Regulatory Capture's Self‐Serving Application

Abstract

Abstract Observers regularly assert that government regulations are captured—meaning the content of the regulation is diverted away from the public interest and toward the interests of regulated industry. I argue that the label of regulatory capture is often applied differently by policy losers than by policy winners. I hypothesize that when an entity is unsuccessful in achieving its goals during regulatory policy making, that entity is more likely to deem the process captured. With data from 41 FDA regulations and guidance documents, I find that—even when provided a common definition—those interest groups engaged in the same rulemaking vary as to whether or not they would categorize the process as captured. Moreover, this variation is negatively associated with whether the entity achieved its policy goals during the rulemaking. These findings imply that scholars ought to reassess capture's occurrence, as well as the political and policy implications attached to its invocation. Evidence for Practice The study provides evidence drawn from policy making at the U.S. Food and Drug Administration (FDA) that the label of regulatory capture is applied inconsistently by interest group participants in the agency rulemaking process. The research demonstrates a partiality toward categorizing a rulemaking as captured when an interest group participant does not get its way. This finding implies that public agency officials—when they do not heed the advice of public commenters—may need to worry about capture accusations. The study's results raise the provocative possibility that capture's designation may be employed strategically—or even opportunistically—by an interest group to delegitimize an agency regulation when the group does not agree with it. Given that policy makers and practitioners from both sides of the political aisle routinely highlight the need to address regulatory capture, the evidence uncovered in this article strongly suggests that more attention from the field of public administration is needed to better understand how regulatory capture is actually used in practice.