A Theory of Strategic Oversight: Congress, Lobbyists, and the Bureaucracy

Abstract

This article develops a formal model of interest groups and congressional control of the bureaucracy. It shows that, even when interest groups act strategically, lobbyists can facilitate Congress's oversight role. Our results indicate that lobbying can help reduce informational asymmetries between Congress and the bureaucracy, and that the mere threat of sounding a fire alarm can result in policy concessions for interest groups. We demonstrate that agencies often moderate their proposals to obtain interest-group support, that Interest groups will be truthful in their endorsements even with no explicit penalty for lying, and that lobbying can reduce the uncertainty surrounding policy outcomes. Moreover, when multiple interest groups lobby Congress, legislators make oversight decisions based on the range of moderate groups that support the agency's actions. Thus they can control administrative agencies by observing the dMding line between interest groups that support the agency's proposal and those that oppose it. Congressional control of the bureaucracy is at best imperfect. Agencies are better informed about the details of their policy areas, making it difficult for legislators to effectively oversee their actions. Congress employs a variety of mechanisms to monitor agency behavior: notice-and-comment rulemaking, reporting requirements, and budgetary hearings, to name just a few. To be effective, however, these direct controls require a considerable amount of time and resources. A second method by which legislators can reduce informational asymmetries is to rely on outside interests to evaluate proposed agency actions. But lobbying groups will offer advice only to promote their own concerns. The question is whether interest groups, acting strategically, can help Congress control the bureaucracy.