Towards a legal theory of capture

• Published date: 01 November 2018
• DOI: http://doi.org/10.1111/eulj.12217
• Date: 01 November 2018

ORIGINAL MANUSCRIPT

Towards a legal theory of capture

Caroline Devaux*

Abstract

To assert their role in global governance, international organisations, including the EU, have

progressively involved economic actors in their activities, particularly in the course of law‐making pro-

cesses. Their integration, even if necessary, raises the risk of excessive influence that they may exert

on law‐makers. The paper builds on the theory of regulation that coined the concept of ‘capture’and

proposes to analyse the conditions and effects of such phenomenon within three selected interna-

tional organisations that are particularly prone to the influence of economic actors: the United

Nations (UN), the International Institute for the Unification of Private Law (UNIDROIT) and the Inter-

national Centre for Settlement of Investment Disputes (ICSID). In light of their practice, the paper sug-

gests key features that an EU legal framework could take to promote the participation of economic

actors in its law‐making process while preventing the occurrence of capture.

1|INTRODUCTION

Economic globalisation redistributed the cards of governance on the global stage. International organisations had to

face new competitors in the conduct of their normative functions. Enrolling in a permanent quest for legitimacy, they

chose to focus on their representativeness and their effectiveness to secure their authority in the international

arena.

1

These two imperatives of efficiency and representativity require relying heavily on stakeholders.

Stakeholders, among them economic actors, are indeed essential to ensure that international organisations receive

enough information and support to design efficient and democratic norms. They have therefore been increasingly

integrated into law‐making processes. In a previous study published in this Journal, we demonstrated that their

integration may be justified, and should even be promoted, on the basis of three factors: their output, input and

throughput legitimacy.

2

*

Academic assistant, College of Europe, PhD (Sciences Po Paris), Mjur (Oxon). I thank Alberto Alemanno, Francis Snyder, Ching ‐Fu Lin

and all the participants at the Conference ‘New Directions in EU and Global Risk Regulation’organised at HEC, Paris (19–20 June

2015) for their precious comments on an earlier draft of this paper.

1

T.C. Halliday and B.G. Carruthers observe that: ‘In the modern state, however, representative authority is not sufficient for compe-

tent lawmaking. The complexity of legal regulation requires expertise. Indeed, the legitimacy of the product among its practitioners

partly depends on the technical authority manifest in it.’T.C. Halliday and B.G. Carruthers, Bankrupt: Global Lawmaking and Systemic

Financial Crisis (Stanford University Press, 2009) at 132. See also P. Jan, ‘Réforme de l'ONU: choisir entre représentativité et efficacité’

(2005) 121 Revue du droit public et de la science politique en France et à l'étranger, 869–874 and, more generally, E. Lagrange and J‐M.

Sorel, Traité de droit des organisations internationales (LGDJ, 2013).

2

C. Devaux, ‘The Role of Experts in the Elaboration of the Cape Town Convention: Between Authority and Legitimacy’(2013) 19

European Law Journal, 843–863, where the focus was on the way the aviation sector participated in the elaboration of the Cape Town

Convention under the auspices of UNIDROIT.

DOI: 10.1111/eulj.12217

458 © 2018 John Wiley & Sons Ltd. Eur Law J. 2018;24:458–473.wileyonlinelibrary.com/journal/eulj

The pressure to maintain position as major actors of global governance means that the relationship between

international organisations and economic actors may sometimes slip out of control and amount to a dependency

relationship, where international organisations need the satisfaction of economic actors to secure their authority,

which may imply providing them with the legal instruments they need to increase their economic activities. In such

a case, economic actors integrated into law‐making processes will be able to exert such influence that law‐makers are

left without autonomy to conduct their normative functions.

A critical distinction must thus be drawn between a normative influence exerted by economic actors, which

constitutes the hallmark of a democratic

3

and reflexive

4

law‐making process, and by contrast a situation of capture

where law‐makers lose their margin of action and become controlled by economic actors. Capture may therefore

be seen as the flipside of the integration of economic actors into law‐making processes. This is not a matter of

degree of integration, i.e. whether the presence of economic actors is limited or not. It is rather a question of control

and dependency instilled between law‐makers and economic actors. In this light, preventing capture is essential to

ensure that the normative functions of international organisations are not diverted from their aim, i.e. the promotion

of the general interest.

Legal scholars are particularly interested in understanding the concept of capture and how it can be avoided.

Introducing such a notion, the paper also aims to reconsider its characteristics. It demonstrates that the model of

‘regulatory capture’is too schematic, and sketches a more complex picture of the phenomenon, in particular regard-

ing its causes, means and effects. Our model of capture aims to help the EU design a framework for controlling the

participation of economic actors in its decision‐making process while promoting their integration. Such a framework

appears all the more necessary as the EU recently decided to reinforce the participation of private actors by setting

up a structured dialogue with them.

5

The paper is divided into five sections. Section II introduces the phenomenon of capture and suggests that the

EU could learn from the practice of three international organisations that have long decided to integrate economic

actors into their law‐making processes: the United Nations (UN), the International Institute for the Unification of

Private Law (UNIDROIT) and the International Centre for Settlement of Investment Disputes (ICSID). Section III

attempts to systematise the occurrence of capture by identifying the normative context conducive to a capture, its

legal entry points and the means used by economic actors to set up a capture. In Section IV, we identify the effects

of capture, arguing that capture may occur to various degrees in contrast to what the theories of regulation posit. In

light of these findings, the final section underlines key aspects that an EU instrument should have to channel the

participation of economic actors in its law‐making process and prevent the occurrence of capture.

2|INTERNATIONAL ORGANISATIONS AS ‘EXPERIMENTAL

LABORATORIES’FOR THE EU

The concept of capture is nothing new. The idea can be traced back to the first economic regulations in the United

States at the end of the 19th century,

6

but it was coined in the aftermath of World War II by Samuel Huntington to

highlight the relations US federal agencies had with specific interest groups.

7

Marver Bernstein then extended the

study to other US agencies, further calling into question the idea of a regulation naturally orientated towards the

3

J. Habermas reserves a central role to the deliberation as the only way to guarantee a democratic process. J. Habermas, Théorie de

l'agir communicationnel: rationnalité de l'agir et rationalisation de la société (Fayard, 1987).

4

See I. Ayres and J. Braithwaite, Responsive Regulation (Oxford University Press, 1992).

5

Article 11 TEU. For further developments, see below, p. 13 [12 s].

6

Even if the idea of capture is already present in the works of Montesquieu, James Madison and, later, of Karl Marx.

7

The concept of capture emerged in the field of public administration. See Samuel P. Huntington on the excessive influence of the

railroad industry on the US federal agency in charge of the regulation on commercial transportation. S.P. Huntington, ‘The Marasmus

of the ICC: The Commission, the Railroads, and the Public Interest’(1952) 61 The Yale Law Journal, 467–509.

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