| Licensing which originates from more general practices of those with property rights carving out part of their interest to give limited rights to others in respect of their property, is likely to be attractive as a means to assert control. Regulation is conventionally understood as the deployment of governmental authority to establish systematic oversight by reference to rules over some activities valued by society. In the armoury of tools and techniques for regulation, licensing has a central place as the exercise of state control seeking to secure particular social and economic outcomes. However defined, licenses as a tool of government can be deployed for a number of distinct purposes of which regulation is only sometimes the primary purpose. Where licensing is regulatory, we may assume that the key rationale for the regime is to exert control, which can be defined as gathering information, controlling entry, controlling conduct and enforcement. Whilst licensing may have positive effects in terms of capacity to pre-clear market actors and to identify and regulate them, there is significant potential for adverse effects, such as restrictions on entry to the market, abusing of state power and costly. Governments should consider alternative ways of securing the same outcomes prior to introducing licensing regimes. Alternatives to licensing include doing nothing, encouraging self-regulation, using market-like mechanisms to change behaviour and applying regulatory oversight without the burden of licensing. |
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