Delegation and Positive-Sum Bureaucracies

Abstract

I develop a formal model of bureaucratic policymaking to investigate why a legislature would choose to delegate authority to a bureaucratic agency whose actions can be controlled, ex post, by an executive with divergent policy preferences. Because the executive and legislature might find different policies to be salient to their constituencies, I demonstrate that executive review of agency rulemaking can benefit both branches of government, relative to legislative delegation without the possibility of such review. In trying to undermine the impacts of executive oversight, agencies propose policies that could benefit the legislature were the executive to choose not to intervene in agency policymaking. Likewise, if the executive does intervene, executive review allows him to implement a policy more desirable than absent such review. This joint-desirability of executive review is more likely when legislative and executive policy preferences are relatively aligned, and when legislative and agency policy preferences are relatively divergent. The broader social welfare consequences of executive review depend on the relative effectiveness of the executive's oversight of agency policymaking. These results provide insight for why mediating lawmaking institutions such as the Office of Information and Regulatory Analysis (OIRA) continue to survive in a separation of powers system despite their potential to advantage one branch of government at the expense of the other.

Keywords: executive oversight, legislative delegation, OIRA

JEL Classification: H00