Most people imagine regulatory capture as a shadowy affair—envelopes passed under tables, winks between executives and commissioners, a conspiracy of the powerful against the public. This framing feels satisfying. It gives us villains to blame and a clear moral narrative.

But the reality is more unsettling. Regulatory capture typically emerges from perfectly reasonable behaviors by well-meaning people operating within flawed systems. The regulator who takes an industry job isn't necessarily corrupt. The agency that adopts industry-friendly interpretations isn't being bribed. Something more subtle is happening.

Understanding capture as a systemic property rather than individual failure changes everything about how we might prevent it. Conspiracy theories demand better people. Systemic analysis demands better structures. The second approach actually works.

Consider the fundamental problem facing any regulator. You're tasked with overseeing a complex industry—pharmaceuticals, telecommunications, finance. You need detailed technical knowledge to write effective rules. Where does that knowledge come from?

The regulated industry has thousands of specialists who live and breathe these details daily. Your agency has dozens of generalists juggling multiple responsibilities. The information asymmetry isn't a bug in the system—it's an unavoidable structural feature. Regulators must consult industry experts to do their jobs competently.

This creates what political economists call cognitive capture. Over time, regulators internalize industry frameworks not because they've been corrupted, but because those frameworks represent the most sophisticated available analysis. When everyone you consult sees a problem the same way, that perspective becomes the water you swim in.

The alignment deepens through repeated interaction. Regulators develop relationships with industry representatives. They learn to see problems through industry eyes. They begin unconsciously filtering out perspectives that don't fit the shared analytical framework. None of this requires bad faith. It emerges naturally from the information environment.

Takeaway

The agency with the most expertise sets the terms of debate. Whoever frames the question usually determines the answer.

The revolving door between regulatory agencies and regulated industries looks like obvious corruption from the outside. A commissioner leaves government and takes a million-dollar industry position. Surely they were being rewarded for favorable decisions?

Sometimes, yes. But the more common dynamic is subtler and harder to prevent. Most regulators aren't consciously trading favorable treatment for future employment. They're simply aware—at some level—that their career prospects depend on maintaining good relationships with potential employers.

This awareness shapes behavior without requiring explicit deals. The regulator who consistently antagonizes industry won't get those job offers. The one who demonstrates sophisticated understanding of industry concerns—who shows they can see things from the other side—becomes an attractive hire. The incentive structure rewards alignment even when no one intends capture.

Career concerns also affect who becomes a regulator in the first place. The most qualified candidates often come from industry backgrounds. They bring valuable expertise but also ingrained perspectives. Meanwhile, aggressive regulatory approaches create personal professional risk, while accommodating approaches create opportunity. The selection effects compound over time.

Takeaway

People don't need to be corrupt for incentives to shape their behavior. Career structures are accountability structures—examine where the career paths lead.

If capture emerges from system design rather than individual moral failure, prevention requires structural reform rather than better screening. Several institutional approaches show promise.

Diversifying information sources breaks the industry monopoly on expertise. Funding independent research institutions, requiring agencies to consult consumer advocates and academic experts, and creating internal agency capacity reduces dependence on regulated parties. The FDA's increased reliance on independent advisory committees represents one model.

Cooling-off periods and restrictions on post-government employment reduce career incentive distortions. But poorly designed restrictions can backfire, deterring talented people from government service entirely. The key is targeting the specific relationships that create the strongest capture risks.

Procedural requirements that force transparency in agency-industry interactions make subtle alignment more visible. When ex parte contacts must be documented, when lobbying meetings must be disclosed, when regulatory analysis must address competing perspectives, capture becomes harder to sustain. Sunlight doesn't eliminate the problem, but it raises the cost of accommodation.

Takeaway

You cannot hire your way out of a structural problem. Design institutions assuming capture pressures exist, then build countervailing forces into the architecture.

Regulatory capture persists because we misunderstand its nature. Treating it as corruption leads us to look for bad actors when we should be examining bad structures. The well-intentioned regulator operating within a poorly designed system will produce captured outcomes just as reliably as the corrupt one.

This reframing isn't meant to excuse anyone. Individuals retain moral responsibility for their choices. But effective reform requires seeing the system clearly—understanding how information flows, career incentives, and cognitive dynamics create predictable patterns regardless of who holds office.

The question isn't whether regulators are good people. It's whether we've built institutions that let good people produce good outcomes. Often, we haven't.