Regulatory Capture
Following Carpenter and Moss (2014, p. 13), regulatory capture can be defined as follows: “Regulatory capture is the result or process by which regulation, in law or application, is consistently or repeatedly directed away from the public interest and toward the interests of the regulated industry, by the intent or action of the industry itself.”
In the political economy of influence, influencing laws and regulations are key objectives for many companies. An obvious way in which corporations invests in influencing policymakers is through lobbying on their own account or via heavyweight trade associations. According to the Center for Responsive Politics based on data from the Senate Office of Public Records, the number of lobbyists at the Federal level in the US (Congress and federal agencies) was 11,652 in 2018 and total declared spending on lobbying was $3.45 billion. The pharmaceutical sector ranked as the top lobbying industry in 2018 with declared spending of $282 million, followed by the insurance sector ($158 million), and electronics ($147 million).
Since the Citizens United decision by the US Supreme Court in 2010, corporations have been allowed to spend as much as they want to convince people to vote for or against a political candidate in the United States. According to the 5-4 US Supreme Court decision, if the funds are not being spent in coordination with a political campaign, they “do not give rise to corruption or the appearance of corruption” (Citizens United v. Federal Election Comm’n (01/21/10), 2010, p. 42). Following the decision, independent expenditure-only committees (Super PACs) were created to raise unlimited sums of money to overtly advocate for or against political candidates. For the 2018 electoral cycle, Super PACs amassed $1.5 billions (OpenSecrets, 2021). For many, such political funding can be compared to open forms of corruption (Lessig, 2011).
In addition to direct lobbying, revolving doors (Public Citizen, 2005) and ubiquitous conflicts of interests in government and academia should also be considered important means of regulatory capture. For example, a growing body of literature accounts for how private interests manage to shape public law, especially in the case of international trade agreements (Brunelle, 2007; Drahos & Braithwaite, 2002; Gleeson et al., 2019; Lexchin & Gagnon, 2013; Sell, 2003). The pharmaceutical sector counted 1021 revolving door lobbyists (industry lobbyists who previously worked with government). It is the industry with the most revolving door lobbyists, followed by electronics (828), and general manufacturing and distribution (677) (OpenSecrets, 2021). Regulatory capture has become a central feature in the accumulation of intangible assets for dominant corporations, especially in the pharmaceutical sector.
The level of regulatory capture in the agro-chemical sector in Canada is particularly remarkable. In Quebec, the publicly financed public research institute on agriculture Centre de recherche sur les grains (CÉROM), whose mandate includes reducing the use of pesticides, is administered directly and only by private commercial interests, and was engaged in systematically hiding away studies that showed the need to reduce the use of pesticides in Quebec (Gerbet, 2018). At the Federal level, the Pest Management Regulatory Agency is regularly criticized for being too close to commercial interests (Louise Vandelac, 2021; Vandelac & Bacon, 2021). As for the Canadian Food Inspection Agency, it was shown that a recent proposal submitted by the agency on the modification of the labelling of genetically modified food was in fact directly authored by lobbyists (Gerbet, Thomas, 2022).
References
Brunelle, D. (2007). From World Order to Global Disorder: States, Markets, and Dissent. UBC Press.
Carpenter, D. P., & Moss, D. A. (Eds.). (2014). Preventing regulatory capture: Special interest influence and how to limit it. Cambridge University Press.
Drahos, P., & Braithwaite, J. (2002). Information Feudalism: Who Owns the Knowledge Economy? (1. publ). Earthscan.
Gerbet, T. (2018, March 5). Pesticides: Quand le privé administre la recherche publique québécoise. Radio-Canada.ca; Radio-Canada.ca. https://ici.radio-canada.ca/nouvelle/1086727/cerom-mapaq-agriculture-ministere-pesticides-grains-overbeek-recherche-prive-public
Gerbet, Thomas. (2022, September 19). OGM: Ottawa présente sa réforme en utilisant les fichiers d’un lobby agrochimique. Radio-Canada.ca. https://ici.radio-canada.ca/nouvelle/1915008/organisme-genetiquement-modifie-bio-federal-lobby-reforme
Gleeson, D., Lexchin, J., Labonté, R., Townsend, B., Gagnon, M.-A., Kohler, J., Forman, L., & Shadlen, K. C. (2019). Analyzing the impact of trade and investment agreements on pharmaceutical policy: Provisions, pathways and potential impacts. Globalization and Health, 15(Suppl 1), 78. https://doi.org/10.1186/s12992-019-0518-2
Citizens United v. Federal Election Comm’n (01/21/10), No. 08-205 (Supreme Court of the United States 2010). https://www.supremecourt.gov/opinions/09pdf/08-205.pdf
Lessig, L. (2011). Republic, lost: How money corrupts Congress–and a plan to stop it (1st ed). Twelve.
Lexchin, J., & Gagnon, M.-A. (2013). Impact of the trade agreement between Europe and Canada on the costs of patented drugs (Trade and Investment, p. 7) [Briefing Paper]. Canadian Centre for Policy Alternatives. https://policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2013/10/CETA_and_Pharmaceuticals.pdf
Louise Vandelac. (2021). Quand des pesticides empoisonnent la recherche, la réglementation et la démocratie. VertigO : la revue électronique en sciences de l’environnement.
OpenSecrets. (2021). Open secrets ranked sectors: Following the money in politics. OpenSecrets. https://www.opensecrets.org/federal-lobbying/ranked-sectors
Public Citizen. (2005). Congressional Revolving Doors: The Journey from Congress to K Street. Public Citizen. https://www.citizen.org/wp-content/uploads/Congressional-Revolving-Doors-2005.pdf
Sell, S. K. (2003). Private Power, Public Law: The Globalization of Intellectual Property Rights. Cambridge University Press.
Vandelac, L., & Bacon, M.-H. (2021, June 10). Une réforme urgente de la réglementation s’impose à Santé Canada. Le Devoir. https://www.ledevoir.com/opinion/idees/609405/idees-une-reforme-urgente-de-la-reglementation-s-impose-a-sante-canada