The Interagency Marketplace
affiliation not provided to SSRN
March 22, 2012
Minnesota Law Review, Vol. 96, No. 3, pp. 886-951, 2012
Federal agencies routinely trade money, regulatory power, and governmental services with each other. Collectively, these interagency exchanges create a vast public institution that I call the interagency marketplace. In this article, I offer a comprehensive descriptive and normative account of the legal rules governing the interagency marketplace. My overarching claim is that the interagency marketplace has the potential to generate significant governmental efficiencies by allowing agencies to hire other, more expert agencies to perform tasks for them. However, efficient interagency exchanges are stifled by a set of outdated statutory rules. In particular, current restrictions on interagency redelegation — that is, the transfer of regulatory power from one agency to another — are too severe. The current prohibition on profits from services provided in the interagency marketplace is also misguided. Removing the bar on profits would create financial incentives for expert agencies to offer their services and enter into mutually beneficial exchanges with other agencies. At a time when the most pressing regulatory problems are beyond the capacity of any single agency, the law should do more to facilitate efficient interagency arrangements. My suggestions to broaden relegation powers and permit agency profits would move the law in this direction.
Number of Pages in PDF File: 66
Keywords: administrative law, rulemaking, separation of powers, legislation, regulation
Date posted: March 23, 2012 ; Last revised: May 22, 2014