An explanation of regulatory capture

2 Responses to “An explanation of regulatory capture”

  1. Besides the state regulating market anarchists and classical liberals :-), the obvious solution to regulatory capture would be deregulation of industries and limiting the powers the state has to intervene in the economy in the first place. Does history and the literature offer much hope of this, though?

  2. Tom Palmer

    History offers hope, the literature less so. There have, in fact, been periods of dramatic freeing of markets and restriction of the state’s powers to intervene between willing participants in transactions. The literature of public choice explains regulatory capture rather well. It does not explain “deregulation” very well. We need more research and thought to understand processes of liberalization.

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