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Cultural Capture Of Antitrust Is More Likely In America Than Europe

 |  September 2, 2022

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…