Working Papers
A Network Approach to Geopolitics
Economics Working Paper 26127
October 16, 2026
Published: October 11, 2018
Regulatory capture occurs when regulatory agencies become dominated by the very industries they were charged with regulating, prompting regulators to advance the goals and interests of those industries. While regulation is necessary and can be done well, it must always be balanced against the potential for unintended consequences that harm the consumers it is intended to protect.
Discussion Questions
- What are some solutions to regulatory capture?
- What is the source behind regulatory capture?
- Is regulatory capture inevitable?
Additional Resources
- Read John B. Taylor’s blog on “Regulatory Capture and Reckless Endangerment,” available here.
- Read “Free the Captives” in which Gary S. Becker discusses regulatory capture, available here.
- In “A Comparison of Government Regulation of Risk in the Financial Services and Nuclear Power Industries,” John B. Taylor and Frank A. Wolak examine and compare the problem of safety and soundness regulation in two industries that have dominated the headlines in recent years—nuclear power and financial services. Available here.
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