Which of the following would best explain why regulatory capture is a problem?
A) The regulations implemented tend to reduce the proﬁtability of the regulated industry and reduce global competitiveness.
B) Regulatory capture unduly increases the size and power of government, increasing costs for taxpayers.
C) Individuals implementing the regulations lack expertise about the industry and therefore make poor regulatory choices.
D) The regulations implemented serve the private interests of the regulated industry, rather than addressing social interests such as consumer safety and environmental protection.

Question

Quizplus · Accepted Answer

Regulatory capture occurs when the regulatory agency responsible for overseeing an industry becomes too closely aligned with the private interests of that industry rather than serving the broader public interest. This can lead to regulations being implemented that prioritize the profitability of the industry at the expense of important social interests such as consumer safety and environmental protection.

Which of the Following Would Best Explain Why Regulatory Capture