The political economy of financial regulation.

Summary This thesis contributes to the burgeoning literature on controller capture by deepening our understanding of the phenomena of cognitive and informational capture from multiple perspectives. The manuscript is partitioned into three chapters. In the first chapter, I develop a theoretical model to study the difficult trade-off a political leader faces when delegating the regulation of the financial system. The choice made by the political leader depends on his political environment and the characteristics of the regulated domain. In a second chapter, I define indicators of regulator capture and apply them to a database constructed by collecting the governance practices and procedures of 42 independent agencies. This work aims at evaluating the predictions of the theoretical model presented in chapter 1. The third chapter aims to explain the disparities observed between independent agencies. Competing hypotheses are tested: political explanations versus cultural and historical explanations.