Capture Theory of Regulation - Investment & Finance Definition
A theory developed by George Stigler that says an industry can benefit from regulation if it can capture the regulatory agency involved. This can happen if the industry’s political influence and technical knowledge makes the regulatory agency dependent on it. Political appointees from the industry, along with the agency’s need for informal cooperation from the industry, help create a situation in which the agency is captured.Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.