Toward an Integrated Theory of Consumer Regulation

Abstract

This article examines a wide body of research concerning the process and effects of consumer regulation. Contributions from Economics, Sociology, Law and other areas are examined and four major theoretical approaches to regulation are presented. It is our position that none of them deals effectively with the consumer's viewpoint. For example, in the capture theory, the producer's interest (or that of any other interest group) dominates. Public interest theory fails to develop a mechanism that links theory and practice. The social control theory of regulation explicitly assigns power to the government to control consumers. Consumer protection theory suggests that there could be considerable potential for government abuse of power when it assumes a paternalistic role. What is needed is a consumer model of regulation that incorporates a non-paternal approach. Maintaining that the present approach of consumer research is too micro-empirically oriented, we propose a holistic approach that incorporates the goals of the government, industry and the consumer.