The Role of Oversight Committees in Closed Rule Legislation

32 Pages Posted: 15 Feb 2012

See all articles by Wim Van Gestel

Wim Van Gestel

KU Leuven - Faculty of Business and Economics (FBE)

Christophe Crombez

Stanford University - Freeman Spogli Institute for International Studies; KU Leuven - Faculty of Business and Economics (FEB)

Date Written: September 20, 2011

Abstract

We formulate a game-theoretical model of closed rule legislation in the presence of informational asymmetries. In the model an agenda setter with private information proposes a policy to a legislature. The legislature appoints an oversight committee to monitor the agenda setter. We study the rationale for this appointment, and analyze the equilibrium oversight committee member choices for the legislators. We conclude that it is optimal for the legislators to appoint oversight committee members who are as far from them as is the agenda setter, but in the opposite direction, rather than do the monitoring themselves. The appointment of such oversight committee members represents a credible means for the legislators to commit to reject proposals that they only marginally prefer to the status quo.

Keywords: European Union, trade policy, delegation, oversight, asymmetric information

Suggested Citation

Van Gestel, Wim and Crombez, Christophe, The Role of Oversight Committees in Closed Rule Legislation (September 20, 2011). Available at SSRN: https://ssrn.com/abstract=2004375 or http://dx.doi.org/10.2139/ssrn.2004375

Wim Van Gestel (Contact Author)

KU Leuven - Faculty of Business and Economics (FBE) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Christophe Crombez

Stanford University - Freeman Spogli Institute for International Studies ( email )

Stanford, CA 94305
United States

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

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