The role of oversight committees in closed rule legislation
| Date | 01 October 2014 |
| Published date | 01 October 2014 |
| Author | Wim Van Gestel,Christophe Crombez |
| DOI | 10.1177/0951629813507644 |
| Subject Matter | Articles |
Article
The role of oversight
committees in closed rule
legislation
Journal of Theoretical Politics
2014, Vol. 26(4) 521–547
©The Author(s) 2013
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DOI:10.1177/0951629813507644
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Wim Van Gestel
Faculty of Economics and Business at KU Leuven, Belgium
Christophe Crombez
Freeman Spogli Institute for International Studies at Stanford University, USA; Faculty of Economics and
Business at KU Leuven, Belgium
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 legis-
lature. 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 direc-
tion, 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
Asymmetric information; delegation; European Union; oversight; trade policy
1. Introduction
Delegation is an important characteristic of policy making. Providing incentives to
specialize in specific policy matters represents one of the main rationales for delegation
(Gilligan and Krehbiel, 1987, 1989). Legislators cannot develop expertise in all policy
areas. For that reason they set up committees to study specific policy domains. They
often use closed rule procedures to provide these bodies with incentives to specialize.
Corresponding author:
Wim Van Gestel, Faculty of Economics and Business, KU Leuven, Naamsestraat 69, 3000 Leuven, Belgium.
Email: wim.vangestel@kuleuven.be
522 Journal of Theoretical Politics 26(4)
However, the delegation of authority can give rise to moral hazard problems. Therefore
this relationship is often portrayed as a principal–agent relationship.
To regain control over their agents, the principals have several tools at their disposal.
Peress (2009) showedthat among those tools is the requirement to employ supermajority
rule. If an agenda setter is powerful, the median legislator may prefer to consider the
agenda setter’s proposal under supermajority rather than simple majority rule. In doing
so, the median legislator appoints additional veto players that are more extreme than
himself. He thus creates a credible commitment to reject proposals that he is indifferent
over relativeto the status quo and obtains a policy he prefers more. In this paper we argue
that under asymmetric information legislators can achieve similar results by appointing
an oversight committee. By using an oversight committee, a committee without veto
rights, that acts as an information transmitter, legislators can credibly commit to reject
marginally improving proposals.
One example of legislative delegation with an oversight committee is trade policy
making in the European Union (EU).1Authors such as Damro (2007) and Kerremans
(2003) argue that delegation in EU external trade policy takes place at two levels. First,
there is delegation of authority from the member state governments to the legislative
members in the Council.2Second, there is delegation from the Council members to the
Commission: the Commission negotiates trade agreements and drafts trade policy pro-
posals (Meunier and Nicolaïdis, 2006).3The Council then considers the Commission’s
proposals under supermajority rule, which is called qualified majority rule in the EU.
Even though the Commission’s dominant role in trade policy making renders trade
one of the most supranational policy areas in the EU, Aggarwal and Fogarty (2004), De
Bièvre and Dür (2005) and Meunier (2005) also stress the important role of the member
states by pointing out the many tools at their disposal to control the Commission. The
monitoring tool that relates to this paper is the Trade PolicyCommittee (TPC).4The TPC
frequently sits at the table with the Commission. It fulfills two basic functions. First, it
provides a channel of information to the Commission on the preferences of the member
states. This information may give the Commission an opportunity to alter its proposals
and get them adopted in the Council. Second, the TPC directly monitors the Commission
for the Council and transmits information to it.
While the first function is fairly clear and has been elaborately discussed in the liter-
ature, less is known about the mechanisms of monitoring. Most authors limit themselves
to stating that the principal monitors the agent via the TPC. The reality is somewhat more
complex, that is, the member states in the Council delegate the authority to monitor the
Commission to the TPC. The TPC is part of what is called comitology in the EU. This
system, consisting of 200–300 committees, enables the member states to keep track of
delegated powers and to intervene when they deem it necessary (Blom-Hansen, 2011).
As an example of TPC involvement, Delreux and Kerremans (2010) argue that in
the GATT Uruguay Round and the WTO’s Doha Development Agenda (DDA), the
TPC played the most crucial role in coordinating member state positions across differ-
ent issues. Moreover, Delreux and Kerremans state that the TPC gave information to
the Council that links technical concerns with political considerations. This was espe-
cially so in environmental negotiations where the general coordination meetings often
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