Recent Developments in China, the US and Europe
Edited by Michael Faure and Xinzhu Zhang
Chapter 9: Professional Licensing and Self-regulation in Europe and China: A Law and Economics Perspective
9. Professional licensing and selfregulation in Europe and China: a law and economics perspective Niels Philipsen* 9.1 INTRODUCTION Professional licensing can be defined as the set of regulations that limit service provision to individuals who meet certain government-established criteria.1 These criteria generally include educational requirements (university diploma), practical experience, and registration in a public register. Often there is ex post control on licensed practitioners: the licence can then be suspended or revoked if practitioners fail to stay within the prescribed set of permissible activities. Some licences need to be renewed after a number of years, subject to continuing education requirements, the attendance of professional workshops and courses, the payment of a fee, or a combination thereof. Whereas licensing excludes certain practitioners from the market, under a certification system non-certified professionals are still allowed to be active on the market. Certification refers to the protection of a title, such as ‘architect’ or ‘certified public accountant’. Those who do not have the certification may not use the protected title.2 It facilitates the communication of information about human capital investments, such as training levels.3 As with licences, some certifications are valid for a lifetime, while others have to be renewed on regular bases. Although the state can be involved in the formulation and enforcement of certification systems, they are more commonly found in self-regulation. There is a clear tension between competition law and professional licensing. The former promotes competition, whereas the latter restricts it by creating a ‘professional monopoly’. According to the law...
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