What are government regulations?
Government regulations are a set of laws that control the way that a business can operate. While certain regulations can achieve important social benefits, such as reducing pollution, many regulations push prices up and make it harder for new firms to compete with existing ones. In order to regulate smartly and efficiently, we need to independently analyze both the benefits and the costs of proposed regulations before they go into effect, as well as measure and track their impact periodically to reevaluate them once they are implemented.
What is regulatory capture?
Regulatory capture is an economic theory that says regulatory agencies may come to be dominated by the industries or interests they are charged with regulating. The result is that the agency, which is charged with acting in the public's interest, instead acts in ways that benefit the industry it is supposed to be regulating.
Are there any examples of successful regulations?
One type of regulation that has thus far worked well is safety regulation of US nuclear power plants. A key has been the safety inspection and review by other power plant operators. Recognizing that a problem in one plant by one operator is likely to become likely substantive, the companies agreed among themselves to submit to an inspection by their peers.