What is regulatory capture?

What is regulatory capture?

Regulatory capture occurs when regulatory agencies are dominated by the industries they are supposed to regulate, leading to biased decision-making.

Can you give me an example of regulatory capture?

Sure! A classic example is the relationship between the Federal Aviation Administration (FAA) and the airline industry, where the FAA may prioritize industry interests over public safety.

What are the consequences of regulatory capture?

Consequences include reduced competition, higher prices for consumers, and potential harm to public safety and welfare.

How can we prevent regulatory capture?

Preventing regulatory capture can involve increasing transparency, rotating personnel between industry and regulatory bodies, and enhancing public participation in the regulatory process.