I heard about this term recently through the July 30 episode of NPR’s Planet Money show titled, “Summer School 4: Who are all these regulations protecting?”

In the Planet Money episode, the hosts interview business managers and economists to explore how patents specifically within intellectual property can lead to a monopoly in the one thing that they are designed to protect and invites questions on whether a patent can either promote or hinder innovation and further progress in the field.

In an interview, Professor Joan Ricard-Uget explains, “Regulatory capture is when an agency that should act in the public interest instead advances the special interests of individuals or of entities like companies that it is meant to regulate. And that’s bad because instead of fostering the interests of society at large, it fosters the interests of a particular group of people with something to protect.”

CFA Institute Research & Policy Institute: “The concept of Regulatory Capture (Reg Capture) typically refers to a phenomenon that occurs when a regulatory agency that is created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate an industry or sector the agency is charged with regulating. When regulatory capture occurs, the interests of firms or political groups are given priority or favor over the interests of the public.”

Investopedia: “Regulatory capture is a process by which regulatory agencies may come to be dominated by the industries or interests they are charged with regulating. The result is that an agency, charged with acting in the public interest, instead acts in ways that benefit incumbent firms in the industry it is supposed to be scrutinizing.”

Georgetown Law: “Regulatory capture is a phenomenon where regulators become unduly influenced by the industries they are tasked with regulating.”

Regulators typically have specialized knowledge in the industry that they regulate, and so this necessitates the need for an economic theory to check the special interests and motivations of government agencies. “Captured” agencies may not be inherently corrupt, but there is the risk we the public must continually check and question, of course.