Sam Peltzman's paper "Toward a More General Theory of Regulation" builds on George Stigler's work on regulatory theory, extending and generalizing it to provide a broader framework for understanding regulation. Stigler's original work focused on the role of regulation in economic analysis, emphasizing its limitations and the influence of political processes on regulatory outcomes. Peltzman argues that Stigler's model, while influential, is limited in scope and that a more comprehensive theory is needed to explain the dynamics of regulation. Peltzman's model treats regulation as a political process where the primary goal is to maximize the majority of voters. He introduces a framework where regulatory decisions involve a transfer of wealth, with the regulator seeking to maximize the majority in favor of a specific group. The model considers the costs and benefits of regulation, including the costs of organizing support and the costs of opposition. It also incorporates the idea that regulatory outcomes are influenced by the size and characteristics of the groups involved, with smaller, more concentrated groups often having more influence due to their higher per capita stakes. The paper highlights that regulation is not merely about correcting market failures but also about redistribution of wealth. It argues that regulatory agencies are not solely serving the interests of a single economic group but are influenced by political pressures and the dynamics of group size and organization. Peltzman's model shows that the size of the dominant group is limited by the costs of organizing support and the costs of opposition, leading to a situation where smaller, more concentrated groups have more influence. The paper also discusses the implications of these findings for price and entry regulation, showing that regulatory outcomes can be influenced by the structure of the political process and the characteristics of the groups involved. It concludes that regulation is a complex process influenced by both economic and political factors, and that a more general theory is needed to fully understand its dynamics. Peltzman's work provides a more comprehensive framework for analyzing regulation, emphasizing the role of political processes and the influence of group size and organization in shaping regulatory outcomes.Sam Peltzman's paper "Toward a More General Theory of Regulation" builds on George Stigler's work on regulatory theory, extending and generalizing it to provide a broader framework for understanding regulation. Stigler's original work focused on the role of regulation in economic analysis, emphasizing its limitations and the influence of political processes on regulatory outcomes. Peltzman argues that Stigler's model, while influential, is limited in scope and that a more comprehensive theory is needed to explain the dynamics of regulation. Peltzman's model treats regulation as a political process where the primary goal is to maximize the majority of voters. He introduces a framework where regulatory decisions involve a transfer of wealth, with the regulator seeking to maximize the majority in favor of a specific group. The model considers the costs and benefits of regulation, including the costs of organizing support and the costs of opposition. It also incorporates the idea that regulatory outcomes are influenced by the size and characteristics of the groups involved, with smaller, more concentrated groups often having more influence due to their higher per capita stakes. The paper highlights that regulation is not merely about correcting market failures but also about redistribution of wealth. It argues that regulatory agencies are not solely serving the interests of a single economic group but are influenced by political pressures and the dynamics of group size and organization. Peltzman's model shows that the size of the dominant group is limited by the costs of organizing support and the costs of opposition, leading to a situation where smaller, more concentrated groups have more influence. The paper also discusses the implications of these findings for price and entry regulation, showing that regulatory outcomes can be influenced by the structure of the political process and the characteristics of the groups involved. It concludes that regulation is a complex process influenced by both economic and political factors, and that a more general theory is needed to fully understand its dynamics. Peltzman's work provides a more comprehensive framework for analyzing regulation, emphasizing the role of political processes and the influence of group size and organization in shaping regulatory outcomes.