In what way is regulatory capture corruption? What is the alternative? I'm reluctant to consider it corruption in the same sentence as bribery, despite that it is an inherent conflict of interest.
If they are captured by the companies they regulate, and serve the companies' interests rather than the public's, by definition their mission has been corrupted.
Your question is highly disingenuous.
Regardless, moving between industry and regulatory bodies isn't necessarily done in a corrupt manner. If you're the president of a state energy board, you don't need to break any rules to get a higher paying job in industry. you're already, perhaps necessarily, more qualified than almost any other candidates. This is not inherently corrupt, this is what OP was referring to (or, this is a common meme which is associated with what he described).
What part of "when a state regulatory agency, created to act in the public interest, instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating" don't you understand?
That is the definition of "regulatory capture".
Note that regulatory capture is not "balancing the public interest with commercial realities" or similar such wording.
If you're perhaps debating some other term, please provide us with an accepted term and definition of same, rather than creating a Lewis Carrol "glory" (see: http://sabian.org/looking_glass6.php) and passing off as accepted wisdom.
On my planet, the appearance of impropriety is considered largely as bad as actual impropriety. Taking an example from a US government website: http://ig.navy.mil/Complaints/Complaints%20%20(Appearance%20...
If the revolving door consistently operates between regulatory agencies and the organizations those agencies regulate, then yes, I'd say that this comprises systemic corruption.
It actually is, many times. Especially when companies are ready to pay up any amount of bribe to get their job done.
To give you an example. A manufacturer can sell, low quality transformers to electric board. This is goes against public interests. But at the same the manufacturer can argue he creating jobs by running a company, so he can cheat.
>>If you're the president of a state energy board, you don't need to break any rules to get a higher paying job in industry.
Regular job income is chicken feed for these people compared to the money they make in bribes, commissions etc.
>A manufacturer can sell, low quality transformers to electric board. This is goes against public interests.
You're going to have to give more details than this in order to make that statement. Are they in a competitive market? Is someone picking winners? What effect does this have on prices? Moreover, is he creating jobs? How is that cheating?
Licenses for supplies, manufacturing, export, services etc. Heck nearly everything is controlled by licenses. Which are in turn issued by the government. The Net result is heavy bribes are paid to get licenses. And then bribes are paid to regulators to by pass violations.
You might think lobbying and campaign funds are too much of corruption in US. Come to India, you have to pay bribe for everything and anything.
To give you a specific scenario. Lets say you bid for a contract to build roads. Lets say you tar roads. Firstly this can be won only through if you are licensed contractors(You have to pay bribe to get one). Then tenders are allocated for the road construction, you have to pay commissions to get selected.
Now after heavily bribing your way through all this. The only way you can make profit is by sacrificing quality. Therefore you now use low quality material. If saw you are asked to tar the road 8 inches, you do only 3 inches. You don't tar lanes. The quality of tar you use doesn't last one rainy season.
Regulatory authorities are severely bribed to over look all this.
This is the regular story in India, In nearly ever walk of life. This happens from birth to death. People even bribe for birth and death certificates, voter identification cards, passports. You name it, and there is corruption associated with it.
Not sure how else to remedy your confusion here.
A major complaint that a lot people have is that oh, when you leave your S&P job thats paying 60k a year for an IB job that pays 300k a year, you're a symptom of corruption. But hell, what if your experience working for S&P necessarily means your qualified to do derivatives trading?
If you're getting job offers that are conditional on you making certain regulator decisions, thats bribery. Eventually wanting to get into the business side of things because they pay more isn't the same thing.
Because regulations work only if regulators are honest.
It ignores human nature. People don't rat out their friends. If you're the jerk at the party, you stop getting invited to the right parties.
Try getting a decent mobile data plan in Canada. It will be rapidly apparent to you.
In short, they represent corporate interests while ostensibly being the people's governing body. This is imho, corruption. I don't know how exactly you regulate this away - perhaps mandate a percentage of the regulators specifically be from outside the industry.
Edit: for completion of sentence/thought
I would say give the questions and their underlying assumptions some thought and also time. For me I had to fight of the tendency to just close the question with some answer and be done with it.