reading # 9

reading # 9 - Designing Cartels 1 June 2006 How Industry...

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1 Designing Cartels June 2006 How Industry Insiders Cut Out Competition By Dick M. Carpenter II, Ph.D. The Institute for Justice November 2007 Designing Cartels:
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1 Designing Cartels How Industry Insiders Cut Out Competition Designing Cartels: 901 N. Glebe Road, Suite 900 Arlington, VA 22203 (703) 682-9320 www.ij.org By Dick M. Carpenter II, Ph.D. The Institute for Justice November 2007 | Second Edition
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2 Designing Cartels This report examines titling laws, little-known regulations that require people practicing certain professions to gain government permission to use a speciFc title, such as “interior designer,” to describe their work. Although titling laws receive little attention from the political, policy or research communities, they often represent the Frst step toward a better-known regulation—occupational licensing, which limits who may practice a trade. In theory, occupational regulations—including titling and licensing laws—are designed to protect the safety and economic interests of consumers. But critics charge they are often nothing but anti-competitive barriers that only beneFt those already practicing. Twenty-two states have some kind of titling law for interior designers, and three states and the District of Columbia also require aspiring designers to acquire government licenses to practice. For decades, powerful factions within the interior design industry have lobbied for legislatures to impose increasingly stringent regulations, arguing that interior design requires a minimum amount of education, experience and examination, codiFed by the government, to ensure public health, safety and welfare. The results of this case study, however, indicate that there is no threat to public health, safety or welfare requiring government regulation of the interior design industry. Between 1988 and 2005, Fve state agencies examined the need for titling and/or licensing laws for interior designers. All Fve found no beneFt to the public and concluded consumers already possessed the means to make informed decisions about interior designers. When pressed by state agencies, not even interior design associations lobbying for regulation produced evidence of a threat to the public from unregulated designers. Consumer complaints about interior designers to state regulatory boards are extremely rare: Since 1998 an average of one designer out of every 289 has received a complaint for any reason. Nearly all of those complaints, 94.7%, concern whether designers are properly licensed—not the quality of their service. Complaints about service and non-licensure crimes are even more rare: an average of one out of every 5,650 designers since 1998. Interior design companies receive very few consumer complaints—an average of less than one-third of one complaint per company over the past three years, according to nationwide Better Business Bureau data.
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reading # 9 - Designing Cartels 1 June 2006 How Industry...

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