Time for a new (?) theory of regulation

What's the basic story of economic regulation? Econ 101 courses repeat the benevolent dictator theory of regulation: There is a "market failure," natural monopoly, externality, or asymmetric information. Benevolent regulators craft optimal restrictions to restore market order. In political life "consumer protection" is often cited, though it doesn't fit that economic structure. Then "Chicago school" scholars such as George Stigler looked at how regulations actually operated. They found "regulato...