In the post on free markets, Walter Sylesh asked:

How do we understand the role of regulators such as Securities Exchange Board of India (the Indian equivalent of SEC), Competition Commission of India among others in enhancing ( or degrading) free markets? The justification of their existence is an additional criteria to “free markets” that are referred to as “fairer markets”. Is that mere rhetoric or is there merit to their existence?

Regulatory institutions are fairly common. Examples are SEC of the US, and SEBI and CCI of India which Walter mentions. The primary justification, as implied by the word, is to oversee the relevant industry to ensure that the firms in the industry play fair and according to the rules that the regulatory agency sets. Continue reading “Regulation”