This paper discusses the development of safety regulation in sea transport. It suggests that international competitive forces and regulatory capture, coupled with the slow and uneven effects of international conventions, has led to a sub-optimal level of ship safety. Reforms are therefore needed based on a systematic programme of cost-benefit analysis, involving higher quality of information.

Equilibrium in the maritime transport market between the established flag sector and the flag of convenience sector is explained by reference to comparative levels of efficiency and the real cost of labour. The established flag sector would increase if it could reduce its labour costs, especially the non-wage element.

There is little integration of shipping with production; the few instances accord with the institutional theory of the firm. The variety and flexibility of shipping contracts give many of the advantages of vertical integration without its costs.