Recent crises in (de)regulated industries – most notably, the financial system’s collapse, the Gulf of Mexico oil spill, and the 2006 West Virginia mine disaster – have made it clear that regulation is both necessary and, in many cases, in need of significant improvement. Now more than ever, we need to know when and how regulation can most effectively channel economic activity in safe and productive directions. Unfortunately, contemporary scholarship often falls short in identifying which regulatory regimes are necessary, which are successful, and how weak (or “captured”) regulation might be improved. Careful observation (and even gut instinct) suggests that reality is more complicated. Rather than seeing uniform and complete capture, observers see a spectrum, with some regulations and regulatory agencies doing a better job than others of resisting undue influence from special interests and achieving the common good.
In 2009 and 2010, the financial regulatory reform process provided an opportunity for Tobin scholars to share expertise with policymakers in the Senate, House, and Administration, and to hear a common refrain: How can we design new agencies and regulation that will be least vulnerable to regulatory capture? In an effort to advance understanding on the subject, the Tobin Project launched a new effort on Preventing Regulatory Capture in 2010, asking how regulation might be optimized to solve social problems without falling prey to industry capture. In 2013, this initiative will produce an academic volume of new research, published by Cambridge University Press and edited by Daniel Carpenter (Harvard University, Government) and David Moss (Harvard Business School), entitled Preventing Regulatory Capture: Special Interest Influence and How to Limit It.