Expertise, Subversion, and Bureaucratic Discretion

Abstract

This article examines a legislature's delegation of policy-making authority to an imperfectly controlled, expert bureaucrat. The legislature can reduce the bureaucrat's expertise advantage through costly investigations of its own before delegating. Further, the bureaucrat is granted discretionary bounds by the legislature, but can subvert legislative dictates by stepping beyond them at some cost. I analyze the interaction of preference divergence, investigation cost to the legislature, and subversion cost to the bureaucrat on the decision to delegate. The model shows that, because of the equilibrium effect of subversion on discretion, bureaucrats will want subversion of legislative dictates to be difficult, while legislators want it to be relatively easy. It also highlights an indirect effect between preference divergence and discretion: preference divergence leads the legislature to become more expert on policy matters, which leads it to delegate less. Delegation of policy-making authority from legislatures to bureaucrats poses fundamental questions about policy making in an administrative state. Some of these questions, such as why legislatures would ever delegate and how they can cope with the control problem delegation creates, have been extensively studied by economists and political scientists. An issue that has until recently received less attention is what explains the variation in delegation patterns across policy areas. This article is an effort to contribute to that part of the study of legislative-bureaucratic interaction. Delegation is often a concession to expertise; thus the cost of alternative forms of expertise is important in understanding this control problem. The extent of the bureaucracy's technical superiority does not arise exogenously. A legislature has a number of other institutional choices available to it, such as creating its own experts in the legislative branch, or acquiring expertise itself. The costs of other sources of expertise will vary with the technicalities