Designing Agencies: Public Choice and Public Law
RESEARCH HANDBOOK IN PUBLIC LAW AND PUBLIC CHOICE, D. Farber & A. O’Connell, eds., Edward Elgar, 2010
32 Pages Posted: 29 Jan 2011
Date Written: December 30, 2010
In most scholarship on bureaucracy, the existence of administrative agencies is the starting point for analysis. Yet, from the perspective of institutional design, there is no necessary reason to assume that a supreme legislature will choose to delegate policymaking authority to a bureaucracy. Even if delegation to some bureaucratic entity results, legislatures might sub-delegate to legislative bureaucracies rather than agencies located within the executive branch. Once an executive bureaucracy exists, however, the menu of available bureaucratic structures will influence subsequent legislative decisions about whether to delegate authority in a specific instance. This book chapter asks how agencies are and should be structured, conditional on an affirmative decision by a legislature to delegate policymaking authority. This is the core problem of agency design. Instead of attempting a comprehensive survey of all public choice work on agency design, the chapter discusses some of the more common and obvious areas of overlap, tacking back and forth between public choice theory and agency design problems in public law. Rather than insist on a particular application or interpretation, the chapter tries to illustrate the many ways in which these traditions fit together. Part I discusses relevant theoretical priors about the creation of a bureaucratic structure, focusing on questions like what drives bureaucratic behavior, what is the political problem that agencies are supposed to help solve, and what new problems does reliance on agencies to develop public policy produce? Part II analyzes the conceptual relationship between the design of agency decisionmaking structures and the extent of control by other political institutions like the legislature. Part II then applies these theoretical insights to one administrative law doctrinal dispute (legislative rules) and one constitutional law doctrine (nondelegation). Part III turns to the problem of vertical bureaucratic structure by focusing on the twin problems of bureaucratic centralization and insulation, particularly in the context of the unitary executive debate. Part IV shifts from vertical bureaucratic structure to horizontal problems by emphasizing public choice and doctrinal disputes about the relationship among administrative agencies.
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