Shifting Alliances in the Accreditation of Higher Education: On the ...

Introduction
CHAPTER TWO: OF GOVERNANCE AND REGULATION
The United States, along with much of the rest of the world, is experiencing a
period during which government regulation is often accused of being inefficient, limiting
economic growth, and obstructing entrepreneurship and innovation. The success of this
critique—part of a larger neo-liberal economic doctrine—combined with the massive
challenges faced by government agencies in a time of tremendous technological change
and internationalization, has led to a substantial rise in government‘s reliance on private
self-regulation and other forms of private governance.
Toward better understanding the reasons underlying the delegation of government
authority to self-regulating organizations, this section begins with a very brief description
of the market system. By considering the problems inherent in an idealized market
system, one in which there is a complete lack of regulation, this chapter then sets up the
justifications that are commonly given for government regulation. Alternative theories of
government regulation are then considered, including private interest theory and capture
theory. After discussing the potential weaknesses of government regulation, self-
regulation is then presented as a possible alternative. The significance of the distinction
between professions and industries is considered, and the implications of those
13