Rating the Competition Agencies: What Constitutes Good Performance?

Abstract:     
Debates about the U.S. federal competition agencies have revealed a serious need to return to a basic question: what is good performance? Assessments of agency performance are important for many reasons: public perception, the ability to influence legislative actions, judicial decisions to defer, and the morale of current employees. Recent critiques on competition agencies and related commentary have demonstrated a need for better performance standards by begging two basic questions: (1) by what criteria should the performance of competition agencies be judged?; and (2) once the criteria for the agency report card have been set, how should they be applied in order to determine the agency grades? In setting out the design and application of evaluation criteria, this paper emphasizes investments in achieving superior institutional design and enhancing agency capability.

The conventional report card does not grade activity that makes positive contributions to the agencies future. Instead, it employs a case-driven analysis that looks at agency activity. This is an ineffective metric because it overlooks non-litigation policy and fails to incentivize incumbent leadership to invest in development of the agency. The conventional metric has other weaknesses. There is a lack of consensus over past experience of the agency, including what cases the agency prosecuted, and a lack of consensus about what is significant. Critiques of the Bush era competition agencies evidence these weaknesses.

The two criteria for good performance are substantive results and superior administrative techniques and processes. However, a lack of consistency overtime can make it difficult to apply these criteria in practice. In addition to a focus on output initiatives that improve economic performance, good performance requires capital investments in long-term capability. Agency performance grades should take into account both of these dimensions of good performance.

Number of Pages in PDF File: 25

Keywords: Performance Grades, Performance Metric, Department of Justice, Federal Trade Commission, Evaluation Criteria, Long-term capital investments

JEL Classification: L40, H10, K21

Accepted Paper Series