In and Out of the Revolving Door: Making Sense of Regulatory Capture

The concept of regulatory capture is multidimensional according to data from Australian nursing home inspectors. There are three empirically distinct forms of capture: identification with the industry, sympathy with the particular problems that regulated firms confront in meeting standards, and absence of toughness. Inspectors who have prior senior management experience in the industry tend to be less tough in their attitudes to regulatory enforcement. For the other two types of capture, it is not coming in the revolving door (from an industry job), but aspirations to go out of the revolving door (to an industry job) that predicts capture. Captured regulatory attitudes and revolving door variables have little power, however, in explaining the toughness of actual enforcement practices. We do find that over time tougher inspectors are more likely to leave the regulatory agency than softer inspectors. These data are used to inform a policy analysis of capture and corruption. It is concluded that there is limited analytical merit in a conception of capture as an enduring unitary character trait that is structurally determined by a history of interest group affiliations. Capture, we attempt to show, is instead a situational problem that requires situational solutions. Constraining the free movement of the revolving door by restricting regulatory appointments from or to the regulated industry is an example of a flawed policy grounded in an overdrawn structural determinism.