The NZBR has taken a close interest in securities market regulation. A recurring theme has been a plea for more rigorous analysis of problems and of the likely efficacy of proposed remedies. Those undertaking the analysis need to be familiar with the economic theory of regulation. Much of the poor quality legislation currently in place stems from the failure of governments to ascertain if there really is a problem that warrants legislation, and from shoddy analysis. In particular, public policy analysis commonly seems to lack a coherent theory of information.1 For example, the drive to force disclosure of valuable information in securities markets contrasts with the drive to legislate for privacy and to protect intellectual property rights elsewhere in government.