When Non-informational Regulation Matters

A look at the times where non-informational regulation may be important.

In an earlier post I claimed that informational regulations were sufficient. There are at least two examples of where they fail in the current system, however:

Low-competition fields
After-the-fact changes

If you can’t switch vendors, then the information won’t help you very much. It might spur a cooperative or new alternative to be created, but if the government is failing to prevent monopolies from existing, then that may be difficult to initiate. Changes to existing behaviors may also preclude information being sufficient, as well. For example, if you already bought a good and it is then revealed that there is a defect, you would be stuck with the good. Your recourse might be to file suit, but if you are left in a bad way until the resolution of such a suit, it would be very harmful. An injunction might bring relief. The question still remains, if one assumes an immaculate judicial system and that the government does actively work to keep barriers of entry low (eg, it doesn’t act in collusion with service providers to raise such barriers), would these problems go away? I believe they would, but will continue to examine the original claim and tune the full description and argument. Are there other circumstances that I’ve overlooked (I believe there’s at least one that slips my mind at the moment)?

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