In chapters 2 and 3 of Climate of Contempt I describe the gap between folk wisdom about corporate dominance of the policymaking process and what empirical political science research says about that issue. That gap is fairly large. As a general matter, well-resourced businesses enjoy important lobbying advantages, but those advantages don’t amount to “control” or “capture” of policymaking – either in Congress or in agencies.[1]
Many Californians look at the mistakes that led to PG&E’s two 21st century bankruptcies and the company’s continuing ability to charge high rates for electricity, and infer that the company has “captured” the state public utility commission. But when scholars and reporters dig into PG&E’s problems and the ratemaking choices the PUC faces, they find much more complicated stories that elude simple labels like “capture.”
Make no mistake, industry certainly seeks favors from government, constantly; and anti-government conservatives try to weaken regulation where they can. For example, take a look at “Project 2025,” a set of plans (developed by conservative think tanks) to use the presidency to “greatly circumscribe” the regulatory missions of environmental and energy regulatory agencies (among others). And anecdotes, like the cartoonish corruption of the Trump Administration’s first EPA administrator, feed the instinct to infer “capture” by corporations whenever Congress or an agency fails to regulate some economic activity, or fails to regulate it as stringently as we might think they should.
Part of the problem may be about the different uses of the word “capture,” as Susan Yackee has argued. My experience co-teaching a class on regulation this year with my friend and colleague Wendy Wagner supports the Yackee diagnosis. I learned that Professor Wagner and I tend to use the term “capture” differently, and have different regulatory programs in our mind’s eye when we generalize about its frequency.
Another source of semantic confusion stems from the fact that “the public interest” is contested. In a pluralistic democracy we would expect there to be some disagreement over most complicated policy choices. But in our ideological bubbles it is easy to infer that policy choices we don’t like are contrary to the public interest.
Thus, when policymakers weigh the components of the energy trilemma differently than we do – e.g., by placing more weight on affordability and security vs. environmental impact – it can look like capture. Similarly, when presidential directives push a policy choice away from our preferred balance, we might suspect that industry “got to” the president or his advisors. Of course, we often don’t know whether that is the case, or if the president’s broader mandate simply led him to view the public interest differently than we do.
When we can point to demonstrable harm that results from a regulator’s decision not to choose the more stringent option, and that decision was favored by industry, that certainly looks like capture. But we should at least openly consider possible alternative explanations. For example, according to the insurance industry, the 1987 decision to abolish the 55 mph maximum speed limit on American roads has cost thousands of lives annually. Does that imply that Congress was “captured” by trucking companies or oil companies when it made that choice?
Susan Yackee’s recent research, linked above, offers some empirical support for the idea that we infer capture too often. Indeed, it is human nature. When my sense of the public interest is not adopted by Congress or an agency, it is uncomfortable to consider the possibility that my view is not very widely shared. It is much more comfortable to ascribe the policymaker’s choice to the influence of my opponent’s money or pressure. Every soccer parent whose children blame the referee for every loss understands this reflex.
Furthermore, as I describe in chapter 5, the real and difficult tradeoffs posed by the trilemma are more salient to people whose jobs depend on getting the balance right for their constituents: namely, elected politicians who are directly accountable to voters, or managers directly accountable to shareholders. By contrast, pundits, writers, advocates, lobbyists, and academics can push hard on one or the other component of the trilemma without risking their jobs.
Where it is present, electoral risk is a more potent driver of congressional behavior than industry pressure. Witness Ohio Democratic Senator Sherrod Brown, who is in a tough reelection battle. Consequently, he has joined Joe Manchin (D-WV) in supporting a bill to overturn the Biden EPA’s electric vehicle tax incentives, and co-signed a letter to the EPA objecting to aspects of the Biden Administration’s proposed rule on carbon emissions from power plants. In a formerly blue state that is turning red, demonstrating opposition to a fellow Democrat’s climate plans improves Brown’s reelection chances. And is so-called safe seats, that same pressure comes from one’s own party rather than the opposition.
In sum, if empirical social science is to be believed, voters have more influence over policymaking that modern folk wisdom suggests they do. And if the system isn’t nearly as “rigged” as people believe, then experts do damage to public understanding when they infer corruption too casually in public discourse, or default to capture to explain outcomes that seem too lax. That behavior adds another grain of sand to a spreading desert of cynicism about government. Liberal democracy requires a critical mass of faith that long run success is best achieved when we all play by the rules. When that critical mass is gone, I suspect we will miss it. – David Spence
——–
[1] On this issue my book cites several political scientists and legal scholars, but I neglected to cite the University of Miami’s Gabriel Scheffler’s 2020 article, “Failure to Capture: Why Business Does Not Control the Rulemaking Process,” in Maryland Law Review. I should have found this piece and cited him in the book.
———–
POSTSCRIPT (June 13, 2024): For an illuminating example of the subjective meaning of “capture” and its over-inference to describe unwanted policy choices, see this article ascribing the FERC’s 2024 transmission rulemakings to capture of the agency by the transmission industry. The orders can just as easily be explained as attempts to create market failure in the provision of transmission lines, which are characterized by unpriced positive externalities.
