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Capture Theory

In: Business and Management

Submitted By supipi123
Words 1246
Pages 5
Question: 3.27 More and more regulations have immerged in to the market since an increase in financial crises have come into the existence. Attention has been drawn into the debate between those who support or call more regulations of the private sector to protect public goods and those who argue for reducing or eliminating such regulations which are based on regulations would do further damage to the economy by restricting business. Another important area to be considered is about the regulations been captured. The theory of regulatory capture or capture theory argues that although regulations might be introduced to the aim of protecting the public interest, it will not be ultimately achieved because in the process of introducing regulations the organizations that are subjected to the regulation will finally come to control the regulators. There is ample evidence to prove that regulatory capture is taken place in a variety of forms. The scenario of Dr. Batterhams role is reviewed in this regard. Dr. Batterham was the chief scientist and mean while he held the position of chief technologist for Rio Tinto. This dual role made the senate committee to recommend the position of federal governments chief scientist should be full time after the found there was a conflict of interest between the two job roles. The role of chief scientist also included to assist in assuring the public interest in science and technology is converged to national priority issues . Every individual on earth applauds regulations immune to capture. It arguments the economy to the highest notch.

It is crystal clear that there are economic benefits to an industry if it is able to capture the body that regulates it. There are at least five ways according to Mitnick (1980) in which a regulated industry could capture a regulatory body. They are: * Capture is said to occur if the regulated…...

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