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Regulatory Capture

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PPGPortal > Home > Concept Dictionary > R > Regulatory Capture

Regulatory Capture 

A term used to refer to situations in which a state regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating.



The theory of regulatory capture was set out by Richard Posner, an economist and lawyer at the University of Chicago, who argued that ‘regulation is not about the public interest at all, but is a process, by which interest groups seek to promote their private interest ... Over time, regulatory agencies come to be dominated by the industries regulated.’ Most economists are less extreme, arguing that regulation often does good but is always at risk of being captured by the regulated firms.

The Economist, Research Tools. Retrieved on December 27, 2009, from


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