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Why Media Regulation is so Tempting

Jan 2008
Working Paper
07-027
By  Bruce Owen
Why is regulatory reform and deregulation so difficult to achieve? Using the example of proposed federal regulation of (apparently non-existent) wholesale-level bundling of video networks, I explore the non-economic motivations for economic regulation. It appears that the political system sometimes prefers to substitute itself for market forces even when there is no evidence of market failure or evidence that consumer welfare will be increased. This may happen in part because political actors face incentives and opportunities created by activist groups of “true believers,” resistant to rational argument and dissonant information.