Literature Review on Analytical Frameworks

Background Paper to Creating Confident Consumers

May 2003

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Introduction

This paper reviews the major theoretical approaches to consumer policy by drawing on academic literature. The purpose is to identify considerations in formulating the goals of consumer policy and appropriate high-level frameworks that support those goals.

The first part of the paper discusses the scope and boundaries of consumer policy. The academic literature generally assumes a narrow scope, focused on the consumer as a purchaser of goods and services in a market setting. The consumer movement uses a broader definition, and its focus is on the consumer as a recipient of goods and services in a wider setting, including public services.

The paper then discusses the goals of consumer law. Writers have noted that consumer protection policy lacks a robust theory or a clearly defined set of goals. Duggan (1991) suggests that there are three theoretical approaches: efficiency, equity and paternalism. Other approaches are libertarian, rights-based and information-based.

While no one framework will provide answers to every consumer problem, it is hoped that this paper highlights the useful role of theory in exposing alternative ways of conceptualising consumer problems and alternative approaches to dealing with those problems.

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