REGULATORY CAPTURE AND THE ROLE OF ACADEMICS IN PUBLIC POLICYMAKING: LESSONS FROM CANADA'S ENVIRONMENTAL REGULATORY REVIEW PROCESS.

• Author: MacLean, Jason

Sustainability in Canada, as elsewhere, will likely only arise if people are prepared to choose fundamentally different goals for their society, including a fundamentally different economic model in which maintenance of ecological integrity is a precondition to all development. Environmental law is a means to an end, not an end in itself. (1)

What we need now are more concrete proposals for reform rather than suggestions that someone else should do something. I believe that the responsibility for making these proposals is very largely that of academics. (2)

1. INTRODUCTION: REGULATORY CAPTURE'S FIFTEEN MINUTES OF FAME

   1. CLIMATE POLICY, REGULATORY CAPTURE, AND ACADEMIC EXPERTISE

      There is no greater obstacle to achieving Canada's greenhouse gas (GHG) emissions reduction targets under the UN Paris Agreement and contributing to the accomplishment of the UN's Sustainable Development Goals (SDGs) than the phenomenon of regulatory capture. Regulatory capture is at once the process and effect of regulated entities or entire industries systematically redirecting regulation away from the public interest and toward the private, special interests of regulated parties themselves. (3) Although it has been characterized as the root problem of Canadian environmental law, (4) not only does regulatory capture continue to receive far less scholarly attention than it deserves, (5) it is also rarely made the focus of environmental advocacy in Canada. (6) Not unlike climate change itself, (7) regulatory capture can be difficult to discern directly, (8) although as our analytic methods evolve and the evidence of each continues to accumulate, detection is rapidly improving. And not unlike climate change, it is not enough to merely identify regulatory capture and its effects, analytically challenging and complex a task as that is. Both call out for not only critiques of "business as usual"--an unusually apt term in this context (9)--but also constructive public policy alternatives to the status quo. Both, moreover, call out for broad-based, countervailing democratic movements in support of such policy alternatives. Indeed, these issues intersect in the increasing understanding that the nature of the challenge of mitigating climate change and catalyzing a just transition to sustainability is neither primarily scientific nor technical, but social and political. (10)

      The aim of this article is to better understand how regulatory capture pre-empts effective government action on climate change and sustainability, and how such capture can be countered. Specifically, this paper argues that academics are at once ideally positioned and ethically obligated to assist in countering capture by generating socially and politically transformative regulatory alternatives capable of attracting broad popular appeal. (11) Broad social and political movements do not just happen all of a sudden or on their own. Their dynamics are complex, so much so that they tend to elude the movements' participants themselves. This creates a gap between the equally critical ingredients of movement participation and the understanding of movements. How do we expose the entrenched economic interests reproducing our reliance on fossil fuels while building a broad coalition in support of transitioning to renewable energy, all the while ensuring that this transition is socially and politically just? These are the questions that must be answered to counter the regulatory capture of climate change and sustainability law and policy, and academics are uniquely well positioned to propose answers and alternatives for broader, democratic debate. In order to demonstrate this argument, this article proposes an academic law reform model capable of generating viable climate and sustainability policy proposals having the potential to attract broad popular appeal.

   2. REGULATORY CAPTURE APPEARS ON THE DAILY SHOW

      By way of introduction to regulatory captures little-understood processes and the peculiar challenges it poses to public interest policymaking, it is useful to begin by momentarily revisiting regulatory capture's brief and unlikely moment of popular attention. In February 2014 US political scientists Martin Gilens and Benjamin Page appeared on Comedy Central's The Daily Show, (12) then hosted by popular political comedian Jon Stewart, to discuss their recently published paper, "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens". (13) It is not every day, of course, that academics of any stripe appear on television, much less on a show as popular as The Daily Show. But Gilens and Page's article raised questions of fundamental importance: Who governs? Who really rules? Are citizens sovereign, or largely powerless? Gilens and Page's findings--based on a longitudinal and multivariate analysis of public policy preferences cross-referenced against their actual legislative outcomes--reveal that economic elites and their lobbyists have significantly shaped US government policy, while broader public interest groups and average citizens have enjoyed "little or no independent influence." (14) Putting an even finer point on their findings, they concluded that in the United States the familiar democratic notion of majority rule does not hold in respect of the determination of public policy. (15) In a wry turn of phrase, Gilens and Page conceded "this does not mean that ordinary citizens always lose out; they fairly often get the policies they favor, but only because those policies happen also to be preferred by the economically elite citizens who wield the actual influence." (16) Perhaps it was these professors' penchant for sardonic political interpretation that attracted the attention of The Daily Show's producers. Or perhaps it was the professors' stark conclusion that "if policymaking is dominated by powerful business organizations and a small number of affluent Americans" as their findings strongly suggest, then America's claim to being a democracy is in serious question. (17)

      The findings of Gilens and Page reflect--and stem from--the phenomenon of regulatory capture. This form of capture is characterized by US law scholar Lawrence Lessig as systemic corruption, which he identifies not as the most important issue facing democracy, but rather the first. Take any public policy issue, Lessig argues, be it climate change or excessive regulation, financial reform or healthcare, a complex and invasive tax system or growing income inequality, debt, or education--whatever the policy issue may be, regulatory capture is likely at play. That is what makes it the first, logically prior issue. Regulatory capture is the issue that must be solved before we can address any other more specific public policy issue and enact sensible reform. (18)

      And thus does the surprising appearance of Gilens and Page on The Daily Show gesture simultaneously towards both the solution to the scourge of regulatory capture as well as that solution's primary obstacle: the inherent difficulty of establishing a compelling countervailing democratic movement aimed at redirecting regulation back to its proper public interest.

      Both the importance and the difficulty of founding such a movement is underscored in a recent paper by the noted political economist Thomas Piketty. (19) By analyzing postelectoral surveys from France, Britain, and the United States covering the period of 1948-2017, Piketty observed a long-run evolution in the structure of political cleavages. Specifically, Piketty shows that while the vote in the 1950s-1960s for "left wing" (i.e. socialist-labour-democratic) parties was strongly associated with lower-education and lower-income voters, left wing electoral support has gradually become associated with higher-education voters. The result in all three countries is the replacement of a class-based party system with what Piketty describes as a multiple-elite party system: higher-education elites vote for the left while high-income and high-wealth elites still vote for the right. Meanwhile, all three countries witnessed a significant increase in voter abstention between the 1950s-1960s and the 2000s-2010s. Not unsurprisingly, this abstention arose largely within lower-education and lower-income groups. A natural interpretation, Piketty argues, is that lower-education and lower-income voters do not feel well represented in a "multiple-elite" party system. (20) Overall, Piketty argues, this shifting structure of political cleavages helps explain both "rising inequality and the lack of democratic response to it". (21)

      But how to explain this structural evolution itself? Piketty's account points both to the limits of universal suffrage and the processes of regulatory capture. Elite capture of politics, according to Piketty, is hardly new. One of the oldest political party divisions in the world, the Conservatives versus the Whigs in eighteenth-century Britain, was largely a conflict of and among elites (i.e. the landed elite versus the urban-commercial elite). (22) Throughout this period, only the approximate top one percent of the population was eligible to vote, so electoral politics was naturally predominated by elite concerns and conflicts. (23) It would be naive, however, to suppose that the advent of universal suffrage occasioned a new and permanent political balance. Rather, Piketty argues that economic elites influence and effectively control electoral politics through their disproportionate access to political financing, corporate, mainstream mass media, and political decision-makers themselves. (24) And here Piketty arrives at the same conclusion reached by Lessig and Gilens and Page: Overcoming the difficulty of uniting low-education and low-income voters who otherwise have little in common in terms of origins and values requires the formation of an attractive and viable political platform based on broad socioeconomic equality. (25) And yet Piketty's analysis...