"Regulatory capture" refers to the situation where a government agency charged with supervising and regulating a particular industry is
A) strongly inﬂuenced by the ﬁrms in the very industry that it is regulating.
B) headed by bureaucrats who have a "lock" on their positions, without any rivals.
C) completely dominating and controlling the actions of ﬁrms in the industry.
D) headed by unelected government oﬃcials who have no strong desire to regulate.

Question

Quizplus · Accepted Answer

Regulatory capture occurs when the government agency responsible for regulating an industry becomes too closely aligned with the industry it is meant to regulate, resulting in the agency being strongly influenced by the firms within that industry. This can make it difficult for the agency to objectively regulate the industry in the public interest, as their decisions may be influenced by the preferences and interests of the industry they are supposed to regulate. The other choices do not accurately describe regulatory capture.

"Regulatory Capture" Refers to the Situation Where a Government Agency