Preventing Capture Through Consumer Empowerment Programs: Some Evidence from Insurance Regulation

Schwarcz, Daniel

doi:10.2139/ssrn.1983321

Cited by 9 publications

(16 citation statements)

References 11 publications

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“…Similarly, economic development can be categorized as client politics in Wilson's (1973) policy typology, where costs are diffuse and benefits concentrated. In later work, Wilson (1989) explains that client politics create a high risk of capture unless the power of industry is balanced by a variety of groups (see also W. D. Berry, 1984;Gormley, 1982;Rourke, 1991;Sabatier, 1975;Schwarcz, 2014). Therefore, while regulation weakening came to characterize many of the empirical treatments of capture, any policy domain in which industry can engage in rent seeking can be considered at risk of capture (Carpenter & Moss, 2014).…”

Section: The Capture Model and Economic Development Policymentioning

confidence: 99%

Captured Development

Jansa

Gray

2016

Economic Development Quarterly

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Scholars focus on interstate competition and intrastate economic conditions as the primary determinants of state economic development policies, including direct subsidies. New data from the Good Jobs First Subsidy Tracker illustrates large differences in subsidy spending across the states and that established firms are the disproportionate beneficiaries. In light of this new evidence, we argue that the political presence of the business sector within the state is an important determinant of state subsidy spending. A large political presence helps forward industry interests before government and has the potential to capture state governments. We find support for the cultural capture model by demonstrating that a greater number of lobbyists and campaign contributions from businesses leads to more subsidy spending, all else equal. We conclude that subsidies, and which companies receive them, are a product of both politics and economics.

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Section: The Capture Model and Economic Development Policymentioning

confidence: 99%

Captured Development

Jansa

Gray

2016

Economic Development Quarterly

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“…Alongside these is an emergent body of scholarship that looks at regulatory capture in the financial sector (Carpenter & Moss, 2014;Etzioni, 2009;Lokanan, 2014b;Schwarcz, 2013). Central to the arguments presented is this stream of literature is that the very features of the financial sector may make it susceptible to capture (Hardy, 2006;Boyer & Ponce, 2012;Carpenter & Moss, 2014;Kwak, 2014).…”

Section: Theory and Literature Reviewmentioning

confidence: 99%

“…First, while a large body of research on regulatory capture has explicitly addressed utility regulation and, of late, political influence in regulation (Atkinson & Nowell, 1994;Dal Bó, 2006;Berry, 1979;Kelleher & Yackee, 2009), very little work has been done on regulatory capture and enforcement in the finance sector (Carpenter, 2014;Dal Bó, 2006;Etzioni, 2009Etzioni, , 2012Lokanan, 2014aLokanan, , 2014bSchwarcz, 2013). The present paper fills this gap in the financial regulatory literature concerning the failure of self-regulation in Canada's securities markets and, at the same time, sends a real message for legislators, securities market participants, regulators, investment bankers and publicly traded firms that self-regulation does not work in finance.…”

Section: Contributions To the Literature And To Practicementioning

confidence: 99%

“…While not an exhaustive list, capture theorists from both the centre right (Stigler, 1971;Posner, 1974) and the liberal left (Kolko, 1963;Lowi, 1969;Merrill, 1997;Dal Bó, 2006;Etzioni, 2009) have outlined various ways in which regulatory capture occurs. Some of the more common ways of regulatory capture, as highlighted, in the literature are as follows: special interest groups using their influence to shape regulation (Novak, 2014;Leight, 2010;Schwarcz;Potter, Olejarski, & Pfister, 2014); diluting of regulation through amendments (Croley, 2008;Veksler, 2015); repeal of existing regulation to suit special interest groups (Benmelech & Moskowitz, 2009); manipulation of regulators (Lokanan, 2014b;Wu, Johan, Rui, 2014); and, weakened enforcement of existing regulatory standards (Carpenter, 2014;Coates, 2007;Etzioni, 2012;Braithwaite, 2013).…”

Section: Introductionmentioning

confidence: 99%

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Regulatory Capture of Regulators: The Case of the Investment Dealers Association of Canada

Lokanan

2017

International Journal of Public Administration

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“…See also Schwarcz (), whose work focuses the problem of collective action in regulatory processes, in particular, considering the role of consumer power in counterweighting industry interests.…”

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confidence: 99%

The Regulatory Gift: Politics, regulation and governance

Browne

2018

Regulation & Governance

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This article introduces the “regulatory gift” as a conceptual framework for understanding a particular form of government‐led deregulation that is presented as central to the public interest. Contra to theories of regulatory capture, government corruption, “insider” personal interest, or profit‐seeking theories of regulation, the regulatory gift describes reform that is overtly designed by government to reduce or reorient regulators’ functions to the advantage of the regulated and in line with market objectives on a potentially macro (rather than industry‐specific) scale. As a conceptual framework, the regulatory gift is intended to be applicable across regulated sectors of democratic states and in this article the empirical sections evidence the practice of regulatory gifting in contemporary United Kingdom (UK) politics. Specifically, this article analyses the 2011 UK Public Bodies Act, affecting some 900 regulatory public bodies and its correlative legislation, the 2014 Regulator's Code, the 2015 Deregulation Act, and the 2016 Enterprise Bill. The article concludes that while in some cases the regulatory gift may be aligned with the public interest – delivering on cost reduction, enhancing efficiency, and stimulating innovation – this will not always be the case. As the case study of the regulatory body, the UK Human Fertilisation and Embryology Authority, demonstrates, despite the explicit claims made by legislators, the regulatory gift has the potential to significantly undermine the public interest.

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Preventing Capture Through Consumer Empowerment Programs: Some Evidence from Insurance Regulation

Cited by 9 publications

References 11 publications

Captured Development

Captured Development

Regulatory Capture of Regulators: The Case of the Investment Dealers Association of Canada

The Regulatory Gift: Politics, regulation and governance

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