A Property Rights Approach to Legislative Delegation

Peter Grajzl

Washington and Lee University - Department of Economics; CESifo

Economics of Governance, Vol. 12, No. 2, pp. 177-200, 2011

This paper applies the property rights theory to study both positive and normative aspects of legislative delegation in a setup where interest groups directly influence lawmaking by initiating regulatory bargaining. A self-interested legislature choosing between the direct exercise of its legislative authority and delegation to an administrative agency must therefore trade off the value of bureaucratic competence against bureaucratic drift and, importantly, loss of control over bargaining. Our analysis, first, clarifies when the legislature's choice between delegation and no delegation is socially efficient or socially inefficient; second, highlights the role of political bargaining and shows that precluding interest group influence through bargaining may actually increase the scope for socially inefficient outcomes; and, third, illustrates the model's predictions in light of selected stylized facts and the practice of scant empirical work on legislative delegation.

Keywords: Legislative delegation, property rights, interest groups, regulatory bargaining

JEL Classification: D73, K23, K40, P50

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Date posted: April 30, 2011  

Suggested Citation

Grajzl, Peter, A Property Rights Approach to Legislative Delegation. Economics of Governance, Vol. 12, No. 2, pp. 177-200, 2011. Available at SSRN: http://ssrn.com/abstract=1825204

Contact Information

Peter Grajzl (Contact Author)
Washington and Lee University - Department of Economics ( email )
Lexington, VA 24450
United States
HOME PAGE: http://home.wlu.edu/~grajzlp/
CESifo ( email )
Poschinger Str. 5
Munich, DE-81679

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