The Role of Private Sector Organizations in Regulating Economic Affairs: Past Pathology and Looking Ahead

What is the role of private sector in regulating economic activities and how should be established its relationship to the government? Experiences of five Business Membership Organizations (BMOs) show that the transfer of some regulatory affairs to this sector has not been successful; including regulating entrance to and exit from the markets, assigning authority of conflict settlement to one side of the conflict, and regulating prices in sensitive markets that have been needed to pricing yet. But 1) assigning consultative role for the private sector leads to improve the quality of decision making 2) Enhancing scientific capacity and expertness of private sector organizations has significant role in recognizing the main problems of members; informing decision makers about members’ demands and recommending solutions to policy makers. Moreover to be effective, BMOs should avoid from compulsory membership and rely on high quality services to attract new members. Overall, these evidences corroborate (not prove) this fundamental hypothesis: utilizing capacities of BMOs are useful when they function to reinforce and complement the markets, and are harmful when they redistribute welfare for their benefit.