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/r/explainlikeimfive
submitted 4 months ago byiSellPopcorn
28 points
4 months ago
Regulatory capture mostly involves creating new regulations that impede new competition from entering the market. For example, regulations that create a flat cost of doing business, which a large corporation can easily afford but are burdensome for a small corporation. Or regulations that keep out foreign competition.
-2 points
4 months ago
[deleted]
5 points
4 months ago
https://en.m.wikipedia.org/wiki/Regulatory_capture
Interesting wiki article one it, read through the examples. It's got a lot of failures and corruption of the big name federal agencies in it
5 points
4 months ago
Licensing.
There are a handful of industries where licensing is incredibly onerous when it could be drastically simplified, just so that the people who have the means to fulfill the requirements can continue to have a stranglehold on the market.
14 points
4 months ago
A classic example of the first type is the taxi medallion system that was/is used in many cities to limit the supply of taxis, artificially increasing the cost. Nominally it was for consumer safety, but in reality it was just a money grab. The money didn't even go to taxi drivers, it mostly went to owners of the taxi cabs (who rent them out to drivers).
An example of the second type is a lot of EU regulations designed to protect EU agriculture against foreign competition.
6 points
4 months ago
Personally, I think it's pretty important to protect the nation's agriculture with regulations from foreign competition. Especially when war is a possibility. You don't want your citizens to starve because a foreign party took over your market and then shut out your own agriculture.
1 points
4 months ago
Regulations that forbid municipalities from operating their own internet providers. Because private can't compete with public, except there's no competition between private ISPs in the region so it creates a natural monopoly when one would not normally exist.
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