Virtuous Capture

56 Pages Posted: 11 Aug 2015 Last revised: 27 Jun 2018

See all articles by Matthew Wansley

Matthew Wansley

Benjamin N. Cardozo School of Law

Date Written: August 10, 2015

Abstract

A regulatory agency is captured if, instead of the public interest, it pursues the interests of powerful firms it is intended to regulate. Scholars disagree about which agencies are captured, how they become captured, and what reforms, if any, can prevent capture. There is consensus on one issue: capture is a vice.

In this Article, I argue that capture can be a virtue. When powerful interest groups thwart justified regulation, the optimal strategy for pursuing that regulation may be to indirectly empower interest groups that stand to profit from it in the long-run. Legislation creating new interest groups — or altering the incentives of existing ones — can develop a political economy that will support public-interested regulation. Currently dominant interest groups may not be able to anticipate and suppress this long-term threat to their power.

This Article describes how legislation that changed the dynamics of interest group power has led to regulation — on climate change, air bags, and toxic waste — that had been previously blocked by powerful industries. It offers a novel theoretical account of why dominant interest groups predictably fail to stop legislation that empowers rival interest groups over time. It suggests reforms to administrative, tort, and insurance law that can be expected to lead to desirable, but currently unachievable, regulation. It defends virtuous capture as an empirically realistic and normatively permissible means to achieve those ends.

Keywords: regulation, capture

JEL Classification: K23

Suggested Citation

Wansley, Matthew, Virtuous Capture (August 10, 2015). 67 Administrative Law Review 419 (2015); Harvard Public Law Working Paper No. 15-16. Available at SSRN: https://ssrn.com/abstract=2641728

Matthew Wansley (Contact Author)

Benjamin N. Cardozo School of Law ( email )

55 Fifth Ave.
New York, NY 10003
United States

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