<P> There is substantial academic literature suggesting that smaller government units are easier for small, concentrated industries to capture than large ones . For example, a group of states or provinces with a large timber industry might have their legislature and / or their delegation to the national legislature captured by lumber companies . These states or provinces then becomes the voice of the industry, even to the point of blocking national policies that would be preferred by the majority across the whole federation . Moore and Giovinazzo (2012) call this "distortion gap". </P> <P> The opposite scenario is possible with very large industries, however . Very large and powerful industries (e.g. energy, banking, weapon system construction) can capture national governments, and then use that power to block policies at the federal, state or provincial level that the voters may want, although even local interests can thwart national priorities . </P> <P> The idea of regulatory capture has an obvious economic basis, in that vested interests in an industry have the greatest financial stake in regulatory activity and are more likely to be motivated to influence the regulatory body than dispersed individual consumers, each of whom has little particular incentive to try to influence regulators . When regulators form expert bodies to examine policy, this invariably features current or former industry members, or at the very least, individuals with contacts in the industry . Capture is also facilitated in situations where consumers or taxpayers have a poor understanding of underlying issues and businesses enjoy a knowledge advantage . </P> <P> Some economists, such as Jon Hanson and his co-authors, argue that the phenomenon extends beyond just political agencies and organizations . Businesses have an incentive to control anything that has power over them, including institutions from the media, academia and popular culture, thus they will try to capture them as well . This phenomenon is called "deep capture". </P>

Which of the following is an example of regulatory capture