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Regulatory Capture

When regulation protects narrow interests – usually the interests of the incumbent industry – at the expense of the public interest. Capture occurs in various ways: from straightforward bribes and threats, to more implicit quid pro quos such as the lucrative future employment (revolving door), to softer forms of cognitive/cultural capture.
“… as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.” George Stigler – The Theory of Economic Regulation (1971)

Regulatory Capture

Eliot Spitzer: The U.S. Never Had the Will and the Ability to Hold the Most Powerful to Account

Guy Rolnik
In a special interview with ProMarket, former New York governor Eliot Spitzer talks about financial regulation, regulatory capture, and antitrust. Part 1 of 2.   Clear rules and...
Regulatory Capture

How Biology Explains Back-Scratching Between Wall Street and Government

Cameron K. Murray
The revolving door of government and business explained in the lab. The systemic financial risk-taking in the lead-up to the financial crisis was a product...
Regulatory Capture

"The Pharmaceutical Industry Has a Large Amount of Control Over the Field of Oncology"

Guy Rolnik
In the second part of our two-part interview with Daniel Goldstein, MD, an oncologist who studies the influence of business interests on healthcare, we talk...
Regulatory Capture

When Medical Experiments Serve the Business Needs of Pharmaceutical Firms Instead of Science

Guy Rolnik
The first part of a two-part interview with Daniel Goldstein, MD, an oncologist who also studies the influence of business interests on healthcare—from treating patients...
Regulatory Capture

Big Four Audit Firms Enjoy a “Too Few to Fail” Regulatory Hall Pass

Francine McKenna
The failure of Enron and subsequent demise of Arthur Andersen led to significant changes for public reporting and auditing but not much change in...
Regulatory Capture

How Market Power Leads to Corporate Political Influence

Asher Schechter
Neoclassical economic theory assumes that firms have no power to influence the rules of the game. A new paper by Luigi Zingales argues: This is...
Regulatory Capture

Spoiled Meat Scandal Reveals the Influence of Business and Media on Brazil's Politics

Alana Rizzo
The recently-released secret taping of a conversation between Brazil’s president Michel Temer and one of the country's most prominent businessmen reveals the extent to which big business...
Regulatory Capture

What Drives Bank Bailouts? Study Shows That Political Interests Play a Major Role

Asher Schechter
New paper finds that political and personal interests have a major impact on politicians’ decisions regarding bank bailouts. In his memoir Stress Test (Crown, 2014), former Treasury...
Regulatory Capture

How Financial Regulations Can Create Barriers to Entry: The Case of Cumplo in Chile

ProMarket writers
A new Stigler Center case study chronicling the story of Chile’s first crowdfunding platform and its early regulatory challenges illustrates how financial regulations can be...
Regulatory Capture

Study: Politicians Vote Against the Will of Their Constituents 35 Percent of the Time

Asher Schechter
New Stigler Center working paper: “To the extent that legislators represent majority opinion, it happens largely because legislators share the opinions of their constituents,...
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The publication of the Stigler Center at The University of Chicago Booth School of Business

ProMarket is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Policy.