Old and New Capture
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 …
I was recently a panelist at a Senate workshop on regulatory capture sponsored by the Administrative Conference of the United States (ACUS). In an earlier post about this event, I wrote about the potential of enhanced transparency to reduce regulatory capture, which I discussed at the workshop. Conservative commentators at the workshop argued that agencies are captured by public interest groups as well as by regulated entities. They contended that Congress should thus pass the REINs Act to reduce capture from both types of regulatory stakeholders. Of course, their fears of public interest capture are greatly overblown, as the potential for these groups to capture agencies is far more hypothetical than real. But the real problem is that the REINS Act, if it became law, would increase regulatory capture, not decrease it.
My earlier post explained that the imposition of budget cuts by Congress on regulatory agencies …
The subject of regulatory capture was back on Capital Hill last week as the result of a briefing sponsored by Administrative Conference of the United States (ACUS). In 2010, I testified concerning regulatory capture in a Senate hearing chaired by Senator Sheldon Whitehouse (D-RI), but in the midst of the broad-scale conservative assault on regulation, the issue hasn’t gotten nearly the attention it deserves. That’s unfortunate for a simple reason. As Rena Steinzor and I establish in our book, many aspects of the regulatory system are downright dysfunctional, and we identified regulatory capture as a significant source of this dysfunction.
Regulatory capture is a complex issue and determining how best to reduce the amount of capture is challenging, as a helpful book on the subject edited by Dan Carpenter and David Moss establishes. Nevertheless, there are some steps that Congress or the President can take …
The resignation of House Speaker John Boehner and the VW diesel car scandal -- two rather extraordinary events -- might not initially appear to be related, but there is a connection. The most conservative members of the Republican caucus celebrated Representative Boehner's resignation because they felt he did not fight hard enough to shrink the size of the federal government through more aggressive tactics, like government shutdowns. Although one of government's most important functions is to deter behavior such as that of VW, the radical Republicans would organize American society using only markets, not government. The difficulty with this stance is that corporations "cheating" consumers is an unavoidable aspect of capitalistic markets, making government regulation a necessity.
Adam Smith in the Wealth of Nations famously identifies an "invisible hand" by which individual self-interest has the effect of benefiting society more effectively than when an individual intends to …
With the ten-year anniversary of Hurricane Katrina upon us, looking back on CPR’s landmark report on the disaster reveals two essential public policy insights. One is that a series of government policy failures resulted in a far worse disaster than would have occurred if government had been more pro-active. The second is that more effective government requires addressing and resolving what are often difficult policy issues, something that requires an ongoing dialogue and attention to what experts know and do not know about our options. Today, ten years after Katrina, the country has retreated even further from having pro-active government. Many elected leaders refuse even to discuss what are the appropriate functions of government, let alone what is the preferable governmental policy option. For them, there is simply no justification for expanding the government or even for adequately funding the government that we have.
The deep …
The New Push to Protect American Workers from the Conditions of the Marketplace
In 1873, when Mark Twain and Charles Dudley Warner published their book, The Gilded Age, they satirized the greed, political corruption, and skewed distribution of wealth that pervaded the United States at the time. As during Twain’s time, most of the wealth generated in this country in recent decades has gone only to the very wealthiest among us. For Americans who work for a minimum wage, there has not been a raise for decades, even though inflation has worn away their buying power. Recently we have seen a national movement to raise the minimum wage, but it is not the only issue that the nation must face if it is to address the plight of workers in this economy.
Recently the Wage and Hour Division of the Department of Labor (DOL) announced that …
OSHA has finally promulgated a Confined Spaces in Construction rule. The agency waited 25 years after it had issued an Advanced Notice of Proposed Rulemaking (ANPR) to issue a rule. Administrative law academics have been concerned for some time about the ossification of rulemaking due to a set of regulatory hurdles imposed by regulatory opponents. Proponents say these hurdles are necessary to ensure the accuracy and reasonableness of regulations, but they also deny workers and others of regulatory protection for years and years — a quarter century in this case. In short, perfection has become the enemy of the good, a pattern that has real consequences for the workers who depend on OSHA to issue rules in a timely way.
A history of tying up rules to protect construction workers in confined spaces has plagued the agency for decades. For example, in March 1980, OSHA issued an ANPR …
The Bureau of Labor Statistics (BLS) has reported that the occupational fatality rate of 3.3 deaths per 100,000 workers for 2013 was the lowest reported rate since the BLS started using its current tracking methodology in 2006. That’s good news, but we’ve got a very long way to go still. The simple truth is that workers are not as safe as they could and should be. Although the fatality rate is down, there were still 4,585 occupational fatalities in 2013.
The principal method for making workers safer is regulation and enforcement by the Occupational Health & Safety Administration. While about 40 percent of the deaths resulted from motor vehicle-related accidents, which is outside of OSHA’s regulatory authority, OSHA has tried to address the job risks within its jurisdiction by targeting the most dangerous industries and imposing the maximum penalties in appropriate …
Forty-five years ago I joined hundreds of people in Fairmont Park in Philadelphia for the first Earth Day. The sad state of the environment on that day was all too apparent. The Cuyahoga River in Cleveland was so polluted that it caught on fire the year before. The 1969 Santa Barbara oil spill is still the third largest oil spill in American history. The air pollution in America’s cities – palpable air – had reached epidemic proportions. Rachael Carson’s book, Silent Spring, detailing the adverse impact of toxic chemicals on the environment was eight years old, having been read by hundreds of thousands of people.
In today’s gridlocked political environment, it is worth asking whether Earth Day still provides any lessons for the continuing struggle to protect the environment.
Political scientists teach us that the history of the United States indicates that conservative and corporate interests …
Today, the House of Representatives voted to pass the Regulatory Accountability Act of 2015, which would amend the Administrative Procedure Act (APA) to add over 74 new procedural requirements to the rule-making process, including more than 29 new “documentation” requirements. The goal of administrative procedure is to ensure that the government’s adoption of regulation is accountable and fair, but not at the expense of hamstringing the ability of agencies to fulfill the public interest. The House obviously has no such concern. Agencies already take four to eight years to promulgate any type of complex and controversial regulation, and the new requirements would add another two to three years or more to the process. House Republicans voted today to delay clean air, clean water, safer workplaces, and less toxic products for their constituents. In addition, they have given Wall Street a green light to re-engage in behavior …
