Регуляторлық бақылаудың ықпалға түсуі және саяси коррупция

Form of political corruption
In politics, regulatory capture (also called agency capture) is a form of corruption of authority that occurs when a political entity, policymaker, or regulator is co opted to serve the commercial, ideological, or political interests of a minor constituency, such as a particular geographic area, industry, profession, or ideological group. When regulatory capture occurs, a special interest is prioritized over the general interests of the public, leading to a net loss for society. The theory of client politics is related to that of rent seeking and political failure; client politics "occurs when most or all of the benefits of a program go to some single, reasonably small interest (e. g., industry, profession, or locality) but most or all of the costs will be borne by a large number of people (for example, all taxpayers)".

For public choice theorists, regulatory capture occurs because groups or individuals with high stakes interests in the outcome of policy or regulatory decisions can be expected to focus their resources and energies to gain the policy outcomes they prefer, while members of the public, each with only a tiny individual stake in the outcome, will ignore it altogether. Regulatory capture refers to the actions by interest groups when this is successful at influencing the staff or commission members of the regulator. Regulatory capture theory is a core focus of the branch of public choice referred to as the economics of regulation; economists in this specialty are critical of conceptualizations of governmental regulatory intervention as being motivated to protect public good. Often cited articles include Bernstein (1955), Huntington (1952), Laffont & Tirole (1991), and Levine & Forrence (1990). The theory of regulatory capture is associated with Nobel laureate economist George Stigler, one of its major developers. Likelihood of regulatory capture is a risk to which an agency is exposed by its very nature. This suggests that a regulator should be protected from outside influence as much as possible. Alternatively, it may be better to not create a given agency at all. A captured regulator is often worse than no regulation, because it wields the authority of government. However, increased transparency of the agency may mitigate the effects of capture. Recent evidence suggests that, even in mature democracies with high levels of transparency and media freedom, more extensive and complex regulatory environments are associated with higher levels of corruption (including regulatory capture). George Stigler framed the problem of regulatory capture as "the problem of discovering when and why an industry is able to use the state for its purposes". He focuses on whole industries. But, it is never a whole industry which is ‘capturing’ its regulators, but only the big companies which, using the tool of the revolving door, ‘highjack’ the regulator by offering high salaries. Brezis and Cariolle (2019) has shown that the connected firms are always the big firms. Indeed, the top 5 financial companies concentrate around 80% of the stock of revolving door movements and regulatory capture. This leads to inequality of influence among firms in the same sector. It should also be noted that regulatory capture in developed country is not anymore related to corruption and illegal behavior, but to abuse of power.

There is substantial academic literature suggesting that smaller government units are easier for small, concentrated industries to capture than large ones. For example, a group of states or provinces with a large timber industry might have their legislature and/or their delegation to the national legislature captured by lumber companies. These states or provinces then become the voice of the industry, even to the point of blocking national policies that would be preferred by the majority across the whole country. Moore and Giovinazzo (2012) call this "distortion gap". The opposite is possible. Very large and powerful industries (e. g., energy, banking, weapon system construction) can capture national governments, and then use that power to block policies at the national, state or provincial level that the voters may want, although even local interests can thwart national priorities.

The review of the United States' history of regulation at the end of the 19th century, especially the regulation of railway tariffs by the Interstate Commerce Commission (ICC) in 1887, revealed that regulations and market failures are not co relevant. At least until the 1960s, regulation was developed in the direction of favoring producers, and regulation increased the profits of manufacturers within the industry. In potentially competitive industries such as trucking and taxis, regulations allow higher prices and prevent entrants. In monopoly industries such as electric power generation, there is evidence that regulation has little effect on prices, so the industry can earn excess profits. Evidence shows that regulation is beneficial to producers. These observations led to the emergence and development of regulatory capture theory. Contrary to regulatory public interest theory, this holds that the provision of regulation adapts to the industry's needs, that is, both the legislator and regulator are controlled and captured by the industry. The basic view of the theory is that the regulator gets captured no matter how the regulatory scheme is designed. The implication is that regulation increases the industry's profits rather than the social welfare. This was essentially a purely capture theory in the early days, that is, the regulators and legislators were captured and controlled by the industry. Later regulatory models, such as those by Stigler, Pelzmann, or Becker, follow the regulatory capture theory in the eyes of Posner (1974) and others. All these models reflect that regulators and legislators are trying to maximize private, not public, interests. They use "private interest" theory to explain the origin and purpose of regulation. Aton (1986) argues that Stigler's theoretical logic is clearer and more central than the previous "capture theory" hypothesis, but it is difficult to distinguish between the two. Regulatory capture theory has a specific meaning, that is, an experience statement that regulations are beneficial for producers in real life. So it is essentially not a true regulatory theory. Although the analysis results are similar to the Stigler model, the methods are completely different. Stigler used standard economic analysis methods to analyze the regulation behavior, then created a new regulatory theory – regulatory economic theory. Of course, different divisions depend on the criteria for division, and they essentially depend on the researchers' different understanding of specific concepts. Justice Douglas' dissent in Sierra Club v. Morton (1972) describes concern that regulators become too favorable with their regulated industries.

With the advent of the European standard for motorcyclists' protective clothing (EN 17092), Bennetts and Motor Cycle News asserted that "the testing standards now used to certify motorcycle riding kit have reduced protection levels by as much as 90%" because of regulatory capture as industry representatives accounted for half the standards committee members including its chair, noting "Few will be aware of the intense opposition [to higher safety standards] from within the industry." However, there is a shortage of academic research into regulatory capture regarding motorcyclists' PPE standards.

In the aftermath of the 2010 Deepwater Horizon oil spill, the Minerals Management Service (MMS), which had regulatory responsibility for offshore oil drilling, was widely cited as an example of regulatory capture. The MMS then became the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) and on October 1, 2010, the collection of mineral leases was split off from the agency and placed under the Department of the Interior as the Office of Natural Resources Revenue (ONRR). On October 1, 2011, BOEMRE was then split into two bureaus, the Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM). The three stage reorganization, including the name change to BOEMRE, was part of a re organization by Ken Salazar, Salazar's appointment was controversial because of his ties to the energy industry. As a senator, Salazar voted against an amendment to repeal tax breaks for ExxonMobil and other major petroleum companies and in 2006, he voted to end protections that limit offshore oil drilling in Florida's Gulf Coast. One of Salazar's immediate tasks was to "[end] the department's coziness with the industries it regulates" BP and other companies were also given a blanket exemption (categorical exclusion) from having to provide environmental impact statements. Michael Bromwich, head of BOEMRE, said he was disturbed by the speed at which some oil and gas companies were shrugging off Deepwater Horizon as "a complete aberration, a perfect storm, one in a million", but would nonetheless soon be granting more permits to drill for oil and gas in the gulf. The House Transportation and Infrastructure Committee investigated the matter after two FAA whistleblowers, inspectors Charalambe "Bobby" Boutris and Douglas E. Peters, contacted them. Boutris said he attempted to ground Southwest after finding cracks in the fuselage, but was prevented by supervisors he said were friendly with the airline. The committee subsequently held hearings in April 2008. James Oberstar, former chairman of the committee said its investigation uncovered a pattern of regulatory abuse and widespread regulatory lapses, allowing 117 aircraft to be operated commercially although not in compliance with FAA safety rules. With an estimated 29,000 flights daily, the United States hasn't had a major commercial aviation disaster since Colgan Air Flight 3407 in February 2009. On July 22, 2008, a bill was unanimously approved in the Democrat controlled House to tighten regulations concerning airplane maintenance procedures, including the establishment of a whistleblower office and a two year "cooling off" period that FAA inspectors or supervisors of inspectors must wait before they can work for those they regulated. The bill also required rotation of principal maintenance inspectors and stipulated that the word "customer" properly applies to the flying public, not those entities regulated by the FAA. In 2008 the FAA proposed to fine Southwest $10.2 million for failing to inspect older planes for cracks, and in 2009 Southwest and the FAA agreed that Southwest would pay a $7.5 million penalty and would adapt new safety procedures, with the fine doubling if Southwest failed to follow through. In September 2009, FAA Administrator Randy Babbitt issued a directive mandating that the agency use the term "customers" only to refer to the flying public. Prior to the deregulation of the US air industry, the Civil Aeronautics Board served to maintain an oligopoly of US airlines. In a June 2010 article on regulatory capture, the FAA was cited as an example of "old style" regulatory capture, "in which the airline industry openly dictates to its regulators its governing rules, arranging for not only beneficial regulation but placing key people to head these regulators". That the FAA was a victim of regulatory capture was one focus of a United States Senate Commerce Subcommittee on Aviation and Space meeting held in the wake of the Ethiopian Airlines Flight 302 crash that followed a previous crash of a Lion Air flight and claimed 157 lives. The Boeing 737 MAX platform that crashed had been subjected to only an "amended" airworthiness type certificate. The NTSB was tasked with the investigation of the FAA's certification process.

Legal scholars have pointed to the possibility that federal agencies such as the Federal Communications Commission (FCC) had been captured by media conglomerates. Peter Schuck of Yale Law School has argued that the FCC is subject to capture by the media industries' leaders and therefore reinforce the operation of corporate cartels in a form of "corporate socialism" that serves to "regressively tax consumers, impoverish small firms, inhibit new entry, stifle innovation, and diminish consumer choice". The FCC selectively granted communications licenses to some radio and television stations in a process that excludes other citizens and little stations from having access to the public. Michael K. Powell, who served on the FCC for eight years and was chairman for four, was appointed president and chief executive officer of the National Cable & Telecommunications Association, a lobby group, effective April 25, 2011. His role has been the cable industry's leading advocate, spokesman, and representative in its relationship with the U. S. Congress, the Administration, the FCC, and other federal agencies. Meredith Attwell Baker was one of the FCC commissioners who approved a controversial merger between NBC Universal and Comcast. Four months later, she announced her resignation from the FCC to join Comcast's Washington, D. C. lobbying office. Legally, she is prevented from lobbying anyone at the FCC for two years and an agreement made by Comcast with the FCC as a condition of approving the merger will ban her from lobbying any executive branch agency for life.

The Federal Reserve Bank of New York (New York Fed) is the most influential of the Federal Reserve Banking System. Part of the New York Fed's responsibilities is the regulation of Wall Street, but its president is selected by and reports to a board dominated by the chief executives of some of the banks it oversees. While the New York Fed has always had a closer relationship with Wall Street, during the years that Timothy Geithner was president, he became unusually close with the scions of Wall Street banks, Had the New York Fed allowed AIG to fail, the contracts would have been worth much less, resulting in much lower costs for any taxpayer funded bailout.

Historians, political scientists, and economists have often used the Interstate Commerce Commission (ICC), a now defunct federal regulatory body in the United States, as a classic example of regulatory capture. The creation of the ICC was the result of widespread and longstanding anti railroad agitation. Richard Olney, a prominent railroad lawyer, was asked by a railroad president if he could do something to get rid of the ICC. Olney, who later was appointed Attorney General in the Grover Cleveland administration, replied in an 1892 letter:
blockquote|The Commission is, or can be made, of great use to the railroads. It satisfies the popular clamor for a government supervision of the railroads, at the same time that supervision is almost entirely nominal. Further, the older such a commission gets to be, the more inclined it will be found to take the business and railroad view of things. The part of wisdom is not to destroy the Commission, but to utilize it. The ICC then failed to enforce Keys vs. Carolina Coach, attempting to justify segregation on a separate but equal basis for six years before being forced by the Department of Justice under then Attorney General Robert F. Kennedy to act in response to the Freedom Riders protests of 1961.

According to Frank N. von Hippel, despite the 1979 Three Mile Island accident in Pennsylvania, the Nuclear Regulatory Commission (NRC) has often been too timid in ensuring that America's 104 commercial reactors are operated safely:

Nuclear power is a textbook example of the problem of "regulatory capture" – in which an industry gains control of an agency meant to regulate it. Regulatory capture can be countered only by vigorous public scrutiny and Congressional oversight, but in the 32 years since Three Mile Island, interest in nuclear regulation has declined precipitously. Then candidate Barack Obama said in 2007 that the five member NRC had become "captive of the industries that it regulates" and Joe Biden indicated he had absolutely no confidence in the agency. The NRC has given a license to "every single reactor requesting one", according to Greenpeace USA nuclear policy analyst Jim Riccio to refer to the agency approval process as a "rubber stamp". In Vermont, ten days after the 2011 Tōhoku earthquake and tsunami that damaged Japan's Daiichi plant in Fukushima, the NRC approved a 20 year extension for the license of Vermont Yankee Nuclear Power Plant, although the Vermont state legislature had voted overwhelmingly to deny such an extension. The Vermont plant uses the same GE Mark 1 reactor design as the Fukushima Daiichi plant. Tyson Slocum, an energy expert at Public Citizen said the nuclear industry has "embedded itself in the political establishment" through "reliable friends from George Bush to Barack Obama", that the government "has really just become cheerleaders for the industry". Although the exception, there have been instances of a revolving door. Jeffrey Merrifield, who was on the NRC from 1997 to 2008 and was appointed by presidents Clinton and Bush, left the NRC to take an executive position at The Shaw Group,

The NRC Inspector General's report detailed that Merrifield had voted twice on matters involving companies he had contacted about job prospects. In addition, the report noted that Merrifield called a senior executive at another utility to request that he encourage other companies to return calls about his job search. The report also noted that Merrifield failed to report certain reimbursed travel expenses for himself and his family. One of those interviewed by the NRC Inspector General was Dale Klein, Chairman of the NRC at the time. Klein commented that "Merrifield generally was a staunch advocate of his chosen positions and was reluctant to change his mind." The interview notes also indicated that "other Commissioners also commented that Merrifield was excessively touting his accomplishments within [a] task force, but Klein indicated that this self promoting tendency by Merrifield was not unique to this issue." Although the NRC referred the matter to the Justice Department for civil action and to the U. S. Attorney's office for criminal action, neither office pursued the matter. The same U. S. Attorney's Office declined all 20 similar referrals for prosecution during the period from 2004 to 2008. A year long Associated Press (AP) investigation showed that the NRC, working with the industry, has relaxed regulations so that aging reactors can remain in operation. The AP found that wear and tear of plants, such as clogged lines, cracked parts, leaky seals, rust and other deterioration resulted in 26 alerts about emerging safety problems and may have been a factor in 113 of the 226 alerts issued by the NRC between 2005 and June 2011. However, a paper by Stanford University economics professors John B. Taylor and Frank A. Wolak compared the financial services and nuclear industries. While acknowledging both are susceptible in principle to regulatory capture, they concluded regulatory failure – including through regulatory capture – has been much more of a problem in the financial industry and even suggested the financial industry create an analog to the Institute of Nuclear Power Operations to reduce regulatory risk.

The Office of the Comptroller of the Currency (OCC) has strongly opposed the efforts of the 50 state attorneys general, who have banded together to penalize banks and reform the mortgage modification process, following the subprime mortgage crisis and the financial crisis of 2008. This example was cited in The New York Times as evidence that the OCC is "a captive of the banks it is supposed to regulate".

The United States Securities and Exchange Commission (SEC) has also been accused of acting in the interests of Wall Street banks and hedge funds and of dragging its feet or refusing to investigate cases or bring charges for fraud and insider trading. Financial analyst Harry Markopolos, who spent ten years trying to get the SEC to investigate Bernie Madoff, called the agency "nonfunctional, captive to the industry". Similarly in the case of the Allen Stanford Ponzi scheme, there were repeated warnings of fraud from both inside and outside the SEC for more than a decade. But the agency did not stop the fraud until 2009, after the Madoff scandal became public in 2008. The SEC has been found by the U. S. Senate Committee on Finance, the Senate Judiciary Committee and a federal district court to have illegally dismissed an employee in September 2005 who was critical of superiors' refusal to pursue Wall Street titan John Mack. Mack was suspected of giving insider information to Arthur J. Samberg, head of Pequot Capital Management, once one of the world's largest hedge funds. After more than four years of legal battles, former SEC investigator Gary J. Aguirre filed papers in a Freedom of Information Act (FOIA) case he had against the SEC, seeking an order to force the SEC to turn over Pequot investigation records to him on the grounds that they had not charged anyone. Aguirre had already provided incriminating evidence of Pequot's insider trading involving Microsoft trades to the SEC in a letter on January 2, 2009. The morning after Aguirre's FOIA papers were filed, A month later, the SEC settled Aguirre's wrongful termination lawsuit for $755,000. The list of officials who have left the SEC for highly lucrative jobs in the private sector and who sometimes have returned to the SEC includes Arthur Levitt, Robert Khuzami, Linda Chatman Thomsen, Richard H. Walker, Gary Lynch and Paul R. Berger. The Project on Government Oversight (POGO) released a report on May 13, 2011, which found that between 2006 and 2010, 219 former SEC employees sought to represent clients before the SEC. Former employees filed 789 statements notifying the SEC of their intent to represent outside clients before the commission, some filing within days of leaving the SEC.

The decision known as In re Amway Corp., and popularly called "Amway '79", made the FTC a captive regulator of the nascent multi level marketing industry. The situation came to a head in December 2012, when hedge fund Pershing Square Capital management announced a $1 billion short position against the company, and evidently expected the FTC to act, which, to date, it has not. From a forensic accounting standpoint, there is no difference between a Ponzi scheme like the Madoff scandal, and a pyramid scheme, except that in the latter the money is laundered through product sales, not investment. The press has widely reported on why the FTC won't act, e. g. Forbes though legal opinion has been very supportive in some quarters, such as William K. Black, who was instrumental in bringing thousands of criminal prosecutions in the S&L scandal, which was also rife with problems of regulatory capture.

The District of Columbia Taxicab Commission has been criticized for being beholden to taxi companies and drivers rather than ensuring that the district has access to a "safe, comfortable, efficient and affordable taxicab experience in well equipped vehicles".

Some commentators have acknowledged that while Washington Initiative 502 legalized marijuana, it did so in a manner that led to a state run monopoly on legal marijuana stores with prices far above that of the existing medical dispensaries, which the Washington State Liquor and Cannabis Board is now trying to close down in favor of the recreational stores, where prices are two to five times higher than the product can be obtained elsewhere.

In August 2009, the Canadian Radio television and Telecommunications Commission (CRTC) provisionally granted a request by Bell Canada to impose usage based billing on Internet wholesalers, igniting protest from both the wholesalers and consumers, who claimed that the CRTC was "kow towing to Bell". On February 2, 2011, CRTC chair Konrad von Finckenstein testified before the House of Commons Standing Committee on Industry, Science and Technology to defend the agency's decision. Critic Steve Anderson said, "The CRTC's stubbornness in the face of a mass public outcry demonstrates the strength of the Big Telecom lobby's influence. While government officials have recognized the need to protect citizens' communications interests, the CRTC has made it clear that their priorities lie elsewhere".

In Japan, the line may be blurred between the goal of solving a problem and the different goal of making it look as if the problem is being addressed.

Despite warnings about its safety, Japanese regulators from the Nuclear and Industrial Safety Agency (NISA) approved a 10 year extension for the oldest of the six reactors at Fukushima Daiichi just one month before a 9.0 magnitude earthquake and subsequent tsunami damaged reactors and caused a meltdown. The conclusion to the Diet of Japan's report on Fukushima attributed this directly to regulatory capture. Nuclear opponent Eisaku Sato, governor of Fukushima Prefecture from 1988 to 2006, said a conflict of interest is responsible for NISA's lack of effectiveness as a watchdog. Seismologist Takashi Nakata said, "The regulators just rubber stamp the utilities' reports". Both the ministry and the agency have ties with nuclear plant operators, such as Tokyo Electric. Some former ministry officials have been offered lucrative jobs in a practice called amakudari, "descent from heaven". Although warned about HIV contamination of blood products imported from the U. S., the ministry abruptly changed its position on heated and unheated blood products from the U. S., protecting the Green Cross and the Japanese pharmaceutical industry, keeping the Japanese market from being inundated with heat treated blood from the United States. Critics say the major task of the ministry is the protection of industry, rather than of the population. The IACT's membership includes pro tobacco groups in the Department of Agriculture and National Tobacco Administration, as well as "a representative from the Tobacco Industry to be nominated by the legitimate and recognized associations of the industry", the Philippine Tobacco Institute (composed of the largest local cigarette producers and distributors). The IACT's organization also limits the Philippines' enforcement of the World Health Organization Framework Convention on Tobacco Control.

The academic Thomas Alured Faunce has argued the World Trade Organization non violation nullification of benefits claims, particularly when inserted in bilateral trade agreements, can facilitate intense lobbying by industry which can result in effective regulatory capture of large areas of governmental policy.

McClean and Johnes argued that the sinking of the Titanic and its investigation illustrate an early example of regulatory failure and regulatory capture of the Board of Trade and Parliament by the shipping industry.