations oversee the market, control the forces of
One of the reasons for regulation can be the importance of the regulated activity – meaning the harm suffered should the industry fail would be so fatal that
A variety of forms of regulations exist in a regulated market. These include controls,
In a regulated market, the government regulatory agency may legislate regulations that privilege
Changes in regulation
Regulation is subject to changes over time, due to both technological advances as well as the change in attitude towards regulation in general. An example for industries that are no longer regulated is the rail service or airlines in the US. On the other hand, there are also industries that did not need regulation in the past, but are in need of it now. This includes for example the real estate market.
Another category are the markets that encountered major changes in regulatory approaches due to various crises. A prime example are stock exchanges following stock market crashes.[2]
The practice of regulating markets dates back centuries when ancient societies relied on standardised weights and measurements and practised punishment for theft and fraud. For the most part, market regulations have been imposed by the central governments and to a lesser extent by interest groups. One notable example of such interest groups is medieval guilds. They were associations of merchants and artisans that controlled the practise of their profession in their particular area. Guilds defined requirements for practising their profession, which usually meant that only guild members could practise their profession or sell their goods within their city. Since the beginning of the 20th century, labour groups at times have had regulatory roles in some markets.
Controversy
Generally, regulation is a very polarising issue. Those who are in favour of regulating usually see it as beneficial to the wider society. This has to do for example with regulations targeting
Examples of regulatory bodies
- Food and Drug Administration (FDA)
- Securities and Exchange Commission (SEC)
- Environmental Protection Agency (EPA)
See also
- Better Regulation Commission
- Bureaucracy
- Code of Federal Regulations
- Deregulation
- European Union directive
- European Union regulation
- Free market
- Mixed economy
References
- ^ a b c d Encyclopedia of Management, Pennsylvania State University, Gale, 2009, p. 31.
- ^ a b c "Regulatory (Regulated, Controlled) Market". capital.com. Retrieved 2020-04-24.
- ^ Kenton, Will. "What is a Regulated Market?". Investopedia. Retrieved 2020-04-24.