Well-Regulated

The future of progressive governance depends on the unglamorous, little-noticed world of regulation.

Federal regulatory action–and inaction–often generates top headlines: “Citizen Vigilance Leads to Toy Recalls” “Report Faults FDA on Drug Safety” “EPA Denies California’s Right to Mandate Emissions.” Federal agencies sit uneasily in our system of separated but overlapping branches of government, but they arguably do far more lawmaking than Congress and much more judging than the courts. CQ Weekly and the Congressional Record, for example, have reported that Congress passed nearly two dozen major statutes and more than 100 other public laws in 2001, respectively; by contrast, according to the Government Accountability Office (GAO), that year cabinet departments, the Executive Office of the President, and independent agencies promulgated 70 major rules and nearly 3,500 other regulations. Law professor Judith Resnik has calculated that the federal judicial branch conducted approximately 85,000 adversarial proceedings, including trials, in 2001; in the same period, administrative agencies engaged in over 700,000 such proceedings, including immigration and Social Security disputes.

Especially in partisan times, politicians and the press often label all agency rulemaking and adjudication as either desirable or troubling. In simple terms, they imply that liberals like regulation, while conservatives abhor it. But the reality of regulation is much more complicated. Much depends on who controls regulatory authority, and how they exercise that power. Not surprisingly, debates over agency behavior occupy scholars in political science departments, public policy schools, and law schools. But the regulatory system as a whole, tied to considerable real-world consequences, rarely draws the attention of policymakers, including those who would like to see more stringent federal regulations. As we approach the presidential election–and a new administration and agency leadership–it’s time to consider the benefits and problems of different mechanisms of regulation. Progressives must devote real attention and political capital to ensuring that agencies employ methods that are as efficient, effective, and democratically legitimate as possible.

To libertarians and free-market conservatives, the popular way of viewing the federal administrative state is through public choice theory, which looks at our vast bureaucratic apparatus and sees “iron triangles” everywhere. To them, agencies, Congress, and organized, narrow interest groups form powerful bonds, peddling regulatory initiatives that serve targeted interests at the expense of broader social well-being. Accountability and the generation of social welfare are nowhere to be seen.

In Regulation and Public Interests: The Possibility of Good Regulatory Government, Steven Croley, a political scientist and legal scholar at the University of Michigan, offers a more optimistic vision. He conceives of agencies as potentially autonomous institutions that can produce desirable regulatory outcomes, like the ozone and particulate matter rules issued in 1997 under the Clean Air Act. In doing so, he tears down the public choice account of the administrative state and builds an alternative theory of public interested regulation that depends on administrative process. The former effort is formidable, while the latter is admirable, if not completely successful.

In refreshingly readable prose–he is, after all, writing about regulatory theory–Croley carefully dissects the assumptions and empirical validity of the public choice worldview. In its most concentrated form, the theory is an easy target. Drawing on considerable academic work, Croley hones his attack on public choice’s premises concerning interest group formation, including that “interest groups seek regulatory decisions that advance the selfish interests of their members.” As he demonstrates, while the public choice framework might explain the power of, say, the oil industry, it has never been especially good at explaining the creation, maintenance, and regulatory reach achieved by environmental and consumer groups like the Sierra Club and Public Citizen for broad social goals.

Croley also questions public choice theory’s predictive power by looking at several testable propositions: that organized, narrow interests manipulate agencies and Congress more successfully than other groups; that the negotiations among these narrow interests, agencies, and Congress will not be transparent; that agency decisions will generate minimal public criticism; and that few interests will participate in regulatory decisionmaking processes. Through a series of case studies, Croley undermines these propositions, though larger-scale empirical work might ultimately prove more compelling. His cases examine, among other topics, the Environmental Protection Agency’s (EPA) ozone and particulate matter regulations, the Food and Drug Administration’s (FDA) tobacco restrictions (later struck down by the Supreme Court), and the Forest Service’s roadless rule for national forests (subsequently pulled by President George W. Bush’s administration). In all of these, Croley shows that narrow interest groups did not, in fact, drive the regulatory outcomes, that negotiations were remarkably transparent, that the regulatory process generated considerable debate, and that many interests took part. Croley is at his best when detailing how a wide range of interests fights for specific policies in the administrative state. By the end, we see a very different picture from the one public choice theory paints. Far from involving a small subset of the polity behind closed doors, the administrative process is fairly transparent and open to a diverse set of groups and individuals.

Croley’s book is the latest in a long line of scholarly works critiquing the theoretical assumptions and methodological commitments of public choice. Regulation and Public Interests is more than just an attack, however. The book comprehensively develops an alternative theory of the administrative state, one in which agencies wield their authority through various administrative procedures that the public choice account largely ignores–such as the promulgation of rules after the public has notice of a regulatory action and an opportunity to comment (termed “notice and comment rulemaking”), public hearings, and detailed explanations of decisions–to achieve regulatory outcomes Croley considers desirable. Whereas public choice theorists see agencies as dominated by Congress and interest groups, Croley sees them as much more autonomous and able to push through “public interested regulation” (a term whose definition shifts somewhat in the book).

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