ETHICS AND PUBLIC-POLICY ANALYSIS - STAKEHOLDERS INTERESTS AND REGULATORY POLICY

This article asserts the need for the ethical analysis of regulatory p olicy. The article explores the conventional wisdom surrounding the pr oper role of government, the function of law, the role of lawmakers, t he nature of business, and the relationship between business and gover nment. It is the traditional thinking regarding these fundamental aspe cts of our social life which creates barriers to the ethical analysis of regulatory policy. It is argued that, in spite of the persistence o f agency theories of the firm, a stakeholder theory of the firm best a pproximates a: true descriptive and normative view of business organiz ations. If the role of government is to maximize the full range of pub lic - private relationships for any given series of inputs, and the ro le of the firms is to maximize the balance of diverse stakeholders' in terests, then a stakeholders' interests paradigm becomes the natural f oundation for the ethical analysis of policies which regulate business .