Congressman David Price, Harvard Business School professor David Moss, and former North Carolina Commissioner of Banks Joseph Smith took part last Friday in a panel discussion: “Preventing Regulatory Capture” as part of the program in Rethinking Regulation at the Kenan Institute for Ethics at Duke.
Regulatory “capture” (a form of political corruption that occurs when a regulatory agency advances special concerns of interest groups that dominate the industry or sector it is charged with regulating rather than what is in the public’s interest) has recently been in the news with the coal ash spill by a Duke Energy facility into a North Carolina river as well as the proposed merger of Comcast and Time Warner and effects on net neutrality.
The panel responded to Preventing Regulatory Capture: Special Interest Influence and How to Limit It, a recent volume of essays co-edited by Moss, who is also the founder of The Tobin Project. Moss pointed out that while capture exists and special interests do sometimes shape policy, it tends to be overstated by media and analysts, further saying that people tend to claim capture with policies that they oppose.
Representative Price discussed his experiences as a public policy professor teaching ethics at Duke and in his thirteen terms in Congress, describing an “iron triangle” of collusion that can form among congressional committees, regulatory agencies, and industry. He said that while public and industry interests are not always mutually exclusive, policymakers have an imperative to identify what does benefit the public and act accordingly.
Smith discussed the importance of independence for supervisory agencies – independence from both special interests and political parties. In his current role as a litigator, he observed that regulatory problems that aren’t addressed properly through policy channels end up seeking resolution through lawsuits.
The panel concluded that while capture does exist, it often happens in more subtle ways than the media portrays. Scholars and analysts are encouraged to seek out instances of capture but to be rigorous in investigations so that good policy isn’t affected by false perceptions.
The panel discussion was one in a series of discussions sponsored by the Rethinking Regulation program at the Kenan Institute for Ethics, which often unite policymakers with an interdisciplinary group of Duke faculty from many departments, other signature institutes at Duke, and the professional schools.