Capture Theory Of Regulation Research Articles

Performance of Small and Medium Sized Enterprises: Insights from Social Media Usage in Juba City, South Sudan

Small and Medium Enterprises are the main forces behind economic growth, social progress, and job creation in South Sudan. Business and customers benefit from using social platform on increasing their daily business operations. However, enterprises in South Sudan are performing poorly since there was a reduction in businesses output from 58% in 2017 to 30% in 2021. Thus, the study looked into how social media usage affected the performance of small and medium-sized businesses in Juba City, South Sudan. The specific objectives were to assess how small and medium-sized firms' performance was affected by their use of social media for marketing, customer relations, social media interactions, and information search. The study also examined the moderating effect of government regulations on the relationship between social media usage and the performance of small and medium-sized enterprises. The study was anchored on Resource- Based View, media richness theory and regulatory capture theory. The study employed an explanatory research design and target population was 252 small and medium-sized enterprises in Juba City; 154 firms were selected using simple random sampling. Structured questionnaire was employed to collect data. Data was analyzed using descriptive and inferential statistics. The study found that the performance was positively and significantly affected by the use of social media for information search, social media interactions, social media usage and customer relations, and social media marketing. The study also established that social media usage and firm performance were affected by government regulations. The study concluded that social media usage contributes significantly to enhanced performance of small and medium enterprises. The researcher recommends that small and medium enterprises management should ensure they integrate the social media applications in their management systems. The researcher also recommends that in order to improve their performance on social media, small and medium enterprises identify their areas of strength and weakness. The management should employ modem technology in order to gain from data transfer, emailing, and texting while implementing a social media workforce. The government of South Sudan should ensure that suitable information technology training is offered to small and medium enterprises’ owners for the adoption of social media and other technological innovations.

The Effect of Macroprudential Policies on Financial Stability

Purpose: The general objective of the study was to investigate the effect of macroprudential policies on financial stability. Methodology: The study adopted a desktop research methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library. Findings: The findings reveal that there exists a contextual and methodological gap relating to the effect of macroprudential policies on financial stability. Preliminary empirical review revealed that macroprudential policies were crucial in mitigating systemic risk and enhancing financial stability. It found that tailored approaches, considering specific economic conditions, were necessary for these policies to be effective. Coordination with other regulatory measures and continuous adaptation to evolving financial landscapes were also essential. The research highlighted the importance of robust regulatory institutions and effective enforcement mechanisms, particularly in emerging markets, to address challenges such as regulatory capture and limited institutional capacity. Overall, the study emphasized the need for a dynamic and adaptable macroprudential regulatory framework to maintain a stable and resilient financial system. Unique Contribution to Theory, Practice and Policy: The Financial Stability Hypothesis, Regulatory Capture Theory and Agency Theory may be used to anchor future studies on macroprudential policies on financial stability. The study recommended adopting a comprehensive macroprudential regulatory framework that integrated various tools to address systemic risk. It suggested enhancing theoretical models to understand the dynamic effects of these tools and their combined impact. Practical recommendations included building strong regulatory institutions, improving data collection, and enhancing international cooperation and information sharing. Policy recommendations emphasized clear and transparent frameworks, regular policy reviews, and considering potential unintended consequences. Engaging with stakeholders to address concerns and ensure balanced regulation was also advised to support sustainable economic growth while maintaining financial stability.

How Do Political and Nonpolitical Ties Affect Corporate Regulatory Participation? A Regulatory Capture Perspective

This study extends regulatory capture theory to investigate how and to what extent a firm’s political and nonpolitical ties jointly influence corporate regulatory participation. In the context of regulatory standards setting, although firms with political ties are better able to promote firm standards into industry regulations, it remains unclear whether the coexistence of firms’ nonpolitical ties (i.e., university ties and interlocked firms in our study) is more or less likely to reduce the effect of political ties. Although corporate leaders with political and nonpolitical ties may provide complementary resources, they may follow different mechanisms to drive firm actions. We, thus, argue that nonpolitical ties likely reduce the effect of political ties on regulatory standards setting. Using a sample of public manufacturing firms in China, we find evidence that supports our predictions. Our study contributes to the regulatory capture literature by redirecting attention to the dynamics of political versus nonpolitical ties.

Corporate Governance Practices and Performance of Imarisha Sacco in Bomet County Kenya

The problem in the Savings and Credit Cooperative Organisations industry, particularly in the teaching industry in Bomet County, is the presence of challenges related to corporate governance and organizational performance. There are issues with accountability, transparency, and risk management practices. Additionally, low levels of financial literacy among members, limited access to finance, and inadequate technology and systems further contribute to the performance-related challenges faced by these Savings and Credit Cooperative Organisations. The study was on the effect of Corporate Governance practices on the performance of Imarisha Savings and Credit Cooperative Organisation in Bomet County. The purpose of this study was to investigate how board competence, legislation, roles and responsibilities and internal controls affects performance Imarisha Savings and Credit Cooperative Organisation. The literature review focused on various theories which include core competence model, regulatory capture theory, legalistic theory, attribution theory and the balanced scorecard theory. The study design adopted was descriptive in nature considering a total population of 65 senior management, middle management, and support staff of which a complete census will be considered. Stratified sampling was used since the population was already broken down into the respective categories. Data was gathered using questionnaire and it was tested for validity and reliability. Content validity was tested with a content validity index threshold of 0.8 or higher. Reliability was tested with a Cronbach's alpha threshold of 0.70 or higher. Data was analysed using both descriptive and inferential statistics. Findings revealed that board competence, legislation, roles and responsibilities, and internal controls had a positive and significant effect on performance, that is, β= 0.469, p < 0.05), β=0.022, p < 0.05, β=0.404, p < 0.05) and β=0.045, p < 0.05 respectively. The study concluded that board competence, legislation, roles and responsibilities and internal controls improve performance. The study recommended that board members should continue to have strategic thinking skills and front the vision of the organization. Imarisha SACCO should have adequate internal policies that help to govern SACCO activities. Duties of board members at the organization should continue being properly described. The oversight committees should continue to meet regularly to oversight SACCO activities. The study recommended that further studies should be conducted on effect of corporate governance practices on performance of Imarisha SACCO in Bomet County. Indicators of corporate governance practices adopted in the study are board competence, legislation, roles and responsibilities and internal controls. The study recommends a similar study to be conducted on the subject matter but should be conducted on SACCOs’ in other Counties in Kenya.

Inwigilacja w parlamencie. Analiza procesu legislacyjnego projektów dotyczących czynności operacyjno-rozpoznawczych w dobie rozwoju technologicznego

SURVEILLANCE IN PARLIAMENT: AN ANALYSIS OF THE LEGISLATIVE PROCESS OF PROJECTS CONCERNING SECRET SURVEILLANCE IN THE ERA OF TECHNOLOGICAL DEVELOPMENT Secret surveillance is one of the core activities of the intelligence services. Covert collection of information about individuals is often necessary for the effective performance of their tasks. On the other hand, the development of information technologies enables mass and virtually unlimited covert surveillance, thereby compromising democratic values such as privacy or transparency. Thus, balancing security and individual rights requires the creation of appropriate legal and political checks on surveillance. The responsibility for delineating the permissible boundaries of surveillance authorities rests primarily upon parliaments. However, Polish surveillance law tends to successively expand surveillance powers at the expense of the constitutional balance, as confirmed by multiple Constitutional Court rulings. One of the theories put forward to explain this fact is the regulatory capture theory, according to which legislators, through close cooperation with intelligence agency personnel, adopt the latter’s perspective and values, becoming co-opted to further their interests. This is exacerbated because the intelligence personnel has greater expertise on surveillance issues, and, as noted by J. Widacki, an exceptional capability to charm discussants, strong motives for exercising it, and substantial experience with significant successes in this area. This article seeks to ‘un-charm’ this area. Through a combination of quantitative and qualitative methods, and by reference to objective, measurable indicators, we seek to assess the extent of regulatory capture on the Polish legislative process in the area of secret surveillance, and thereby contribute to explaining the weakness of the legal and political checks on intelligence services in Poland.

Audit firm political connections and PCAOB inspection reports

We examine the effect of audit firm political connections on the harshness of Public Company Accounting Oversight Board (PCAOB) inspection reports. Relying on Regulatory Capture Theory and Motivated Reasoning Theory, we show audit firm political connections, as measured through PAC contributions, are negatively associated with the harshness of Part I reports. Our results are robust to instrumentation and are not due to movements of personnel between the PCAOB and audit firms or improvements in a firm's audit quality. In supplementary tests, we show the negative relation is stronger when we consider the directed nature of PAC contributions to members of Congress who exercise SEC oversight and robust to alternative measures. Finally, we consider the harshness of Part II inspection reports and find no association with political connections. Collectively, our results suggest audit firm political connections induce favorable influence over Part I findings of PCAOB inspection reports.

The ungreening of integrated reporting: a reflection on regulatory capture

PurposeThe initial rationale for developing integrated reporting included addressing the failures of traditional reporting to address sustainability issues. Subsequently, the International Integrated Reporting Council (IIRC) modified its stated objectives to emphasise integrated thinking and value creation. There has been debate on whether the IIRC’s process for developing its integrated reporting framework was subject to regulatory capture by the accounting profession (Flower, 2015; Adams, 2015; Thomson, 2015). This paper aims to provide additional evidence on the extent to which this regulatory capture occurred, with an update on current developments.Design/methodology/approachData from interviews with key participants in the integrated reporting framework’s development and the IIRC’s Council and Working Group meeting minutes were analysed to identify to what extent the change in the IIRC’s focus can be explained by regulatory capture theory.FindingsThe findings show that the integrated reporting framework’s development was subject to regulatory capture by accountants. However, the extent of capture was mitigated to some extent by processes adopted in its development. This is consistent with regulatory capture theory.Originality/valueThis paper critically examines the debate on the extent to which the sustainability message has been lost as a result of regulatory capture. It provides an in-depth analysis of the IIRC’s treatment of sustainability which explores the application of regulatory capture theory and examines evidence not considered in previous studies.

Lobbying “from within”: A new perspective on the revolving door and regulatory capture

AbstractThis study explores the revolving door phenomenon–when public office holders move back and forth from the public to the private sector, often becoming lobbyists–and its implications on regulatory capture. It draws on the literature on regulatory capture theory and 46 interviews conducted in Quebec with public officers (ministers, chiefs of staff, deputy ministers, and heads of governmental organizations) whose career path includes a revolving door scenario, as well as observers of the phenomenon. New light is shed on capture theory by using a broad definition of the revolving door that focuses on the entry stage. A key finding is that “cultural capture” can occur when new public officers come from the same private sector now within their purview. Based on public officers’ allegiance to their former industry, lobbying is de facto exerted, “from within.” Despite clear irregularities and conflicts of interest, most of those interviewed do not believe in tightening rules and prefer continuing with vigilance from public office holders, journalists, and other observers.

Framing disruption: how a regulatory capture frame legitimized the deregulation of Boston’s ride-for-hire industry

Abstract The theory of regulatory capture has long been used to make the case for deregulation by questioning the legitimacy of government’s regulatory function. How do government officials, who are tasked with regulating, embrace deregulation? This article explores that question in the context of Boston’s debate over regulating transportation network companies (TNCs). Analyzing media coverage, I identify two types of frames that emerged as stakeholders attempted to influence TNC regulation: issue frames aimed to shape the interpretation of the ride-for-hire industry, while meta-frames shifted the focus of debate from TNCs to regulation itself. Specifically, a meta-frame invoking the theory of regulatory capture became central. Supplementing media coverage with in-depth interviews, I show that government officials did not refute the capture frame but rather used this frame to draw a distinction between legitimate and illegitimate regulation. I propose that these distinctions are central to legitimizing a deregulatory agenda, as officials condemn specific types of regulation in order to shore up the broader category of regulation. The case sheds light on how the idea of government as an impediment to innovation is embraced by government officials themselves, paving the way for new market configurations.

Recurrent Waves of Jailbreak in Nigeria: The Imperatives of Prison Intelligence and Dynamic Security Strategies in Managing the Nigerian Correctional Facilities

This paper painstakingly addresses the phenomenon of rising waves of prison or jailbreak in Nigeria. And as generally observed according to the dictates of Nigerian law, jail or prison break remains an illegal or unlawful act under which a prisoner forces his or her way out of the prison in a state. This phenomenon of jailbreaks has in one way or the other impacted negatively on the society and posed dangerous threats to national peace and security. The paper in its objectives endeavours to: highlight the series of jailbreaks that have taken place in Nigeria and the various techniques employed by the escapees; interrogate the causal factors of jailbreaks in the country; and also examine the roles of prison intelligence and dynamic security in curtailing the menace. The study makes use of the regulatory capture theory to explain the bane of the phenomena while descriptive and content-analysis techniques are adopted. With the aid of primary and secondary data, the paper is able to reveal that; corruption, ineffective Correctional Service Arms Squad and Intelligence Unit, lack of prison intelligence and dynamic security, among others have weakened the Nigerian Correctional facilities’ security and led to incessant jailbreaks in Nigeria. The paper, however, recommended; putting in place a very sensitive nature of prison information and intelligence; establishing a prison intelligence management board; adopting a multi-agency approach security strategy; and training of prison-based intelligence officers for intelligence gathering and information sharing as strategies of curtailing the rising spate of jailbreaks in Nigeria.

Regulatory Capture and the Dynamics of Interventionism: The Case of Power Utilities in Quebec and Ontario to 1944

To what extent are the outcomes of economic regulation intended and desired by its proponents? To address this question, we combine Stigler’s theory of regulatory capture with the Austrian theory of the dynamics of interventionism. We reframe Stigler’s theory of regulatory capture as an analytical starting point for a dynamic theory of interventionism, one which accounts for the unintended consequences that emerge from regulation, even if the origins of such regulation were designed to benefit a particular industry or special interest group. Therefore, we argue that regulatory capture is not necessarily inconsistent with a dynamic theory of intervention. We illustrate this theoretical point by applying it to an econometric case study of electric utility regulation and its nationalization in both Ontario and Quebec in the early 20th century, resulting in unintended and undesirable consequences that deviated from the interests of the regulation’s intended beneficiaries.

A Dynamic Theory of Regulatory Capture

A Dynamic Theory of Regulatory Capture

A dynamic theory of regulatory capture

Firms often try to influence individuals that, like regulators, are tasked with advising or deciding on behalf of a third party. In a dynamic regulatory setting, we show that a firm may prefer to capture regulators through the promise of a lucrative future job opportunity (i.e., the revolving-door channel) than through a hidden payment (i.e., a bribe). This is because the revolving door publicly signals the firm’s eagerness and commitment to rewarding lenient regulators, which facilitates collusive equilibria. We find that opening the revolving door conditional on the regulator’s report is usually more efficient than a blanket ban on post-agency employment and may increase social welfare. This insight extends to a variety of applications and can also be used to determine the optimal length of cooling-off periods.

Personnel is Policy: Regulatory Capture at the Federal Trade Commission, 1914–1929

AbstractThis paper uses the concept of “Personnel is Policy” to extend the theory of regulatory capture to the political appointment of agency commissioners. The “Personnel is Policy” theory provides three important insights. First, it shows that whether or not an interest group benefits from a regulatory agency depends on the particular individuals appointed to run it. Second, the president plays an important role in regulatory capture by nominating individuals to be appointed to the commission. Third, regulatory capture does not follow a pre-determined path because the commissioners continually change. The theory is then used to explain the early years of a prominent regulatory agency created during the Progressive Era: the Federal Trade Commission. From the perspective of the big business “trust” interest group, their success at capturing the FTC to achieve their goals of controlling competition and blocking hostile antitrust actions was largely a result of who was appointed to the commission. The trusts were the most successful during the years of 1915–1916 and 1925–1929.

Regulatory Capture in the Petroleum Refining Industry

The capture theory of regulation concludes that regulatory agencies tend to be captured by the firms they are regulating. This paper tests the capture theory in the recent environment of nuanced agency regulation by the administrative state, focusing on the U.S. oil refining industry. Regulation has tended to narrow refiners’ margins, which harms nonintegrated oil refiners more than vertically integrated. Providing evidence of regulatory capture, complementary analysis of stock returns shows that regulations have benefited the stocks of vertically integrated firms. The narrowing of the margins is primarily due to rising input costs.

From Outsiders to Insiders: A Civil Society Perspective on EU Financial Reforms

AbstractThis article examines the role of non‐financial interest groups in EU financial regulatory decision‐making. While regulatory capture theories clearly helped identify the causes for the incrementality in spite of the major shock the 2008 crisis had caused, this article will consider a range of regulatory policy initiatives that do not neatly conform with this theory. I examine the extent to which non‐financial groups are able to have their preferences met in the making of three different consumer policies: the Mortgage Credit Directive (MCD), stricter regulations of retail investment products (PRIPs/KID) and the reform of EU level supervisory structures. By employing a process‐tracing approach based on qualitative interviews to analyze political responses to the 2008 financial crisis, the article demonstrates that newly mobilized groups could translate key advocacy goals into policy by deploying counter‐expertise and co‐operating with policy‐makers in some cases but not in others.

Could digital platforms capture the media through infrastructure?

This article examines the relationship between the news industry and digital platforms, most notably Facebook and Google, through a political economy framework. The theory of regulatory capture suggests that regulators are prone to become captured by the businesses they oversee, whether through financial incentives (such as money transfers and revolving doors) or cognitive/cultural influence (such as advocacy and shared values). The theory was further expanded to suggest that businesses also attempt to capture non-governmental institutions tasked with scrutinizing them, such as the media. This article suggests that Google and Facebook are rapidly expanding their potential capability to do so. Alongside the forms of capture described in the literature, the most crucial element in Google and Facebook’s relationships with news organizations is the fact that they have come to provide the majority of audience for online news and are significant sources of potential growth in viewership. In addition, they equip news organizations with tools for news production, provide them with data on the reach of stories, and offer tools for analytics and insight. All this potentially amounts to a new form of capture that can be called infrastructural capture: circumstances in which a scrutinizing body is incapable of operating sustainably without the physical or digital resources and services provided by the businesses it oversees and is therefore dependent on them. This new category of capture, rooted in the dynamics of contemporary digital news markets, could pose serious challenges to the ability of news organizations to scrutinize the corporations that direct most of the traffic to their sites. Aside from potentially affecting the content of news, another important effect of compromising infrastructural autonomy to non-journalistic third-party actors might be a weakening of the legal protections that journalism benefits from.

Does corruption matter for international entrepreneurship?

This study asks how key regulations influence nascent international entrepreneurship in countries with varying levels of corruption. Using regulatory capture theory and institutional theory, we hypothesize and test the effects of tax, export regulations, and corruption, on international entrepreneurship. We consider direct effects of these regulations as well as a possible moderating effect of corruption on nascent international entrepreneurship. Our findings indicate that the effect of regulations on international nascent entrepreneurship vary depending on types of regulation. Interestingly, we find that corruption plays a dual role, serving as both grease and sand for nascent international entrepreneurship. Corruption worsens the burden of regulations which have financial costs element. Another interesting finding is that corporate tax is not a significant deterrent factor for IE when corruption is low.

Lobbying on Regulatory Enforcement Actions: Evidence from Banking

This paper analyzes the relationship between bank lobbying and supervisory decisions of regulators, and documents its moral hazard implications. Exploiting bank-level information on the universe of commercial and savings banks in the United States, I find that regulators are less likely to initiate enforcement actions against lobbying banks. In addition, I show that lobbying banks are riskier and reliably underperform their non-lobbying peers. Overall, these results appear rather inconsistent with an information-based explanation of bank lobbying, but consistent with the theory of regulatory capture.

Benefits of entry control: the Russian case

This article compares an original theory of gatekeeping and public choice theory, confronting them with data from an emerging market, Russia. It argues that the former theory produces riskier predictions than the latter one. The Popperian criteria for falsification of a theory suggest that the riskier the predictions the theory produces, the more confidence we have in the outcomes of its falsification. Theory of public choice predicts that either the government wins and business loses (the tollbooth hypothesis) or business wins and the government loses (regulatory capture theory). The theory of gatekeeping predicts that both the government and business win. Furthermore, the third agent's (the population's) pecuniary interests are also supposedly associated with the interests of the first two agents. A series of econometric tests using sub-national data from Russia show that the gatekeeper's interests are indeed positively associated with the interests of the businesses that manage to get admitted to the field of transactions. The population's interests also turn out to be correlated with the interests of the gatekeeper and business. The gains of the three agents tend to be unequally distributed, however. The market system in Russia ultimately works in the interests of state representatives who assume the gatekeeper's role and to a lesser extent in the interests of selected businesses.