The Parliamentary and Health Service Ombudsman (PHSO) is technically not a ‘regulator’ but it sits in the place of a regulator, holding public bodies to account. With just a 3% uphold rate from all complaints submitted in 2017/18 this is a body which ticks all the boxes for ‘regulatory capture’. With a revolving door between the Ombudsman and the bodies under their remit, a lack of transparency and no public accountability the PHSO legitimises poor public services across government and the NHS whilst extending the stress of injustice for members of the public who make a complaint.
Article reblogged from MBN Market Business News
Regulatory Capture – Definition And Meaning
Regulatory capture occurs when a government’s regulatory agency, which was created in the public interest, ends up advancing the political or commercial concerns of the very people, companies or entities it is supposed to be regulating. Regulatory capture, in the world of government monitoring, is like when the gamekeeper turns poacher, or at least, assists the poacher.
Regulatory capture is a form of government failure. Government failure, also known as non-market failure, is imperfection in government performance. Regulatory capture is a form of rent-seeking – trying to get a larger slice of a market’s total wealth without creating any additional wealth for that market.
When regulatory capture exists, the interest of political groups or companies become more important than those of the public, which leads to a net loss to society.
If you are having problems because the wolves keep eating the sheep, perhaps setting up an agency might help protect those sheep. However, you have a problem if the only individuals qualified to become agency members are also wolves.
To define captured agencies refers to the government agencies that suffer regulatory capture.
How pervasive is regulatory capture?
Regulatory capture theory was set out by Prof. Richard Postner, an American jurist and economist, who is a Senior Lecturer at the University of Chicago Law School and also a judge on the US Court of Appeals for the Seventh Circuit in Chicago.
Prof. Postner argued:
“Regulation is not about the public interest at all, but is a process, by which interest groups seek to promote their private interest… Over time, regulatory agencies come to be dominated by the industries regulated.”
While warning that there is always a risk of regulatory agencies being captured by the very firms that they are supposed to be policing, the majority of economists’ views are less extreme than those of Prof. Postner.
Why does regulatory capture occur?
According to public choice theorists, individuals and groups with high-stakes interest in the outcome of a specific policy or regulatory decision will naturally focus their energies and resources in trying to obtain the policy outcomes that best suits them, while the rest of society – members of the public – each with only a minuscule individual stake in the outcome, are likely to ignore it completely.
When regulatory capture occurs, agencies may find themselves chasing their own tails, running in circles, and sometimes even backwards. Riddled with conflicts of interest, they no longer accomplish what they were set out to do – to protect members of the public (consumers).
Regulatory capture occurs when the actions of individuals, companies and interest groups are successful at ‘capturing’ influence with regulatory agency staff or commission members.
The probability of regulatory capture is a risk which all agencies are exposed to because of the very nature of their **environment. This suggests that all regulatory agencies should be shielded from outside influence as much as possible.
** In the pharmaceutical and medical world, for example, the regulatory agencies – such as the FDA in the US, the MHRA in the UK, and the EMA in the European Union – are staffed with experts in their field. This means that they must have worked in medicine and/or the pharmaceutical industry – the very environment they are supposed to be policing. Industry lobbyist know these experts very well – they all come from the same place.
‘Captured agency’ worse than no agency
An alternative, say many critics, is not to create the regulatory agency in the first place, then the risk of regulatory capture is reduced to zero. In most cases, a captured regulatory agency is worse for the overall good of society than no regulation at all – as soon as the industry is in control of the regulatory agency, it has the power of government.
The more transparent agencies are, the less effective are the effects of capture. However, even **transparency and press freedom are often not enough.
** Transparency refers to the extent to which any entity makes all data about it readily available to stakeholders and/or citizens in general.
In a World Bank Policy Research Working Paper – ‘Small is Beautiful, at Least in High-Income Democracies’ – Alexander Hamilton writes that according to recent evidence, even in the world’s wealthiest democracies with high levels of media freedom and transparency, the more complex and extensive regulatory environments are associated with greater levels of corruption, including regulatory capture.
When the employees who are in the industry, its lobby groups, and its regulatory agency are all the same people, the likelihood of regulatory capture existing is enormous. However, if as in the image above, the FDA wants top experts, there is only one place it will find them – within the industry.
In an article deposited in SSRN.com – The Situation: An Introduction to the Situational Character, Critical Realism, Power Economics, and Deep Capture – Jon D. Hanson, Alfred Smart Professor of Law at Harvard University, and David G. Yosifon, Associate Professor of Law at Santa Clara University, write about the possibility that powerful economist interests not only capture legislatures and regulators, but also journalism, universities and popular culture.
In an article published in Deep Capture – ‘Capture Explained‘ – Patrick Byrne writes:
“If Hanson is right, the success of the Law & Economics movement in US law schools is less a function of its theoretical strength than it is a function of the fact that it favours elites, a number of whom have funded conferences, journals, professorships, and even law school buildings, in order to allow a shoddy theory to emerge as though it were the winner in a neutral marketplace of ideas.”
Prof. Milton Friedman discussing government regulations:
In this YAF TV video, Prof. Milton Friedman says: “Government regulation is always undertaken to benefit consumers. It is always undertaken under pressure from the producer – and it ends up having the opposite effect. This is the law of unintended consequences – the law that is intended to benefit consumers will end up benefiting producers.”
If you look at the tribunals outcomes for solicitors and doctors, they make it look as though the profession has isolated incidents and the odd bad apple. Everything is constructed to obscure you from the whole picture and systemic rot.
Absolutely right. They control all the information and therefore control the narrative.
Teresa. I had similar treatment from a GP an NHS Trust and from PHSO. I am still suffering physically and mentally from the effect of “Post Sepsis Syndrome ” caused by a negligent Trust doctor and a negligent G.P.
I now have a lifetime ” New Career ” trying to bring the people involved to account.
I know that there are thousands of people out there who have a similar problem.
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John there is some solace in knowing we have all suffered at the hands of the establishment.
My motivation and ambition now is to bring them all to account and try to prevent others from suffering the same fate.
All NHS Trust G.P.s and other NHS contracted bodies all have for reference in their complaints procedure the final arbiter is the PHSO.
I was taken for a mug by the PHSO ,who said that if I instructed solicitors to act for me they would cease to investigate my complaint .
I took their advice and then suffered the consequences .
Brilliant article. #RegulatoryCapture, exactly what I’ve experienced with the PHSO and complaint handling system in general. Thank you, I’m not mad I’ve been denied truth and justice. The regulatory bodies have indeed caused me more prolonged mental torture than my husband’s preventable brain damage. One has to question that last statement and wonder why people, who have been through the emotionally draining complaints procedure, can never find recovery.
Thanks for this article. I have copied and sent to all the organisations I am currently dealing with in complaint handling. There are 8 of them plus the medical mafia team at Medical Defence Union Ltd.
Regulatroy Capture – wonderful way of summing up – complain and get stuck in with regulatory capture, certainly worse than no regulator as far as I am concerned. However, perhaps the pr works well as it sounds believable, until you are invited to complain or become involved in any way. Difficult to know if the believable/credible makes matters better or worse. For example medics might believe they are regulated, and therefore might carry out thier duties with more care, or if they know the difference, are condifident with abuse, cover up and corruption, ensuring their own safety and that of the system.
Brilliant. You need a definition for a concept before you can pin it down and refer to it in any shared and economical way. ‘Regulatory capture’ gives us that.
It is interesting that evidence of widespread corruption of our regulatory system continually emerges from different sources. In fact anyone who takes the time to scratch the surface of these organisations soon realises that they work against the public to protect the system.
Reblogged this on | truthaholics and commented:
‘Regulatory capture’ short-circuits transparency and accountability and is perhaps already better known in the UK as foxes running the henhouse, primarily by commodifying sovereign vulnerable citizens ie, children, elderly and unwell, for corporate profit.
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Yup, this is exactly what’s going on, the system designed to protect the system and the public can get stuffed. What is justice in the UK? Clearly not what it says on the tin. PHSO are one in a long line of useless, corrupt and biased bodies that exist to cover-up and paint a false picture. A bit pointless when the people the picture is being presented to are the same people they have shafted isn’t it.
Morecambe Bay Hospitals maternity services again….
Younger daughter’s almost lifelong friend – met as reception class 4 year olds.
‘ Small for dates’. We’ll have to induce Baby,…..( Baby could be *at risk* being the usual spiel)
Induction failed – not unusual, baby not due for some time.
Result : Emergency caesarean birth , last week, of baby weighing 7lb 3 ozs….
Fortunately, despite longer post caesarean stay no infection so far…/
Stressed out new parents, one recovering from major surgery, don’t need any tortuous Ombudsman process –
Virgin train delay model infinitely preferable…
NHS tried the same on me – long time ago, obviously ‘ Very tiny baby, no more than 4lbs, will need to go straight into special care..’ ( Guilt, fear, no time left in which to try eating for ten !) No caesarean, fortunately but induced the next day, she was 7lb 5 ozs.
I will be very surprised indeed if RB responds to my analysis of the ease with which a patient’s entire history can be falsified.
Didn’t expect any response. RB & Co also effectively removed advocacy support, via the silent treatment.
On Sat, May 25, 2019 at 5:20 PM phsothetruestory wrote:
> phsothefacts.com posted: “The Parliamentary and Health Service > Ombudsman (PHSO) is technically not a ‘regulator’ but it sits in the place > of a regulator, holding public bodies to account. With just a 3% uphold > rate from all complaints submitted in 2017/18 this is a body which tick” >
Excellent account of regulation etc. Would I Lie to You? sounda like SHOW TITLE or a Parlamentarian’s answer…………..Maybe training for a new role?