BRITISH PROFESSIONS TODAY: THE STATE OF ... - Property Week

Changing regulatory structures >>
When a system of multiple controls
works properly, no one controls an
agency, but it is ‘under control’.
Terry Moe, American Professor of Political Science, 1987
The balance between regulation and
representation is crucial to professional identity.
Organisational structure is a key prerequisite
to any definition of ‘profession’: “An obvious,
politically-based definition, albeit of little
normative value, would be to accept as
professions whatever occupations have been
successful in achieving self-regulating status”
(Trebilcock 1976: 9). The traditional view holds
that were it not for the self-regulatory role of
professional bodies, which forces them to set
high standards and a degree of disinterestedness,
a profession would be no different than a trade
union. Yet, we find evidence suggesting that
regulatory structures are changing, and that selfregulation
is now often measured in degrees. As
society becomes more fragmented, a “decentred”
understanding of regulation, considering the wide
range of different and often blurred regulatory
configurations diffused throughout society, may
become necessary.
2.1 Why regulate?
Correction of so-called ‘market failures’ emerges as the
most common answer to the question, “Why regulate?”
In economic terms market failures include: ‘information
asymmetry,’ ‘credence goods,’ and ‘externalities’:
> Information asymmetry refers to the disparity between
the information held by the service provider versus the
information held by the consumer. Information
asymmetry could lead to market failure where the former
has strong incentives to cut quality with a corresponding
reduction in price.
> Credence goods refers to the intangible nature of
professional services and the difficulty of ascertaining
quality before purchase. Consumers may not be able to
gauge the quality of the service that they have bought,
both due to information asymmetry and the often
ambiguous relationship between the quality of the service
provided and the outcome. The long time it takes for
some advice or services to register or bear fruit can also
be perplexing.
>
Externalities refers to the impacts (beneficial or adverse)
on third parties which arise from decisions made by
professionals and their clients (OFT 2001).
Regulation aims to remove these market failures at a
reasonable cost in order to improve the efficiency of markets
where trust, transparency and information disclosure are
extremely important.
British Professions Today: The State of the Sector © Spada Limited 2009 9