Acting in the public interest – a framework for analysis - ICAEW

10. INVITATION TO COMMENTICAEW welcomes comments on the analysis in this report and the proposed framework.Readers are particularly invited to give their opinions on the assertions noted below, includingillustrative challenges and examples beyond those which we have noted.Comments on some of the assertions are likely to identify areas needing further review ofexisting knowledge or further research on specific issues. These and comments on othermatters will be taken into account in the further evolution of this framework.1. There is a public interest in people being allowed to go about their business.However, collective individual actions can result in an outcome which is not for thegreater good in aggregate, and so interference can sometimes be justified in thepublic interest, even if there is not an overall consensus.2. A detailed general definition of the public interest would not be helpful as individualcircumstances are too variable and detailed definitions would be likely to result inunintended consequences.3. ‘The public interest’ is often used without a clear understanding of why it is beingused, or sometimes as a smokescreen for other interests.4. We propose a framework that identifies a number of key questions to be addressedwhen justifying actions as being in the public interest. We believe it will assistin understanding both by those advocating a public interest measure and thoseassessing it.5. There are a number of threats to a public interest decision not actually being, or seento be, in the public interest. Examples include past behaviour, self-interest and lobbypressure. We suggest that safeguards should match the threat, for example acting onfeedback, transparency of process, oversight, and a sense check on understanding.6. We distinguish between matters which are in the public interest and matters in whichthe public is interested, arguing that the latter does not determine the former.7. Consideration of the public interest must mean being open to taking into accountthe interests of the global public. However, as a practical matter, not everyone willactually be affected by the matter at hand. The relevant public will be all those whowill be affected, or who have a legitimate remit to speak for those who are.8. There can be constraints to the public’s wants through, for example, self-interest,misinformation, and externalities. In addition, there may be overriding values, thoughthese should be transparent.9. In principle even small scale matters can be considered to be in the public interest,although in practice other decision-making objectives might be more suitable.10. A number of ways to deal with aggregation problems and conflicts are proposed.Many of these are variations or add-ons to utility theory and they include, forexample: weighting and rating; game theory; offsetting payments; Pareto optima;win-win solutions; and impact analysis, including contingent valuation.11. We note a number of potential approaches to implementation, summarised as ‘carrot,stick and sermon’. We suggest that the appropriate approach depends on; the likelyreaction by those affected, which is itself influenced by factors such as reputationof the proposer and closeness of the required behaviour to what self-interest woulddictate; the nature of the enforcing structure; and acceptability of alternativebehaviour.68Invitation to comment