Download this Paper Open PDF in Browser

Consume or Invest: What Do/Should Agency Leaders Maximize?

30 Pages Posted: 20 Dec 2015 Last revised: 5 Apr 2016

William E. Kovacic

George Washington University - Law School; King's College London – The Dickson Poon School of Law

David A. Hyman

Georgetown University

Date Written: December 19, 2015

Abstract

In the regulatory state, agency leaders face a fundamental choice: should they “consume” or should they “invest?” “Consume” means launching high profile cases and rule-making. “Invest” means developing and nurturing the necessary infrastructure for the agency to handle whatever the future may bring. The former brings headlines, while the latter will be completely ignored. Unsurprisingly, consumption is routinely prioritized, and investment is deferred, downgraded, or overlooked entirely. This essay outlines the incentives for agency leadership to behave in this way and explores the resulting agency costs (pun intended). The U.S. Federal Trade Commission’s health care portfolio provides a useful case study of how one agency managed and minimized these costs. Our essay concludes with several proposals that should help encourage agency leadership to strike a better balance between consumption and investment.

Keywords: antitrust, administrative law, agency design

JEL Classification: K00, K21, H1

Suggested Citation

Kovacic, William E. and Hyman, David A., Consume or Invest: What Do/Should Agency Leaders Maximize? (December 19, 2015). Washington Law Review, Forthcoming; GWU Law School Public Law Research Paper No. 2015-60; GWU Legal Studies Research Paper No. 2015-60; University of Illinois College of Law Legal Studies Research Paper No. 16-11. Available at SSRN: https://ssrn.com/abstract=2705919

William E. Kovacic

George Washington University - Law School ( email )

2000 H Street, N.W.
Washington, DC 20052
United States
202.994.8123 (Phone)

HOME PAGE: http://www.law.gwu.edu/faculty/profile.aspx?id=1731

King's College London – The Dickson Poon School of Law

Somerset House East Wing
Strand
London, WC2R 2LS
United Kingdom

David Hyman (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Paper statistics

Downloads
135
Rank
182,692
Abstract Views
570