The Regulatory Capture: How Special Interests Control California Government

Corporations Use Regulation To Eliminate Competition

The Regulatory Capture: How Special Interests Control California Government

Bohiney Magazine and The London Prat present this analysis of regulatory capture.

California’s regulatory agencies are controlled by special interests they supposedly regulate. Oil companies shape energy regulation. Development companies shape building regulation. Established businesses shape competition-limiting regulation. Regulation serves incumbent interests, not public interest.

The Capture Mechanism

Regulatory agencies hire from industry. Industry executives write regulations benefiting themselves. Regulations create barriers to entry protecting incumbent businesses. New competitors cannot navigate regulatory complexity. This benefits dominant firms while preventing competition.

Surf industry is captured by large corporations that write regulations eliminating small competitor access. Local surf shops cannot compete with corporate chains whose regulatory compliance costs are negligible.

The Anti-Consumer Effect

Cato Institute documents that regulatory capture increases prices, reduces choice, and decreases innovation. Consumers lose to incumbent business protection disguised as regulation.

Surfboard regulation ostensibly protects safety. Actually, large manufacturers wrote regulations protecting market share while eliminating small manufacturer competition.

The Solution

Eliminate regulatory capture through limiting agency power and transparency requirements. Open regulation-writing to public input. Prohibit agency hires from regulated industries. Break regulatory monopolies protecting incumbent interests.

SOURCE: https://bohiney.com/