As near earth space becomes increasingly crowded with manmade debris, the risks to further peaceful uses of that region have begun to capture world-wide attention. It seems plain that some kind of regulation, by some sort of entity, is essential to several goals: to name a few, the maintenance of a safe environment for human beings in space; the avoidance of environmental damage to the surface of the Earth; and the continuation of economically beneficial uses of near earth space. Regulation, however, often has unintended consequences, and upon further examination sometimes proves to be more costly than the laissez faire alternative. Even when it is clear that an unregulated environment is inappropriate, important decisions must be made about the level at which regulation ought to occur: local, regional, national, or international.

This paper examines the related questions of (1) the desirability of regulating some or all aspects of the space debris problem, and (2) the optimal source of such regulation. It does so in the light of studies of the economics of regulation that have been conducted principally within the United States, and in the light of international experience in regulating other issues similar to the problem of space debris. In the final analysis, a multilateral approach is preferable to either national regulation or a global free-for-all. Nevertheless, prior efforts at multilateral regulation have not always produced successfully functioning regimes.