Don’t regulate me or I’ll capture you!

Does the public choice critique of government boil down to the following (threat)?

“Don’t regulate me or I’ll capture you!” [This would be a nice title for an article, no?]

Of course, no one ever says this. It would be bad PR and antagonistic, perhaps raising the costs of capture, I suppose. It might even prompt government to pursue reforms that better insulated government officials and politicians from capture.

But the risk of capture argument is made so frequently in public policy discourse (often along with arguments about government ineptitude and poorly aligned incentives). I don’t mean to suggest that the risk is unimportant; to the contrary, capture occurs all too often and imposes significant costs on society. But I have always found it odd that the “risk of capture” argument leads people to conclude that government should simply not act or regulate, and should instead ignore whatever problem or market failure that would otherwise justify intervention. Often, this conclusion is premised on the belief that the market will fix things over the long run–a belief that makes little to no sense for some important social problems. Instead of dismissing government, it would seem to make sense to focus on reforming government to better insulate political and regulatory actors from corrupting influences and to enable government to better address social problems. Not an easy task, but probably better than relying on self-regulation or self-correcting markets.

I meant to post this a few months ago to congratulate Larry Lessig for shifting his academic focus to battling public corruption. I look forward to following his progress and perhaps contributing where I can. As he has highlighted recently, the issue of reforming government may be emerging as a central issue in the upcoming election.