Theory of Delegation

Abstract

Abstract This chapter presents the economic theory of delegation. The delegation of power—from the President to administrators, from citizens to legislators, and so on—is central to public law. This chapter begins with the positive theory of delegation. It analyzes the trade-offs principals face when deciding whether to delegate authority, and it considers whether principals should guide their agents using “rules” or “standards.” Turning to normative theory, the chapter studies the conditions under which delegation benefits principals, agents, and the general public. Finally, the chapter addresses interpretation by courts. Lawyers and judges routinely ask whether a statute grants an agency the power to take a particular action. The chapter develops the “delegation canon” to help answer that question.