Failure to Capture: Why Business Does Not Control the Rulemaking Process
71 Pages Posted: 17 Aug 2020
Date Written: July 15, 2020
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: Suggested Citation