capture Archives — LIRNEasia


New thinking on regulation

Posted on June 26, 2014  /  0 Comments

I was of the view that all the innovations in regulation were occurring in the developing world (or by scholars working on developing country regulation). I was wrong. It appears that very interesting work is going on at Harvard, possibly in response to the US crisis in regulation: “Weak capture” (defined as special-interest influence compromising “the capacity of regulation to enhance the public interest, but the public interest is still being served by regulation”) may be nearly ubiquitous. But where some net social benefit remains, so does the case for regulation—perhaps modified, but not abandoned. Resorting to analogy again, Carpenter and Moss suggest consulting the history of medicine: Just as physicians once believed that the only effective way to treat infection was to cut it out surgically, it is commonplace today to believe that capture can only be treated by “amputating” the offending regulation.