Chapter 42. Regulatory Theory

  1. Dennis Patterson Professor2,3,4
  1. Matthew D. Adler

Published Online: 27 JAN 2010

DOI: 10.1002/9781444320114.ch42

A Companion to Philosophy of Law and Legal Theory, Second edition

A Companion to Philosophy of Law and Legal Theory, Second edition

How to Cite

Adler, M. D. (2010) Regulatory Theory, in A Companion to Philosophy of Law and Legal Theory, Second edition (ed D. Patterson), Wiley-Blackwell, Oxford, UK. doi: 10.1002/9781444320114.ch42

Editor Information

  1. 2

    European University Institute, Florence, Italy

  2. 3

    Rutgers University School of Law, Camden, New Jersey, USA

  3. 4

    Swansea University, Wales, United Kingdom

Author Information

  1. Leon Meltzer Professor of Law, University of Pennsylvania Law School, Philadelphia, Pennsylvania, USA

Publication History

  1. Published Online: 27 JAN 2010
  2. Published Print: 19 MAR 2010

ISBN Information

Print ISBN: 9781405170062

Online ISBN: 9781444320114



  • regulatory theory - hardly a well-developed area of philosophical scholarship;
  • moral justification for regulation and morally optimal legal responses;
  • Stephen Breyer's Regulation and Its Reform - that “no serious effort is made to define ‘regulation’”;
  • instances of regulation - directives limiting air pollution, by environmental protection agencies;
  • licensure of pharmaceuticals by food-and-drug agency;
  • setting of permissible rates for firms;
  • regulation as nontax, noncriminal public law - legal directives by governmental bodies;
  • market failure framework;
  • concept of “externality”- concept's importance in theorizing regulation;
  • public goods and monopoly power


This chapter contains sections titled:

  • What I s Regulation?

  • How Should We Morally Evaluate Regulation? Welfarism; the Pareto Principle; Kaldor-Hicks Efficiency versus Social Welfare Functions

  • The Two Fundamental Theorems of Welfare Economics and the Market Failure Framework

  • Externalities

  • Public Goods and Monopoly Power

  • The Coase Theorem

  • Information and Paternalism as Rationales for Regulation

  • Regulatory Forms and Regulatory Choice Criteria

  • References