Final answer:
Regulatory agencies have close relationships with the industries they oversee due to industry participation in the regulation-setting process, leading to concerns of regulatory capture. This interaction is necessary to manage the complexities of modern industries but can sometimes undermine the goal of protecting consumers and the public interest.
Step-by-step explanation:
Regulatory agencies and the industries they regulate often have close relationships due to the interactive nature of the regulatory process. These agencies, such as the Occupational Safety and Health Administration (OSHA), the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and others, are tasked with overseeing various aspects of industry operation to ensure safety, quality, and fairness. Industries often have significant input in the regulation process, sometimes resulting in regulatory capture, where regulated industries play a large role in setting the regulations they follow. For example, during the regulation of the airline industry, the industry itself suggested appointees to the regulatory board and sent lobbyists to influence decisions, which can lead to regulations that poorly represent consumers. Furthermore, agencies like the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) oversee regulations to protect citizens in the digital era.
Deregulation can have adverse effects, such as increased competition leading to business failures and job losses. Yet, the debate continues whether regulation or deregulation better serves the public interest.