The occupations of regulators influence occupational regulation: evidence from the US private security industry

Abstract

Licensing requirements for US private security firms and guards differ substantially from state to state. State regulatory institutions for this industry also vary considerably. Some states have specialized regulatory boards with industry personnel (guards, firm owners) and/or public police as board members, while others rely on non-specialized regulators such as Departments of Commerce, State, Professional Regulation, or Consumer Affairs. These cross-state variations in licensing requirements and regulatory institutions provide an opportunity to explore relationships between the two. Private security regulation is of particular interest in this context because previous empirical research implies that allocating more resources to private security reduces crime, and that relatively stringent licensing requirements limit entry, thereby increasing crime. A panel of 1991–2010 state data is employed to see if particular regulatory institutions are associated with particular licensing requirements. Empirical results suggest that requirements for entry into this market tend to be relatively strict when active private security personnel are in control of licensing, and that different patterns of regulation generally apply when police or non-specialized agencies control licensing. Therefore, both public-interest and private-interest explanations for the observed relationships between the structure of regulatory institutions and resulting licensing requirements are discussed.