Corralling capture

Harvard Journal of Law and Public Policy

Volumn 36, Issue 1, 2013, Pages 31-39

  Engstrom, David Freeman ^a  

^a STANFORD LAW SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84876259985     PISSN: 01934872     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (56)

1. See Michael E. Levine, Regulatory Capture, in 3 THE NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW 267, 267 (Peter Newman ed., 1998).
2. See, e.g., James Kwak, Cultural Capture and the Financial Crisis, in PREVENTING CAPTURE: SPECIAL INTEREST INFLUENCE AND HOW TO LIMIT IT (Daniel Carpenter & David Moss eds., forthcoming 2013), (manuscript at 9, 11, 31), available at http://www.tobinproject.org/sites/tobinproject.org/files/assets/ Kwak%20%20Cultural%20Capture%20and%20the%20Financial%20Crisis%20%2810.24.11%29. pdf.
3. See STEVEN P. CROLEY, REGULATION AND PUBLIC INTERESTS: THE POSSIBILITY OF GOOD REGULATORY GOVERNMENT 14-25 (2007) (summarizing traditional "capture" view);
4. George J. Stigler, The Theory of Economic Regulation, 2 BELL J. ECON. & MGMT. SCI. 3 (1971) (offering seminal treatment of capture theory);
5. see also Gary S. Becker, A Theory of Competition Among Pressure Groups for Political Influence, 98 Q.J. OF ECON. 371 (1983) (extending and critiquing the Stigler model);
6. Sam Peltzman, Toward a More General Theory of Regulation, 19 J.L. & ECON. 211 (1976) (same);
7. Richard A. Posner, Theories of Economic Regulation, 5 BELL. J. ECON. & MGMT. SCI. 335, 343-50 (1974) (same).
8. See Steven P. Croley, Public Interested Regulation, 28 FLA. ST. U. L. REV. 7, 14 (2000).
9. RUSSEL HARDIN, COLLECTIVE ACTION (1982) (extending the Olson model);
10. MANCUR OLSON, JR., THE LOGIC OF COLLECTIVE ACTION: PUBLIC GOODS AND THE THEORY OF GROUPS (1965) (offering seminal account of challenges group organization poses).
11. Stanley I. Langbein, Cognitive Capture, Parliamentary Parentheses, and the Rise of Fractional Apportionment, 39 TAX MGM'T INT'L J. 567, 580-81 (2010);
12. Willem H. Buiter, Central banks and financial crises 104, 106 (Sept. 14, 2008) (unpublished manuscript), available at http://www.willembuiter.com/hole. pdf (setting forth theory of "cognitive regulatory capture").
13. see also Steven M. Davidoff, The Government's Elite and Regulatory Capture, N.Y. TIMES (June 11, 2010, 2:00 PM), http://dealbook.nytimes.com/ 2010/06/11/the-governments-elite-and-regulatory-capture.
14. See, e.g., Brooksley Born, Foreword: Deregulation: A Major Cause of the Financial Crisis, 5 HARV. L. & POL'Y REV. 231, 231-32 (2011).
15. For a version of the argument in the popular press, see Simon Johnson, The Quiet Coup, THE ATLANTIC, May 2009, http:// www.theatlantic.com/magazine/ archive/2009/05/thequiet- coup/7364/ (arguing that the financial industry gradually shaped both the technocratic and normative views of regulators).
16. Mark Kelman, On Democracy- Bashing: A Skeptical Look at the Theoretical and "Empirical" Practice of the Public Choice Movement, 74 VA. L. REV. 199, 204-05, 236-68 (1988) (offering an earlier canvass of existing studies and arriving at the same conclusion).
17. see also David A. Moss & Mary Oey, The Paranoid Style in the Study of American Politics, in GOVERNMENT AND MARKETS: TOWARD A NEW THEORY OF REGULATION 256, 257 (Edward J. Balleisen & David A. Moss eds., 2010) (describing three policy episodes-voting rights, Medicare, and Superfund-in which "special interests appear to have given way to the general interest in the policymaking process").
18. For classic arguments for and against reviving the non-delegation doctrine, compare JOHN HART ELY, DEMOCRACY AND DISTRUST: A THEORY OF JUDICIAL REVIEW 125-34 (1980) (arguing for revival of non-delegation doctrine as a way to discipline congressional lawmaking)
19. JAMES O. FREEDMAN, CRISIS AND LEGITIMACY: THE ADMINISTRATIVE PROCESS AND AMERICAN GOVERNMENT 78-94 (1978) (same)
20. THEODORE LOWI, THE END OF LIBERALISM: IDEOLOGY, POLICY, AND THE CRISIS OF PUBLIC AUTHORITY 129-146, 297-99 (1969) (same)
21. Louis L. Jaffe, The Illusion of the Ideal Administration, 86 HARV. L. REV. 1183, 1190 & n.37 (1973) (arguing against non-delegation's revival)
22. Richard B. Stewart, The Reformation of American Administrative Law, 88 HARV. L. REV. 1669, 1693-97 (1975) (same).
23. The most prominent judicial argument in favor of reviving non-delegation is then-Justice Rehnquist's concurrence in the so-called Benzene Case. See Indus. Union Dep't v. Am. Petroleum Inst., 448 U.S. 607, 687 (1980) (Rehnquist, J., concurring) ("If we are ever to reshoulder the burden of ensuring that Congress itself make the critical policy decisions, these are surely the cases in which to do it. It is difficult to imagine a more obvious example of Congress simply avoiding a choice which was both fundamental for purposes of the statute and yet politically so divisive that the necessary decision or compromise was difficult, if not impossible, to hammer out in the legislative forge.").
24. As students of administrative law know, however, the Supreme Court decisively rejected the D.C. Circuit's attempt to revive non-delegation in Whitman v. Am. Trucking Ass'n, 531 U.S. 457, 476 (2001).
25. Still, some have argued that non-delegation lives on in other forms. See, e.g., Cass R. Sunstein, Nondelegation Canons, 67 U. CHI. L. REV. 315, 316 (2000) (arguing that non-delegation doctrine has been "relocated" to various canons of statutory interpretation).
26. Arlette Saenz & Emily Friedman, Rick Perry's Debate Lapse: 'Oops'-Can't Remember Department of Energy, ABC NEWS, Nov. 9, 2011, http://abcnews.go.com/blogs/politics/2011/11/rick-perrys-debate-lapse-oops-cant- remember-departmentof- energy.
27. See, e.g., Rachel E. Barkow, Insulating Agencies: Avoiding Capture Through Institutional Design, 89 TEX. L. REV. 15, 27-30 (2010).
28. See, e.g., JAMES Q. WILSON, BUREAUCRACY: WHAT GOVERNMENT AGENCIES DO AND WHY THEY DO IT 79-83 (1989) (offering a typology of the ways in which the interest-group environment can vary across policy contexts);
29. William N. Eskridge, Jr., Politics Without Romance: Implications of Public Choice Theory for Statutory Interpretation, 74 VA. L. REV. 275, 285-87 (1988) (discussing varying interestgroup dynamics across policy contexts).
30. See, e.g., DENNIS C. MUELLER, PUBLIC CHOICE III 303-08 (1989);
31. ANTHONY DOWNS, AN ECONOMIC THEORY OF DEMOCRACY 238-59 (1957).
32. For policy "traceability" in the legislative context, but with obvious applications to the administrative process as well, see R. DOUGLAS ARNOLD, THE LOGIC OF CONGRESSIONAL ACTION 119-20 (1990) (describing congressional use of legislative procedures to conceal actions from public view or make it difficult to trace policy outcomes to legislative (in)action).
33. See Administrative Procedure Act, 5 U.S.C. § 500 (2006).
34. see also Administrative Procedure Act §§ 552-553 (setting forth procedural requirements for informal rulemaking).
35. Matthew O. McCubbins & Thomas Schwartz, Congressional Oversight Overlooked: Police Patrols versus Fire Alarms, 28 AM. J. POL. SCI. 165, 166, 176 (1984).
36. See Administrative Procedure Act § 554.
37. See Heckler v. Chaney, 470 U.S. 821, 830-35 (1985) (holding agency decisions not to enforce to be unreviewable under the APA).
38. See, e.g., ANDREW P. MORRISS, BRUCE YANDLE & ANDREW DORCHAK, REGULATION BY LITIGATION 1 (2009) (noting that "regulation-by- litigation" entails "bringing suits and achieving ends that could be and traditionally had been achieved by regulatory agencies using rulemaking procedures");
39. For earlier analyses making similar arguments, see generally REGULATION THROUGH LITIGATION 50-52 (Kip Viscusi ed., 2002);
40. William M. Sage, Unfinished Business: How Litigation Relates to Health Care Regulation, 28 J. HEALTH POL. POL'Y & L. 387 (2003).
41. See generally 31 U.S.C. § 3729-3733 (2006).
42. David Freeman Engstrom, Public Regulation of Private Enforcement: Empirical Analysis of DOJ Oversight of Qui Tam Litigation Under the False Claims Act, 107 NW. U. L. REV. (forthcoming 2013).
43. David Freeman Engstrom, Harnessing the Private Attorney General: Evidence from Qui Tam Litigation, 112 COLUM. L. REV. 1244, 1246 (2012) (noting more than 600 qui tam suits and $3 billion in recoveries in 2011 compared to 600 securities class actions and only $1.4 billion in recoveries in that same year).
44. See DAVID EPSTEIN & SHARYN O'HALLORAN, DELEGATING POWERS: A TRANSACTION COST POLITICS APPROACH TO POLICY MAKING UNDER SEPARATE POWERS 7 (1999).
45. Iowa currently has four members of Congress on agricultural committees. Its two Senators sit on the Senate Committee on Agriculture, Nutrition and Forestry, and two of its five Representatives sit on the House Committee on Agriculture. See COMMITTEE MEMBERS, http://agriculture.house.gov/about/ membership (last visited Nov. 4, 2012) (listing the members of the Committee on Agriculture);
46. COMMITTEE MEMBERSHIP, http://www.ag.senate.gov/about (last visited Nov. 4, 2012) (listing the members of the Committee on Agriculture, Nutrition and Forestry).
47. To be sure, this is a contested point among political scientists, and some have countered the notion that committee members are outliers relative to the median legislator. See, e.g., KEITH KREHBIEL, PIVOTAL POLITICS: A THEORY OF U.S. LAWMAKING 191-200, 232-34 (1998) (offering evidence from the period 1993-1997 that most committee members have policy preferences close to that of the median floor member).
48. Other classic studies, however, clearly link committee composition to agency enforcement decisions. See Barry R. Weingast & Mark J. Moran, Bureaucratic Discretion or Congressional Control? Regulatory Policymaking by the Federal Trade Commission, 91 J. POL. ECON. 765, 779, 788-92 (1983) (asserting that "firms located in districts represented on FTC oversight committees are favored in the commission's antitrust decisions" and that "[t]he statistical evidence implies that the FTC is remarkably sensitive to changes in the composition of its oversight subcommittee."). Two conclusions follow from studies of the latter type. First, capture of legislative committee members, if it happens, may exacerbate capture at the agency level via oversight activity. Second, committee actions cannot always be perfectly policed by legislative leaders even if committee members are not, on average and over time, ideological outliers relative to legislative medians.
49. See Margaret H. Lemos, The Other Delegate: Judicially Administered Statutes and the Nondelegation Doctrine, 81 S. CAL. L. REV. 405 (2008) (exploring the practice of congressional delegation to the judiciary).
50. For earlier efforts to theorize about judicial delegations, see Morris P. Fiorina, Legislative Choice of Regulatory Forms: Legal Process or Administrative Process?, 39 PUB. CHOICE 33, 46-52 (1982);
51. Matthew C. Stephenson, Legislative Allocation of Delegated Power: Uncertainty, Risk, and the Choice Between Agencies and Courts, 119 HARV. L. REV. 1035 (2006).
52. See Marc Galanter, Why the "Haves" Come Out Ahead: Speculations on the Limits of Legal Change, 9 LAW & SOC'Y REV. 97-103 (1974) (discussing the many advantages that "repeat players" have over the "one-shotters" in litigation).
53. See NEIL K. KOMESAR, IMPERFECT ALTERNATIVES: CHOOSING INSTITUTIONS IN LAW, ECONOMICS, AND PUBLIC POLICY 23 (1994).
54. JERRY L. MASHAW, GREED, CHAOS, AND GOVERNANCE: USING PUBLIC CHOICE TO IMPROVE PUBLIC LAW (1997).
55. See, e.g., C. Boyden Gray, Congressional Abdication: Delegation Without Detail and Without Waiver, 36 HARV. J.L. & PUB. POL'Y 41 (2013).
56. "Starve the beast" commonly refers to the political strategy of cutting taxes before cutting spending, then using the ensuing budget deficit as an argument to reduce existing spending or reject new forms of spending. Though it has become a centerpiece of anti-tax advocates such as Grover Norquist, the term is often attributed to President Reagan's budget director, David Stockman. See, e.g., Richard Lavoie, Patriotism and Taxation: The Tax Compliance Implications of the Tea Party Movement, 45 LOY. L.A. L. REV. 39, 73 & n.134, 74-76 (2011) (tracing term's origins and reviewing existing studies about its efficacy as a political strategy).