The Complexity of Regulatory Capture: Diagnosis, Causality and Remediation

Abstract

This article, part of a symposium addressing the explosion of BP’s Deepwater Horizon oil rig, considers when capture occurs, what causes it, and what can be done about it, all challenging issues. Defining capture is difficult because agency adoption of industry-favored policies does not necessarily mean an agency is ignoring the public interest. Nevertheless, capture should be presumed when an agency consistently adopts health, safety and environmental policies proposed by regulated entities because this signals a failure to adopt a precautionary approach towards protecting the public. Public choice economics offers the standard explanation of why capture occurs, but the dynamics of capture are more complex than this account. In particular, this account overlooks how industry interests are able to defeat the other-regarding motives of regulators by dominating the presentation of information to them. Standard accounts of capture also miss how conservative interests have spent billions of dollars to influence public opinion about government, far outspending progressive interests. These efforts have made it more difficult for progressive interests to rally the public to oppose regulatory capture. Assuming there is the political will to act, institutional redesign can be used to make agencies more resistant to capture. The literature offers a number of useful proposals how to this, but does not discuss the importance of having a strong and vibrant civil service as a bulwark against capture.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 31 citations exist upstream.