Old and New Capture

by Sidney Shapiro | July 07, 2016

Originally published on RegBlog by CPR Member Scholar Sidney Shapiro.

Although it is well known that regulatory capture can subvert the public interest, it is becoming increasingly clear that there are two forms of capture that can affect the performance of regulatory agencies.

The "old capture"—which is what most of us think of when we think of regulatory capture—occurs when regulators become so co-opted by the regulated entities or special interests they are supposed to regulate that they end up working to advance those interests instead of the public interest articulated in their statutory mission. In the "new capture," regulators attempt to serve the public interest, but they are stymied by procedural requirements that have gummed up the regulatory process and by deep budget cuts that make it more difficult to comply with those requirements. Both forms of capture subvert the public interest, but it is important to distinguish between them for purposes of fashioning appropriate remedies.

The old capture is associated with the public choice literature, which hypothesizes that regulators put their self-interest ahead of the public interest. For example, regulators may not pursue the public interest because they previously worked for industry and intend to return ("the revolving door" problem), or they want to get a job in industry after government service. Administrators may also be reluctant to regulate, in light of a desire to please elected officials who depend on industry ...

On Regulatory Reform, It's Now Warren vs. Sunstein

by James Goodwin | April 19, 2016
Several weeks ago, Sen. Elizabeth Warren delivered perhaps the most important speech on the U.S. regulatory system in recent memory at a forum on regulatory capture organized by the Administrative Conference of the United States. In it, she described how the regulatory system was not working for the people as it should be – or as Congress had intended. Instead, she described how corporate influence over the regulatory process has become so far-reaching and so overwhelming that it has become ...

CPR's Shapiro Joins ACUS Forum on Regulatory Capture Today

by James Goodwin | March 03, 2016
CPR Vice President Sid Shapiro is among the many distinguished panelists participating this monring in a forum called "Regulatory Capture in the 21st Century." The forum is hosted by the Administrative Conference of the United States (ACUS), an independent federal agency that works to provide Congress with advice on improving the administrative system. The event will feature remarks from Senators Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA), and Mike Lee (R-UT). Professor Shapiro will participate in a panel that looks at regulatory capture in ...

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