Cognitive Loafing, Social Conformity and Judicial Review of Agency Rulemaking

Abstract

Those who have recently written about the impact of judicial review on agency decisionmaking have not treated the practice kindly. Many express concern about the burdens that review places on agencies, and some even conclude that judicial review hurts the quality of the decisions the agency makes when adopting a new rule. These critics, however, treat the agency and the particular decisionmakers within it as if they react as rational maximizers of utility towards the incentives created by judicial review. At most they give some passing reference to psychological constructs of how individuals and groups make decisions.

This paper takes as a major premise that psychology has much to tell us about the ways in which decisions deviate from the assumptions that public choice theorists and others who rely on economic rationality use in evaluating the workings of our governmental institutions. Individuals do not tend to optimize every decision, but instead rely on personal decision rules whose use becomes habit as well as more generally shared rules of thumb as shortcuts to making decisions. In certain situations, these shortcuts can lead to avoidable bad decisions. One mechanism for avoiding careless or improper reliance on such shortcuts is to hold the decisionmaker accountable for her choice. If structured properly, accountability can attenuate many of the systematic biases that flow from improper use of decisionmaking shortcuts.

The structure of beneficial accountability corresponds closely to the nature of judicial review of agency rulemaking under current standards of arbitrary and capricious review. There is also reason to believe that agency staff members react to judicial review of a rule as they do to direct accountability for an individual decision. In addition, arbitrary and capricious review is likely to reduce any magnification of individual biases that result from the group nature of agency decisionmaking. Hence, arbitrary and capricious review provides incentives for agency staff to take appropriate care and to avoid many systematic biases when formulating rules and ushering them through the rulemaking process. This does not mean that judicial review will eliminate all decisionmaking biases. There is at least one bias ? the propensity of individuals to avoid extreme choices even when logic dictate otherwise ? that judicial review might even exacerbate. In addition, review will never prevent all biased decisionmaking; it can only encourage decisionmaking processes that reduce the probability of bias. Finally, the psychological results which I discuss come predominately from laboratory experiments, some of which involve different individuals performing different tasks than those involved in writing agency rules. Hence, the suggestion that judicial review improves the quality of agency rulemaking must be seen as just that ? a suggestion. Nonetheless, I believe there is enough evidence to warrant further consideration of the likely impact of review on the performance on agency staff, and more particularly to refute critics who, without considering this evidence, conclude that judicial review has a deleterious impact on the quality of rulemaking.