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- Scope of Delegation to Bureaucracies in the United States
- Causes and Effects of Delegation
Delegation occurs in politics whenever one actor or body grants authority to another to act on behalf of or to carry out a function for the first in a political process. In such general terms, delegation is ubiquitous and a defining feature of politics beyond direct individual actions. Voters delegate to elected officials in representative government; governments delegate to ambassadors in foreign affairs; legislatures delegate to committees the authority to study policy issues and report bills and to bureaucracies the authority to make policy.
Because of the breadth of the topic, this research paper focuses specifically on delegation from legislatures to bureaucracies in administrative and bureaucratic governments. Delegation has become inherent in this mode of governance as the reach of public policy has expanded beyond what elected legislatures can possibly handle. Such delegation presents particularly interesting institutional and political problems in the United States due to separation of powers, and thus, this research paper focuses even more specifically on the rationale for and determinants of delegation in this case. Because of space limitations, this research paper does not address whether agency use of delegated authority is responsive to the policy goals of external political actors (Congress, the president, courts, interest groups) or the channels by which this responsiveness is effected.
Scope of Delegation to Bureaucracies in the United States
Delegation to bureaucracy presents important questions of political and democratic legitimacy because it often imparts to the bureaucracy some power to shape the law. In practice, delegation involves the bureaucracy in making law, beyond the nonlegislative functions of executing laws passed by Congress. Yet Article 1 of the Constitution explicitly allocates the power to make law only to Congress. Moreover, delegation of lawmaking power implies that bureaucracies blend the formal powers (legislative, executive, and judicial) that the Constitution separates. The Supreme Court held such delegation, in its most expansive form, unconstitutional in its 1935 decision in Schechter Poultry Corporation v. United States, which invalidated the administrative nerve center of Franklin Delano Roosevelt’s New Deal. Since then, the typical formulation to legitimize Congress’s delegation of its Article I power to make law is that Congress articulates at least a “general standard” to guide agency policy making, and agencies merely “fill in the details.” However, no statute has been invalidated by the Supreme Court on delegation grounds since 1935; even extremely broad guidelines stipulating only that agencies regulate “in the public interest” have been upheld. Thus, it is debatable whether Congress faces any meaningful legal restrictions on its delegation to agencies.
James M. Landis, one of the foremost legal scholars of regulation and architect of the Securities and Exchange Commission, disputed such critiques of delegation on the grounds that, first, each constitutional branch of government possessed ample checks over administrative agencies, and second, delegation to administrative boards was necessary to reconcile democratic government with the formidably complex policy problems created by economic developments. This defense has retained intellectual currency since Landis first offered it.
Causes and Effects of Delegation
The history of delegation to bureaucracy in the United States is a history of Congress working hard to give away a measure of formal power allocated to it in the Constitution. Since Congress often keeps close watch on its constitutional prerogatives, this is a choice that is interesting to try to explain. Scholars have offered a wide variety of theories to do so. Broadly speaking, the contemporary political science literature avers that delegation of policy-making authority to bureaucracies allows a legislature to achieve policy ends that it could not achieve through legislation itself.
First, Congress may delegate simply because of the opportunity cost of its time spent on any one issue. For example, in policy pertaining to the electromagnetic spectrum (EMS), Congress could set technological standards and allocate spectrum rights to various classes of users itself. Instead it has charged the Federal Communications Commission (FCC) to do so “in the public interest.” Congress can therefore reserve its attention for broader and more nationally significant policy choices, leaving the FCC with the relatively more arcane choices over EMS use.
This rationale suggests that delegation presents Congress with a “principal-agent problem.” The bureaucratic agent may pursue different goals with its authority from those Congress (the “principal”) would pursue. Several scholars have noted that legislative and executive policy goals are more congruent under unified than under a divided government. This reasoning has led to one of the more robust empirical findings on delegation: legislative delegation of policy-making authority to bureaucracies increases under a unified government. David Epstein and Sharyn O’Halloran (1999) established this at the federal level in a study of delegation from 1947 to 1995. John Huber and Charles Shipan (2002) further established that this pattern holds at the state level in the United States and comparatively among the Organisation for Economic Co-operation and Development countries (where “policy conflict” between the legislature and executive is operationalized by minority coalition governments).
A second and closely related explanation for delegation is that Congress delegates to tap into expertise that bureaucrats have over some policy domain. For instance, both the FCC and the Department of Justice make policy with respect to market competition; by delegating this authority, Congress can leverage the expertise these organizations have developed in the economic analysis of the competitive effects of industrial structure. The implicit presumption is that Congress does not have or wish to develop this expertise itself, which at some level is presumably a result of the opportunity cost of time spent doing so.
Formally, delegation of policy-making authority is often conceived as granting a “zone of discretion” to an agent, a set of policies among which the agent can choose freely and without further interference from the legislature. The legislature decides which policies are in the zone and which are not. This was formulated in 1984 by Bengt Holmstrom and was first applied in the political science literature on bureaucracy by Epstein and O’Halloran (1994). The critical strategic problem confronted by Congress is to induce the agency to use its expertise as Congress itself would use it, if Congress possessed it, by tailoring the zone of discretion in particular cases. Because the zone of discretion is a blunt instrument, this problem generally cannot be perfectly “solved” from Congress’s point of view; it is inherent that the agent will sometimes use its information to pursue policies Congress does not always prefer. This “agency loss” is simply a necessary cost of an otherwise desirable process and does not undermine the case for delegation in normative terms. A Congress aware of this agency loss would simply not delegate if it were too large compared with the benefits of delegation.
Empirical evidence bears out that bureaucratic expertise is a rationale for delegation. For instance, in their comprehensive study of major postwar federal legislation, Epstein and O’Halloran (1999) found that laws pertaining to more technically complex policy areas delegated more authority to bureaucratic agencies, net of constraints simultaneously placed on those agencies, than laws pertaining to less complex policy areas.
Of course, agencies cannot always be presumed to possess expertise, especially when they are initially created to deal with a novel policy problem. Delegation can also help induce agencies to develop expertise. First, agencies have an incentive to develop expertise if they anticipate that their policy authority over tasks they deem important will increase as a result (Sean Gailmard & John Patty, 2007). Second, delegating authority over a task that an agent considers important provides an incentive for the agent to acquire information about how best to perform the task. Given the delegated authority over an important task, the agent remains ignorant at its peril; acquiring expertise allows the agent to obtain private benefits from good performance.
Third, delegation can act as a commitment by Congress to a future course of policy. For instance, under the Steel Trigger Price Mechanism, the International Trade Commission (ITC) investigates possible instances of “dumping” in the United States by international trading partners. The policy commits the United States to import restrictions whenever dumping is found. If Congress had not delegated this authority to the ITC but instead retained the authority to determine policy on a case-by-case basis, import restrictions in response to dumping would not be so evident. It would depend on the policy preferences of members of Congress and the president toward import restrictions. A protrade Congress or president would be sufficient to prevent enactment of import restrictions, even if illegal dumping were identified. By delegating fact-finding authority and programming, a Congress at one time can preprogram the policy response to changing conditions even after a new Congress is seated. In celebrated analyses of the political origins of administrative institutions, Matthew McCubbins, Roger Noll, and Barry Weingast (1987) offer separate but related arguments that commitment of future policy is an important rationale for delegation. Such delegation as commitment is only effective if the administering agency is able to hold steady in changing political winds; thus, T. M. Moe predicts that in such cases agencies will be deliberately insulated from and unresponsive to future Congresses and presidents.
Opportunity cost theories suggest implicitly that delegation inherits whatever normative appeal is inherent in congressional policy goals. Commitment theory is more ambiguous because it suggests that one legislative coalition achieves its goals by compromising the ability of future coalitions to do the same, thus dampening the responsiveness of public policy to shifts in congressional goals.
Besides explanations based on achieving policy ends, scholars have also argued that delegation allows legislators to evade accountability and difficult policy choices. Congress may delegate to shift blame if policy may be unpopular or fails to achieve desired results. In some policy domains, success is expected and failure is a high-profile event. In airline safety, the public does not celebrate flights that land safely. When airplanes operate safely the public may even protest that safety and security measures are too onerous in terms of time and money. But when airplanes crash we can expect recriminations about gaps in the system. Much the same story applies to homeland security issues. The blame-shifting explanation suggests that Congress delegates authority over these policy areas so that Congress will not be held responsible in case of a problem, and doing so may even allow Congress to claim credit for solving problems. This explanation implicitly assumes the public does not realize that Congress chose to arrange the system this way and is thus still ultimately responsible. For instance, if the decision to delegate is separated by a long interval from resulting problems, it may not make sense for voters to hold sitting legislators answerable for the delegation and oversight of the agency’s initial policy choices.
Delegation from Congress to bureaucratic agencies, including the delegated power to make law, is pervasive in the United States. Indeed, it is a given in most major legislation passed since the New Deal. Delegation to administrative agencies cannot remove politics from policy making; it can merely move the political choices around in the policy process and push politics inexorably further into administration. Delegation is a choice that requires both normative justification and positive explanation. The positive explanations reviewed above are not necessarily mutually exclusive, though they carry dramatically different normative implications for how delegation from legislatures to bureaucracies should be evaluated.
- Epstein, D., & O’Halloran, S. (1994). Administrative procedures, information, and agency discretion. American Journal of Political Science, 38, 697-722.
- Epstein, D., & O’Halloran, S. (1999). Delegating powers: A transaction cost politics approach to policymaking under separate powers. New York: Cambridge University Press.
- Gailmard, S., & Patty, J. W. (2007). Slackers and zealots: Civil service, policy discretion, and bureaucratic expertise. American Journal of Political Science, 51(4), 873-889.
- Holmstrom, B. (1984). On the theory of delegation. In M. Boyer & R. Kihlstrom (Eds.), Bayesian models in economic theory. Amsterdam: Elsevier Science.
- Huber, J., & Shipan, C. (2002). Deliberate discretion: The institutional foundations of bureaucratic autonomy. New York: Cambridge University Press.
- McCubbins, M., Noll, R., & Weingast, B. (1987). Administrative procedures as instruments of political control. Journal of Law, Economics, and Organization, 3(2), 243-277.
- Schechter Poultry Corporation v. United States, 295 U.S. 495 (1935).