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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

Meet the Sugar Barons Who Used Both Sides of American Politics to Get Billions in Subsidies

Guy Rolnik
Meet the Florida-based Fanjul brothers, who inject money to both political parties and dominate an industry that enjoys billions of dollar's worth of subsidies and protections.  Last week,...
Regulatory Capture

Certificate of Need Laws Show Entry Barriers Can Raise Spending

James Bailey
In most states, health care providers who seek to open a new hospital must obtain a “certificate of need” (CON) from a state board certifying...
Regulatory Capture

Why is Medical Marijuana Still Not Accepted in All 50 States? Ask George Stigler

Asher Schechter
A new working paper by University of Georgia researchers shows that medical marijuana leads to sharp drops in the number of prescriptions for...
Regulatory Capture

Whistleblowers are Motivated by Moral Reasons Above Monetary Ones

Adam Waytz
Studies consistently show that whistleblowers are motivated by moral reasons. The primacy of moral concerns makes sense, considering how frequently whistleblowers face exclusion and retaliation rather...
Regulatory Capture

SEC and Revolving Doors: Q&A with Eric Ben-Artzi, the Deutsche Bank Whistleblower Who Rejected a Multimillion Dollar Award

Guy Rolnik
ProMarket interviews Eric Ben-Artzi, the former Deutsche Bank risk officer turned whistleblower who rejected an $8.25 million award from the SEC.  In May 2015, Deutsche Bank...
Regulatory Capture

Combatting External and Internal Regulatory Capture

Reeve T. Bull
External and internal capture may be reduced through a more logical division of labor between Congress and agencies. In these hyper-partisan times, one is hard-pressed...
Regulatory Capture

Regulators as Validators

Roy Shapira
Special interest groups can use their influence over regulation to water down not just potential legal sanctions but also potential reputational sanctions. What deters corporate...
Regulatory Capture

The Elusiveness of Regulatory Capture

Cary Coglianese
Regulatory capture is hard to pin down, its elusiveness stemming from four principal factors. Nearly everyone sees regulatory capture – and rightly disdains it. And...
Regulatory Capture

Regulatory Capture is Not “Inevitable”

William K. Black
“Capture” has become a self-fulfilling prophecy of economists who turn their students into sure-to-fail regulators. A Wall Street Journal editorial asserted the “inevitability” of...
Regulatory Capture

Prosecuting Corporate Criminals

Jed S. Rakoff
Prosecutions of individual corporate criminals can, in fact, be successful—and are critical for attaining justice. It is difficult to escape the inference that the Great...
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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.