Tripartism: Regulatory Capture and Empowerment, 16 Law and Social Inquiry 435 (1991)
(with John Braithwaite).
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The features of regulatory encounters that foster the evolution of cooperation
often also encourage the evolution of capture and corruption. Solutions to the problems
of capture and corruption limiting discretion, multiple-industry rather than single-
industry agency jurisdiction, and rotating personnel inhibit the evolution of cooperation.
Tripartism empowering public interest groups is advanced as a way to solve this
policy dilemma. A game theoretic analysis of capture and tripartism is juxtaposed
against an empowerment theory of republican tripartism. Surprisingly, both formulations
lead to the conclusion that some forms of capture are desirable. the strengths from
converging the weaknesses of these two formulations show how certain forms of
tripartism might prevent harmful capture, identify and encourage efficient capture,
enhance the attainment of regulatory goals, and strengthen democracy. While the case
we make for tripartism is purely theoretical and general in its application to all domains
of business regulation, our conclusion is a cal for praxis to flesh out the contexts in
which the theory is true or false.
Business regulation is often modeled as a game between two players the
regulatory agency and the firm. Naturally the world is more complicated than this. On
the state side there are such other players as prosecutors and oversight committees of
legislators, while on the business side there are such other players as industry
associations. On both sides, individual actors wear many hats. So it is a rash
simplification to interpret individual actions as those, on the one hand, of the faithful
fiduciary of the profitability interests of the firm and, on the other, the fiduciary of agency
interests in securing compliance with its statute.
This article seeks to problematize this simplification somewhat by modeling the
idea of capture. Capture is a notion that has enjoyed political appeal among critics of
regulation from both the right and left. Among economists, models of regulatory capture
have gained wide acceptance. Yet capture has not seemed to be theoretically or
empirically fertile to many sociologists and political scientists working in the regulation
literature, especially when applied to what Americans call social regulation. Here we will
consider whether capture has proved analytically barren for these social scientists
because of a failure to disaggregate different forms of capture. Ironically, it is an
economic analysis that clarifies the disaggregation needed to enable a more fertile
social analysis of capture. The economic and social theories that converge on the
efficacy of tripartism are each, standing alone, weak theories. What we hope to show in
this article is how the weaker points of one theory are covered by the stronger points of
the others.
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