Local and Global Knowledge in the Administrative State
Law, Liberty and State Conference, London School of Economics, June 20-21, 2013
30 Pages Posted: 3 Nov 2012 Last revised: 12 Feb 2013
Date Written: 2012
How should the administrative state be organized, from the epistemic point of view? There is a tension or tradeoff between local and global knowledge; this tradeoff implicitly structures a number of debates about the epistemic capacities of line agencies, the Office of Information and Regulatory Affairs, and the administrative state more generally. I will examine the tradeoff between local and global knowledge at two related levels. The first is the scope of the administrative state’s regulatory jurisdiction; this is the large-scale question of government versus markets that is central to the Hayekian program. The second level is the internal organization of the regulatory bureaucracy, within the area committed to the administrative state’s regulatory jurisdiction. Here the industrial organization literature has adapted Hayekian questions to new settings. On the first issue, Hayekian arguments for a constrained administrative state overlook the ability of non-market institutions to aggregate local and tacit knowledge. On the second issue, top-down epistemic coordination of agencies turns out to be indispensable; OIRA aggregates and coordinates dispersed information – information that is dispersed around the bureaucracy, rather than society -- and does so in a manner that cannot be replicated by decentralized horizontal coordination among agencies.
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