The best regulations encourage the regulated party to take on the problem themselves. This is not “self-regulation” in the sense that government simply trusts the market to do the right thing. Instead, it is a matter of creating the right incentives. For example, the Fair Credit Billing Act of 1974 made consumers responsible for only $50 of any fraudulent credit card charges, making it in the industry’s own self-interest to police fraud aggressively.
