A Revisionist History Of Regulatory Capture By William J. Novak

The book is divided into fifteen chapters which are divided into four sections. The first section called “Failures of capture scholarship” talks about history, concept, and measure of regulatory capture. It is important to understand theoretically what capture is, how it was created and how to detect and measure it. Second section titled “New conceptions of capture – mechanisms, and outcomes” describes different kinds of capture, as well as its connection to important historical events such as financial crisis. The third section titled “Regulatory case studies” focuses purely on explaining the regulatory capture in a practical way, based on real-life examples, such as Gulf Oil Spill, Coal Mine Safety Regulation, and others.

The last section, “The possibility of preventing capture” focuses on potentially possible actions that might be taken to prevent the future presence of regulative capture. To be able to achieve a deeper understanding capture it is important to understand how and when it was created. Although, some of the authors use quite a skeptical approach to invoke the starting time of capture in the 1970s. In William Novak´s text, it is possible to read about his opposition to the commonly known historical hypothesis, emphasizing that its actual development, the capture experienced in the 1950s thanks to S. Huntington and M. Bernstein. In the 1970s, the, however, the theory of capture had its heyday receiving each time more and more attention together with critique.

According to Novak, the idea that the architects of America´s administrative state initiated to cooperate capture by failing to consider institutional design is mistaken. During the process of creation of the regulatory commission, there was a question which interests – public or private – to consider first. Remembering that the term “capture” was used for the first time in the middle of the twentieth century, the extensive concept of it goes back well into the ninetieth century and its antecedent “corruption” well to the beginning of the Republic and beyond, moreover it is believed that it has a foundation in western political thoughts. Considering the US history, it is possible to observe that capture theory many times assumed that to solve the economic problem, the political solutions were necessary implemented by regulations.

Throughout the chapter, Novak arrives at the conclusion that the capture theorists of the 1970s “went somehow astray in assuming that economic regulation was primarily motivated by an economic problem”. Continuation of Novak´s inferences in Carpenter´s chapter ¨Detecting and measuring capture” in which he emphasized that to conduct proper capture analysis it is important to follow clear standards of evidence and a solid criticism regarding claims of regulatory capture. Also, he underlines the need to use two research strategies which he later describes – measurement of public versus industry interest in regulatory studies and mechanisms. The two strategies consist of finding the captured regulation and then demonstrating theoretically and empirically that we are better off without it with further deregulation process. In capture research, it is crucial to combine the measurements with critique.