In new research, Nicholas Short, Sophie Hill, and Jacob Brown examine “ideological capture”: regulatory capture that works not through lobbying but through experts defining what goals and values regulators may consider. Surveying the public alongside antitrust lawyers, they find the consumer welfare standard marginalizes important public concerns, like the risk of increased layoffs or more lobbying power.
Regulatory capture does not always begin with lobbying. Sometimes, it begins earlier, when experts decide what facts regulators are allowed to consider and what goals regulators are supposed to achieve. That less conspicuous form of influence can redirect policy for decades, even without any company attempting to persuade an official to align policy with the company’s interests.
We call this ideological capture. It occurs when regulators adopt a standard grounded in an expert conception of the public interest that consistently sidelines values the public considers important. The standard need not be a cynical front, and its proponents need not be corrupt. An expert community can sincerely build a framework that advantages powerful interests while making other legitimate concerns difficult or impossible for governments to evaluate.
Capture can happen upstream of lobbying
Most accounts of regulatory capture focus on material transactions: a firm lobbies for a permit, a waiver, or, in the realm of antitrust, permission to merge with another large company. Yet, agencies also make policy choices about the rules by which they will decide such requests, and these rules can have more influence than the idiosyncratic outcome of any individual request. If a framework excludes a specific type of harm from consideration at the outset, then regulators can faithfully apply the rules but still produce outcomes at odds with public values, even in the absence of lobbying.
To be clear, most expert-public disagreements do not rise to the level of ideological capture. In a democracy, the public usually benefits when those with expertise guide regulation. Our definition requires that regulators create a standard that reflects an ideologically motivated expert view of the public interest. But it also requires that the chosen standard repeatedly marginalizes important public goals—an empirical question. Many instances of ideological capture arise from sounder regulatory design processes than others. Expert influence in a democracy is less troubling when its claims are well validated and the public has a meaningful opportunity to contest the value choices involved. It is more troubling when uncertain assumptions are treated as science and major policy changes bypass ordinary democratic processes.
The consumer welfare standard illustrates the problem
Antitrust policy is an appropriate setting to test the main empirical implication of this theory that the public and experts systematically diverge in how they define policy goals. For roughly four decades, the consumer welfare standard has placed prices at the center of merger review. That focus can illuminate real harms, especially if the goal of merger policy is to maximize consumption. But in common practice it has given little or no weight to other consequences that the public may care about: layoffs, the political influence of very large firms, threats to local communities, or the risk that a company becomes too big to fail. Regulators also adopted this standard to align policy with the ideology of scholars associated with the “law and economics” movement. Beginning in the 1960s, the law and economics movement urged courts and agencies to apply microeconomic theory to legal doctrine. In antitrust, its scholars treated higher output and lower consumer prices as the principal measures of welfare, generally bracketing harms without ready price equivalents, such as layoffs, political influence, or damage to local communities. Courts and antitrust agencies adopted the consumer welfare standard in part to align antitrust policy with that approach. The goal of the standard is therefore to minimize consumer prices. But the standard may also marginalize important public concerns in pursuit of that goal, and if it derives its support not from the public but from antitrust lawyers and economists, the standard could evidence ideological capture.
This particular example of ideological capture is normatively troubling. The standard did not arrive through a new antitrust statute. In 1979, the Supreme Court declared that Congress had designed the Sherman Act as a consumer welfare prescription, citing law and economics scholars like Robert Bork. The Reagan administration then installed agency leaders sympathetic to law and economics (subject only to Senate confirmation), and the antitrust agencies rewrote their merger guidelines in the early 1980s. Congress did not openly choose among competing goals, nor did the presidential candidates in the 1980 election present voters with clear alternatives on antitrust policy. A change that sharply reduced merger challenges took hold largely through courts, appointments, and agency guidance.
Prices matter, but not that much
To learn whether the consumer welfare standard marginalizes important public values, Sophie Hill, Jacob Brown, and I surveyed 2,092 adults living in the United States and 103 antitrust lawyers about antitrust issues. We asked them to indicate their support for a government challenge to a series of hypothetical mergers. The public sample used demographic and partisan quotas and post-stratification weights to make it nationally representative. The lawyer sample was a smaller convenience sample. Our strongest evidence comes from an experiment in which respondents judged four hypothetical mergers with randomly varied effects (both positive and negative) on prices, product quality, employment, lobbying, and bailout risk. In this experiment, each factor’s effect on public support for a merger challenge is like an importance score, revealing how the public weighs competing concerns.
The results revealed that low prices influenced public thinking but were not the most important concern. A merger promising a striking 20 percent price cut—far greater than the average merger can promise—reduced support for a government challenge by 8 percentage points. But a merger that increased lobbying raised support for a challenge by eight points. A 20 percent workforce reduction raised support for a challenge by 26 points, and worse product quality by 27 points. Even an implausibly large price cut, on balance, could not compensate for many of the risks or anticipated harms that sit outside, or at the margins of, the consumer welfare standard.
The policy divide is professional, not partisan
Public support for various policies often divides along partisan lines, but partisan divisions on antitrust policy are much weaker than often assumed. Republicans and Democrats assigned statistically similar importance weights to the merger consequences. And when asked directly about replacing the consumer welfare standard, 81 percent of Democrats, 81 percent of independents, and 75 percent of Republicans preferred an alternative that gives equal weight to consumers, workers, small businesses, and local communities. Respondents also wanted to replace the standard even though they tended to believe that mergers can provide some benefits, such as promoting innovation.
But an enormous gap separates antitrust lawyers from everyone else. In the aggregate, about 79 percent of the public but only 37 percent of antitrust lawyers favored replacing the consumer welfare standard. In models controlling for demographics and party, the association between being an antitrust lawyer and support for the status quo was more than four times larger than the effect of partisan identification.
Furthermore, the expert-public gap was not rooted in differing beliefs about the need for business regulation: antitrust lawyers were no less likely than the public to say regulation is necessary to protect the public interest. The divide instead tracked beliefs that sit closer to law and economics ideology. Antitrust lawyers were about 18 points less likely to say large corporations have too much economic power or that the government is run by a few big interests. They were also markedly less likely to perceive mergers as increasing political influence, infringing liberties, or creating firms that are too big to fail.
Our findings do not show that public opinion supplies the “correct” legal framework or that antitrust lawyers are motivated by a desire to marginalize public goals. Their convictions may arise by virtue of their legal education or their experience working in a domain where the consumer welfare standard has long been the status quo. The evidence supports a narrower claim: the consumer welfare standard elevates a set of goals favored by the antitrust community while excluding values and concerns that strongly influence public judgments. In other words, antitrust experts define the “public interest” in terms that conflict with the public’s conception of its own interest. Taken together, the expert-public gap and the fact that bureaucrats adopted the consumer welfare standard with little political contestation are consistent with ideological capture.
Experts should not unilaterally define the public interest
The answer is not to replace expertise with polling. Regulators need economists, lawyers, and other specialists to articulate goals and create workable rules. But experts should not decide, alone, which goals society should value. That is a political choice, even when it is expressed through a technical model.
The findings of our research suggest that antitrust regulation could carve out more room for Congressional debate and public input. Greater transparency, including the disclosure of a merger’s projected impact on a wider range of concerns, including tax revenue and employment, would also help inform the public, allow for empirical testing of purported benefits, and encourage accountability.
Ideological capture is easy to miss because the people exercising influence may believe they are defending the public interest. That is precisely why the concept matters. Power operates not only through pressure on government decisions, but through the ideas that define what a legitimate decision can be. Before asking whether a regulator was improperly influenced in a particular merger, we should ask a more basic question: who decided what the regulator was allowed to consider?
Our research also provides a tentative answer to a question surrounding public debates about antitrust reform. Some advocates of reform argue that antitrust regulation should concern itself with effects other than consumer welfare, like wages, worker protections, inequality, and political power. A prominent opponent, Herbert Hovenkamp, contends that the argument for reform rests on the “as yet unverified assumption that people have a set of concerns about large firm size that are not expressed in their market behavior” and notes the lack of “opinion polls indicating that people who understand the consequences would prefer a world of small but higher priced firms.”
The poll we deployed is the first to squarely address this question. The results suggest the public is willing to trade off the kinds of price reductions that large mergers typically generate to avoid job loss, reductions in product quality, or more influence in government.
Authors’ Disclosures: This essay summarizes joint research with Sophie Hill and Jacob Brown. The research was supported by advertising credits from Meta and a grant from Harvard University’s Institute for Quantitative Social Science. The authors report no conflicts of interest. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
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