Failure to Capture: Why Business Does Not Control the Rulemaking Process

71 Pages Posted: 17 Aug 2020

Date Written: July 15, 2020

Abstract

Leading figures on both the political right and the political left have concluded that the agency rulemaking process is captured: that it serves to benefit businesses, at the expense of the general public. This perception appears to be supported by recent theoretical and empirical scholarship and has prompted lawmakers to introduce various proposals to reform the federal rulemaking process.

Yet as I will demonstrate in this Article, the view of the rulemaking process as captured is unwarranted. I will show that the academic literature actually provides little guidance as to the magnitude of business influence—that is, the extent to which businesses are able to achieve their desired regulatory outcomes. Drawing on an extensive and original empirical investigation of the Tank Car Rule, a major rule issued by the Department of Transportation in 2015, I will uncover several key limitations on business influence in the rulemaking process. Taken together, these limitations show that businesses do not routinely exert anything approaching systematic control over the federal rulemaking process.

This conclusion undercuts two prominent concerns associated with the capture account of regulation by showing that the regulatory process may still serve the public interest, and by defusing a possible threat to the democratic legitimacy of agency rules. In addition, it provides reason to disfavor major reforms to the rulemaking process, and suggests that some proposed reforms could even have the opposite effect and serve to augment business influence.

Keywords: administrative law, agencies, rulemaking, business interests and influence, regulatory capture, political economy

JEL Classification: G38, K23, L50

Suggested Citation

Scheffler, Gabriel, Failure to Capture: Why Business Does Not Control the Rulemaking Process (July 15, 2020). Maryland Law Review, Vol. 79, No. 3, 2020, Available at SSRN: https://ssrn.com/abstract=3652334

Gabriel Scheffler (Contact Author)

University of Miami School of Law ( email )

1311 Miller Dr.
Coral Gables, FL FL 33146
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
25
Abstract Views
178
PlumX Metrics