Working smart and hard? Agency effort, judicial review, and policy precision
| Published date | 01 January 2017 |
| Date | 01 January 2017 |
| DOI | 10.1177/0951629816630430 |
| Subject Matter | Articles |
Article
Working smart and hard?
Agency effort, judicial review,
and policy precision
Journal of Theoretical Politics
2017, Vol. 29(1) 69–96
©The Author(s) 2016
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DOI:10.1177/0951629816630430
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Ian R Turner
Department of Political Science, Texas A&M University, USA
Abstract
The lion’s share of policy in the United States is made by administrative agencies. Agencies not
only make policy choices, they must also implement policy effectively. Oversight institutions play an
integral role in the policymaking process by monitoring, through review of agency policy actions,
both policymaking tasks. Through analysis of a formal model I develop a theory of policymaking
between agencies and courts and show that review can impact agency effort choices even when
bureaucratic subversion is not a concern. At times the court has no impact on this effort and the
agency is unconstrained. However, when the agency’s effort dictates whether or not the court
defers to the agency’s actions judicial review does affect effort decisions. In this setting, review
can either strengthen or, counter-intuitively, weaken agency effort incentives. Implications for
executive and congressional oversight are discussed in light of these results.
Keywords
Bureaucracy; formal theory; intergovernmental relations; judicial review; oversight; policymaking
1. Introduction
The lion’s share of policy in the United States is made by administrative agencies, rather
than through legislative or executive actions. One pervasive concern with the rise of
administration is a potential severing of democratic connections to policy outcomes. This
concern arises from the possibility of agency subversion of directives provided by elected
political principals (e.g. Gailmard, 2002). One mechanism in the current system to moni-
tor agency compliance with legislative or executive directives is the subjection of agency
actions to ex post oversight. Two common forms of bureaucratic oversight are judicial
review and executive review conducted by the Office of Information and Regulatory
Affairs (OIRA).1
Corresponding author:
Ian R Turner, Department of Political Science, Texas A&M University, USA.
Email: irturner@tamu.edu
70 Journal of Theoretical Politics 29(1)
For example, regulations must pass executive review by OIRA before being codified
as binding law. For this reason OIRA has often been viewed as a regulatory ‘gatekeeper’
that can stifle and effectively veto agency policies (Bolton et al., 2015; Copeland, 2005).
Additionally, agencies perpetually interact with individuals and firms that may challenge
their actions in court. There are often interest groups or industries that disagree vehe-
mently with agency actions and seek relief through judicial review of those actions. In
these cases, courts are empowered to reviewand invalidate agency actions (Breyer, 1986;
McGarity, 1992).2Moreover, agencies operate in the shadow of review whether they
are promulgating new policies, updating existing policies to reflect new environments,
or simply enforcing existing policy. In short, agencies develop and implement policy
while continually facing the prospect of having their actions reviewed and potentially
invalidated.
The substantive impact of judicial oversight on regulatory quality has long been of
interest in law and policy literatures. For instance, Melnick (1983) argues against the
view that judicial review led to improvements of environmental regulation. He concludes
that, overall, court decisions dealing with various aspects of Clean Air Act regulation
harmed the quality of environmental policy. In contrast, Sunstein (1989) argues that, on
balance, judicial review of agency actions produces net benefits. He notes courts’ role
in invalidating many ill-conceived agency actions such as over-aggressive regulations of
transportation emissions in the 1970s.3Disagreement such as this over whether judicial
oversight of administrative action is beneficial suggests that assessments of the impact
of review on different aspects of the process are required to better understand when and
how positive or negative effects of review are realized. As Sunstein (1989) succinctly
notes, ‘judicial review should be evaluated in terms of its systemic consequences for the
administrative process, which takes place in the shadow of review’ (p. 527).
Scholars have highlighted the ability of judicial and executive review to ensure that
agencies are choosing policies that are congruent with the wishes of some democratically
accountable political principal, e.g. Congress or the president (e.g. Acs and Cameron,
2013; Epstein and O’Halloran, 1999; Shipan, 1997). However, agencies do more than
choose the content of policy, they must also put these policies into practice through
effective implementation or enforcement of those choices.4The effectof oversight on the
incentives for agencies to workhard at enforcing policy effectively is less discussed but of
equal importance (see Canes-Wrone, 2003, 2006). Just as biasing the content of policy by
agencies can lead to inefficient outcomes so too can poorly enforced policies even when
policy choices have been made perfectly faithfully. This raises the following question:
how and when does oversight impact agency effort investments made to improve imple-
mentation? That is, given that agencies are working smart, how does oversight impact
whether they work hard?
In this paper I assess the effects of oversight, like OIRA or judicial review, on the
administrative process through the lens of its effect on the incentives for agencies to
invest high effort to improvepolicy enforcement. Specifically I analyze a game-theoretic
model of policymaking between an administrative agency and a court.5The agency first
chooses a high or low effort investment that dictates how precisely realized policy out-
comes will approximate the substantive goal laid out in the content of the policy. This
represents an agency’s investment in what Carpenter (2001) refers to as ‘programmatic
capacity’.6An ex ante high effort investment means that the agency has higher capacity
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