Regulated industries often capture their own regulators

Evidence

Whatever the origin of railroad regulation, or regulation of public utilities, airlines, and so on, what happens in practice? Whom do the commissions serve? Often, it is claimed, the regulated industry ends up “capturing” the agency and bending it to suit industry purposes. The ICC became the creature of the railroads early in its career; television networks allegedly took over the Federal Communications Commission. The puppets shove aside the puppetmaster and make him dance on their strings. — Lawrence M. Friedman and Grant M. Hayden, American Law, 583

Categorization

• DEFINE: Introduces the classic ‘capture’ theory of agencies — the reverse of their stated purpose.
• XREF: connects to: Industry capture follows from regulators’ incentives and diffuse public interest — Lawrence M. Friedman and Grant M. Hayden, American Law: An Introduction, 584; Courts and Congress responded to agency capture with standing doctrines and open-government laws — Lawrence M. Friedman and Grant M. Hayden, American Law: An Introduction, 588; Occupational licensing originated as workers’ substitute for union power — Lawrence M. Friedman and Grant M. Hayden, American Law: An Introduction, 581 (+7 more)

Broader Connections

• Regulatory agencies are captured by the industries they oversee #expands (0.95) — Albert Bandura, Moral Disengagement, 977
• Regulatory agencies drift toward the interests of the firms they regulate #expands (0.90) — Lawrence M. Friedman, A History of American Law, 2588
• Regulatory agencies are captured by the industries they oversee through campaign contributions #expands (0.85) — Albert Bandura, Moral Disengagement, 977
• Anticipated lobbying careers make sitting regulators favor the industries they oversee #expands (0.80) — Albert Bandura, Moral Disengagement, 1529
• Private self-regulators can beat external regulators on knowledge and trust. #complicates (0.75) — Shapiro, Susan P., The Social Control of Impersonal Trust, 118