Regulatory Capture
** [excerpts from several articles]
The concept of Regulatory Capture (Reg Capture) typically
refers to a phenomenon that occurs when a regulatory agency that is
created to act in the public interest, instead advances the commercial
or political concerns of special interest groups that dominate an
industry. When
regulatory capture occurs, the interests of firms or political groups
are given priority or favor over the interests of the public.
A captured regulator is often worse than no regulation, because it wields the authority of government. But, it is never a whole industry which is ‘capturing’ its regulators, but only the big companies. There is substantial academic literature suggesting that smaller government units are easier for small, concentrated industries to capture than large ones.
Vested interests in an industry have the greatest financial stake in regulations affecting them, and so are more likely to try to influence the regulator than relatively dispersed individual consumers. When regulators form expert bodies to examine policy, these invariably feature current or former industry members. Capture is also facilitated where consumers or taxpayers have a poorer understanding of underlying issues.🎉🎉🎉 ... thus the government "has really just become cheerleaders for the industry".
... do you need to re-watch "Inside Job"?
