By: Jan Broulik (Pro Market)
As a reaction to the global financial crisis, James Kwak introduced the notion of cultural capture. He proposed that one of the reasons why US financial policy became too lenient toward the banking industry was that financial officials had socially identified with representatives of the industry, held them in high regard, and maintained intense interpersonal relationships with them. Labeling those effects of social interaction as cultural capture, Kwak admonished that it may also arise in other areas of economic policy, possibly without any awareness on the part of the officials or even the industry.
Cultural capture is a species of capture concerning public officials’ minds. For one commentator, such capture of minds obtains when “officials’ actions, interpretations, and perceptions of reality come into alignment with those of the actors they are supposed to be regulating.” For others, it entails “institutionalization of industry views as the regulator’s view,” respectively “align[ing] the way in which regulators think about problems with the view of the industry they regulate.” Others still say that the officials “come to see the world the way that [the] regulated entities do,” “end up sharing the views of the industry,” or start to “think like it.”
This is all to say that the concept of cultural capture differs from the traditional account of regulatory capture according to which public officials serve special interests because doing so benefits them privately. Instead, cultural capture takes place through the officials developing (an excessive amount of) genuine pro-industry views…
Featured News
T-Mobile’s Acquisition of Ka’ena Corporation Receives FCC Approval
Apr 26, 2024 by
CPI
UK Regulator Announces Two New Senior Executive Appointments
Apr 26, 2024 by
CPI
Paramount Global and Skydance Media Near Merger Deal, Eyeing CEO Change
Apr 26, 2024 by
CPI
BHP Unveils £31bn Mining Megamerger Proposal with Anglo American
Apr 25, 2024 by
nhoch@pymnts.com
ByteDance Prefers Shutdown Over Sale of TikTok Amid US Ban Threats
Apr 25, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI