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LIT-1340: Regulatory independence may limit electoral holdup but entrench capture

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StatusActive — read 2026-10-21 (NOTE-1053) in full (main text; the online appendices not read), from the publisher's open-access PDF (CC BY 4.0); worth reading for a laboratory measurement (THEORY-856) that the commitment which relieves electoral holdup also locks in the interests of whoever designs it, raising prices further when policymakers are aligned with the operator ("capture entrenchment"), and for the authors' general conclusion that independence helps consumers only when its designers serve them (THEORY-858, Proposed). Read it knowing that capture is assigned as a treatment, not produced, that "independence" is a price fixed by the first policymaker, that groups have three voters and the capture cells 18 groups, and that some effects weaken when the 45.8% of groups with dominated period-1 investment are excluded.
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Tagssociety-and-governance, social-science
Cited as “paper” byNOTE-1053 — Schram and Ule — Regulatory independence may limit electoral holdup but entrench capture
Cited as “source” byTHEORY-856 — In one laboratory study of a nine-period game between an infrastructure operator, two elected policymakers and three voters (59 groups), letting the first elected policymaker fix the price for all periods moved prices toward the efficient level when policymakers' payoffs were set equal to consumers', and moved them further above it when their payoffs were set equal to the operator's; under period-by-period regulation voters' pressure lowered the operator-aligned policymakers' prices without removing the gap, THEORY-858 — Insulating a regulator from future political revision fixes in place the interests of whoever designs the insulated regime: it relieves the underinvestment that electoral pressure on prices causes when the designers serve consumers, and entrenches capture, removing the electoral pressure that would correct it, when they serve the regulated industry

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Schram, A. & Ule, A. (2024). Regulatory independence may limit electoral holdup but entrench capture. Public Choice 198(3–4): 403–425. doi:10.1007/s11127-023-01136-y.

Read in full on 2026-10-21 (NOTE-1053), from the open-access article. Its capture is an alignment of policymakers’ payoffs, not influence over evidence or criteria, so it bears on the last clause of CLAIM-404 (an independent procedure need not be independent) more than on the claim’s two routes.

Why this is here

A25: “independence from one source of authority does not imply independence from every other source.” Bears on CLAIM-404, whose two routes of independence (informational and evaluative, R7) it complicates.

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