Publicação
Regulation and regulatory capture
| Resumo: | Regulation exists to correct the negative effects of market failures, on the well-being of consumers and of the society, as a whole. One major problem is that regulatory action may be impaired by the existence of interest groups that seek to condition regulators, so that they make decisions favorable to their goals. We present and discuss the different economic theories that provide insights into the problem of regulatory capture including, e.g., interest group theory, toll (corruption) theories, information asymmetry and the principal-agent theory. We present several forms in which regulatory capture may occur, including financial capture and cultural capture. In the final two sections, we discuss how to mitigate the risk of regulatory capture by interest groups of a regulated sector or industry. |
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| Autores principais: | Borges, Maria Rosa |
| Assunto: | Regulation Regulatory Capture Interest Groups |
| Ano: | 2017 |
| País: | Portugal |
| Tipo de documento: | artigo |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório da Universidade de Lisboa |
| Resumo: | Regulation exists to correct the negative effects of market failures, on the well-being of consumers and of the society, as a whole. One major problem is that regulatory action may be impaired by the existence of interest groups that seek to condition regulators, so that they make decisions favorable to their goals. We present and discuss the different economic theories that provide insights into the problem of regulatory capture including, e.g., interest group theory, toll (corruption) theories, information asymmetry and the principal-agent theory. We present several forms in which regulatory capture may occur, including financial capture and cultural capture. In the final two sections, we discuss how to mitigate the risk of regulatory capture by interest groups of a regulated sector or industry. |
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