Accounting

The theory states that regulations are manipulated to fit the requirements of those affected by them. The theory suggests that over a given period of time regulations serve the interests of the industries concerned. This theory was designed by political scientists (J. Hertog. General Theories of Regulation, 1999, pg 235).

Advantages of capture theory
The theory clearly explains the main intentions of designing regulations. The individuals to be affected by the regulations are directly involved in the formulation of these regulations. Therefore, there is adequate representation of the politicians as well as the interest groups since the regulations are drawn for their needs (Stigler, J. G. The Theory of economic regulation, n.d. pg 3).

Limitations of capture theory
The theory does not provide a significant difference from the public interest theory. The theory suggests that the public interest is the beginning of regulations. This is a similar suggestion postulated by the public interest theory (J. Hertog, General Theories of Regulation, 1999, pg.236).

Capture theory does not explain clearly how an industry can subject an agency to its interests but cannot resist its formation. Regulations seem to favor the consumers rather than the industry. The industries under regulations are required to offer services beyond their capacity. Excess regulations reduce the profits that industries make. For example, regulations on environment, labor, and many others make companies to reduce profitability (J. Hertog. General Theories of Regulation.1999, pg 236).

Similarity of economic interest theory (private interest theory) with capture theory
The two theories suggest that politicians aim at maximizing their utility. The politicians aim at maintaining political power in their efforts to design regulations for the industries. They seek money, votes and resources from the groups that are favored by the regulations (M. J. R. Gaffikin, Regulation as an Accounting Theory, 2009, para 25).

The theories suggest that regulations are driven by forces of supply and demand. The government represents the supply side while the interest groups represent the demand side of the argument. The groups require the regulations for their survival in the market while the government is the only one which can provide such regulations (B. L. Benson, The economic theory of regulation as an explanation of policies toward bank merges and holding company acquisitions, 1983, pg 839).

Differences between capture theory economic interest theory (private interest theory) and capture theory
The capture theory suggests that regulations are designed to fit the demands of those affected by them. On the other hand, the economic theory suggests that regulations are generated from the forces of supply and demand. The government is assumed to be the supplier while the interest groups are assumed to be on the demand side of the argument (B. L. Benson, The economic theory of regulation as an explanation of policies toward bank merges and holding company acquisitions, 1983, pg 849).


The government should consider the interest of the individuals and organizations to be affected by the regulations. These groups should be involved in the decision making concerning the formulation of the regulations. Regulations are designed to benefit those who are affected by them. The benefits may be negative or positive.  The politicians as well as the interest groups benefit from the regulations. The theory is more inclusive since it ensures that all the stakeholders are involved in the designing of the regulations.