Preventing Regulatory Capture January 25, 2013 at 9:22 pm
The Tobin project’s new book on Preventing Regulatory Capture can be found here. The title is a little ambitious – there is more analysis of the phenomenon of regulatory capture than discussion of its prevention in the book – but many of the chapters are worth reading. I recommend in particular William Novak’s History of the idea of regulatory capture. McCarty is interesting too, not so much for his model of regulation in the presence of complexity and partial information (which I don’t really buy) but for the proposal that a model is needed to understand situations like this. Sadly Kwak’s chapter on financial regulatory capture is one of the weaker ones, although I do like his ideas on negotiated rulemaking, tri-partism and the use of devil’s advocates. I’ll leave you with Novak’s call to arms:
…the problems of faction, special interest, special privilege, and private coercion are not going away anytime soon in this still open and democratic society. And it is but a chimera to presume that a simple dismantling of an earlier era’s checks and balances and regulatory institutions will somehow automatically and spontaneously vitiate the age-old problems of inequality, privilege, and private (as well as public) coercion. The problems of regulation and capture will not be solved by fleeing to some kind of imaginary laissez-faire past.