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Edited by Britton: 5/25/2017 10:12:07 PM
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Regulatory Capture

More regulation, less regulation, what's the answer? Both are right and wrong depending on the specific thing being argued. Regulatory capture is a form of government failure that occurs when a regulatory agency, created to act in the [b]public interest[/b], instead advances the [b]commercial or political​[/b] concerns of special interest groups that dominate the industry or sector it is charged with regulating. Aka, the fox is in charge of the hen house. We see this happening a lot with the saturation of lobbying and special interest in Politics. Government bodies being run by people aligned with the very special interests they are supposed to regulating for public interest. So rather than pass regulation to do their assigned role, they do they opposite often stifling competition of the interests they are aligned with, regardless of public interest. The people making the rules and who they are aligned with, is something that should always be considered when we look at how our agencies are acting and the legislation they pass. How does regulatory capture occur? Rather simply, it occurs by special interest co-opting our political process by using cash to influence our representatives decision making, until the interests get their seat at the table and are in charge of regulating themselves. When this happens you see things like net neutrality trying to be removed, cheaper versions of more expensive drugs and medicine being banned, rules protecting air and water quality being repealed. More profit at the cost of the average citizen is the theme. It's not partisan politics, it's bribery and corruption.

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  • Regulatory boards are easily captured. It just so happens former bankers know a lot about banking. The same with any specialty. Add hundreds of millions of dollars. The outcome is predictable. Regulations largely serve to crush competition. Powerful corporations can afford more regulations, and since they help write the rules, can prevent regulations from affecting them too negatively. Hell, a lot of permit processes are essentially extortion. Pay for this paper or get shut down. Again, wealthy companies have nothing to worry about. Our system is incredibly prohibitive for small entrepreneurs, though.

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