Beyond Agency Core Mission
53 Pages Posted: 11 Jul 2016 Last revised: 14 Jan 2017
Date Written: January 12, 2017
A long-standing view among legal scholars, political scientists, sociologists, and regulators posits that it is important for each regulatory agency to have a narrowly defined core mission and to focus on activities that are central to accomplishing it successfully. Although this view has no doctrinal foundation, rhetoric grounded on it crops up frequently in regulatory dialogues, especially in opposition to prospective agency regulations. The purpose of this Article is to formalize this “core mission model” of the administrative state and analyze its benefits, costs, and risks. An important starting point for the analysis is that, unlike a private corporation or a non-profit organization, a regulatory agency is not a free enterprise in a competitive market. Instead, as a “creature of statutes,” it stands in a principal-agent relationship with Congress, whose job in turn is to respond to society’s various needs and problems, as they arise, by delegating responsibilities to new or existing agencies. Given this relationship, the core mission model has to be operationalized in one of two ways: either as an ex post prioritizing strategy (on the part of the agency) or as an ex ante delegating strategy (on the part of Congress). Both strategies, however, entail significant costs on the government and society. As an ex post prioritizing strategy, the model would promote selective attention on the part of the agency. While this strategy may reduce internal organizational costs for the agency (intra-agency coordination costs), it will also give rise to regulatory gaps, which can lead to costly outcomes, such as crises or controversies. As an ex ante delegating strategy, the model will not be cost-effective if considerations based on conflicts among multiple agencies (inter-agency coordination costs) and/or wasteful duplication of government resources (duplicative costs) call for a deviation from the model, such as a conglomerate agency with a more intentional administrative design. Thus, a transaction-cost-based approach to agency jurisdiction design can at times counsel against subscription to the core mission model. For this reason, in order to maintain its relevance in today’s regulatory dialogues, the core mission model should be recast under a more general framework which allows for discussions of these broader categories of social costs as well as considerations of alternative designs within each agency. The focus of the dialogues should likewise shift from how well a regulatory assignment is aligned with the agency’s core mission to how to effectively cover all interests that need protection through regulation, without wasting government resources.
Keywords: agency core mission, interagency coordination, intra-agency coordination, duplicative costs, principal-agent, regulatory gap, agency jurisdiction design, institutional design, law and economics, cost-benefit analysis, organizational behavior
JEL Classification: K23, D02, D61, D73
Suggested Citation: Suggested Citation