Independent Regulatory Commissions Research Articles

The Novice Administrative State: The Function of Regulatory Commissions in the Progressive Era

AbstractResearchers have long argued that an important impetus for the creation of the administrative state was the desire to bring experts into government and especially into the regulation of business. Yet Progressive Era politicians did not focus on attracting experts when crafting one part of the administrative state, independent regulatory commissions. This article examines the contemporary understanding of regulatory commissions and shows that they were most often intended as a substitute for vacillating juries. Commissions’ most important advantage over juries was that they acquired experience in investigations of a single subject over time, not that their appointees were already academics or experts in a particular subject. This article also shows that appointments to these commissions did not demonstrate a desire for apolitical expertise. This is the first examination of all members appointed to the Interstate Commerce Commission, Federal Trade Commission, Federal Power Commission, Federal Communications Commission, and the Securities and Exchange Commission in the period from 1887 to 1935. This article finds that political and sectional balance, rather than previous expertise, were the most important criteria for these commissions’ members, at least until the late 1920s, after the end of the supposed Progressive Era.

The Novice Administrative State: The Function of Regulatory Commissions in the Progressive Era

Researchers have long argued that politicians created the modern administrative state in order to bring “experts” into government, and especially into the regulation of business. Yet Progressive-Era politicians themselves rarely discussed the need for experts in creating one form of administrative governance, the independent regulatory commission. By examining the contemporary understanding of regulatory commissions, this article shows that they were intended to act as fact-finding bodies for courts and to substitute for vacillating juries in particular cases. The commission’s most important advantage was that it acquired “experience” over time not that its appointees were already academics or experts in a particular field. This article also shows that the appointments to these commissions did not demonstrate a desire for apolitical expertise. It makes the first examination of all members appointed to the Interstate Commerce Commission, Federal Trade Commission, Federal Power Commission, Federal Communication Commission, and the Securities and Exchange Commission in the period from 1887 to 1935. It finds that political and sectional balance, rather than independent expertise, were the most important criteria for these commissions’ members, at least until the late 1920s, after the end of the supposed Progressive Era.

Okayama, Hiroshi. Judicializing the Administrative State: The Rise of the Independent Regulatory Commissions in the United States, 1883-1937 London and New York: Routledge Research in Public Administration and Public Policy, 2019. 187 pages.

Okayama, Hiroshi. Judicializing the Administrative State: The Rise of the Independent Regulatory Commissions in the United States, 1883-1937 London and New York: Routledge Research in Public Administration and Public Policy, 2019. 187 pages.

Features of Smart Grid Technologies: An Overview

This paper presents an overview of smart grid (SG) technology features such as two-way communication, advanced metering infrastructure (AMI) system, integration of renewable energy, advanced storage techniques, real time operation and control, data management and processing, physical and cyber security, and self-healing, etc. The SG technology allows twoway communications for better reliability, control, efficiency and economics of the power system. With these new SG technologies, consumers have many energy choices, such as use of renewable energy, usage management, flexible rates, electric vehicles (EVs), etc. The requirement of these technologies is the real time operation, and the SG accommodates this realtime operation and control. SG technology allows distributed generation through demand response and energy efficiency technologies to shed the load demand. However, it’s very difficult to adopt these changes to the conventional grids. Utility companies, governments, independent system operators (ISOs) and energy regulatory commissions need to agree on the scope and time frame of these changes.

Loyalty–Competence Trade‐offs for Top U.S. Federal Bureaucratic Leaders in the Administrative Presidency Era

We seek to characterize empirically the trade‐off between loyalty and competence that presidents make when appointing individuals to serve in U.S. federal agency leadership positions. These trade‐offs are analyzed from publicly available pre‐nomination information on 1,372 appointees within 39 major government organizations from the Carter through G. W. Bush presidencies. We find that loyalty–competence trade‐offs involving policy‐specific expertise are much stronger than those involving managerial skills. In addition, these loyalty–competence trade‐offs are more acute for top‐level bureaucratic leadership positions relative to subordinate counterparts, as well as for executive branch agencies relative to independent regulatory commissions. We also show that these loyalty–competence trade‐offs become stronger as presidents are less ideologically aligned with the policy activities of federal agencies, and during times of unified partisan control of the appointment process.

Pathways of Power: The Rise of Hill Staffers-Turned-Commissioners

The expression “personnel is policy” has become a truism in Washington. Yet our understanding of how the political branches use appointments to project influence into the administrative state is incomplete. This Article leverages data on almost one-thousand commissioners on eleven major independent regulatory commissions to chart, for the first time, Congress’s growing practice of placing former legislative-branch personnel onto these entities. We then theorize that this phenomenon is rooted in fundamental changes in American politics in recent decades—and, in turn, that it has deeply affected administrative law and separation-of-powers dynamics. During the past several decades, the number of commissioners with prior service as a lawmaker or congressional staffer increased almost fourfold. Paradoxically, this sea change occurred during a period in which, according to conventional wisdom, Congress’s influence over administration declined. We contend that, faced with a set of worsening pathologies in Congress, lawmakers turned to appointments to influence policymaking. At the same time, congressional atrophy and an increasingly rocky confirmation process combined to make executive posts more attractive to Hill staffers than to others. This influx of staffers-turned-commissioners has substantially altered the functioning of these commissions and their place in the separation-of-powers system. Congress’s ability to “embed” loyal former staffers on commissions can benefit both institutions. From their new positions, former staffers can both enhance congressional influence over administration and provide commissions with valuable insights into the views and priorities of the branch that writes their statutes, sets their budgets, and oversees their activities. Staffers-turned-commissioners also bring with them political savvy, familiarity with the legislative process, and other skills developed on Capitol Hill. Further, as former staffers—steeped in the norms of an increasingly dysfunctional Congress—fill more seats on commissions, these bodies may undergo a degree of acculturation, encouraging more overtly political behavior among commissioners. Our descriptive and theoretical accounts generate two prescriptions. First, in evaluating potential appointees, presidents and senators should be attuned not only to those individuals’ preferences and expertise, but also to their institutional allegiances and potential impact on organizational culture. Second, increased congressional influence over independent commissions justifies a degree of presidential oversight. If commissioners are political actors—grounded in the politics of their congressional principal and carriers of Congress’s culture—they should be subject to controls from both political branches.

The One and the Many: Bipartisan Leadership as Second-Best Bureaucracy

How should the Supreme Court resolve, in its forthcoming Seila Law decision on the permissibility of single-headed independent agencies, the split between en banc decisions in the Fifth Circuit and D.C. Circuit? Although the Court will likely (and I argue, correctly) extend its 2010 Free Enterprise Fund ruling to find the single director of the CFPB an unconstitutional intrusion into the President’s ability to “take Care that the Laws be faithfully executed,” it is of critical importance to the administrative state whether the Justices rule broadly to obviate Humphrey’s Executor or approach the independent agency question more incrementally. I urge the incremental approach in this Article. By developing a formal model of how structural features alone or combination affect presidential power, I demonstrate how the multi-member bipartisan leadership of the traditional independent regulatory agency could be less likely to “go rogue” against the elected executive, in comparison to a solitary agency head protected from removal. Plural commissions and boards can thus be distinguished constitutionally and preserved (along with Humphrey’s Executor) even if the CFPB Director falls in Seila Law. I also explore the implications of the independent regulatory agency’s other structural problem within formalist separation-of-powers jurisprudence, in that it takes on quasi-legislative regulatory functions originally vested with the legislature, in addition to its insulation from presidential control. If it can be shown that these two features help mitigate one another through the creation of a semi-autonomous structure resembling a legislature or “reverse parliament,” they become, if hardly unproblematic, at least less problematic. Taken singly, resolution of the constitutional tensions and anomalies created by either legislative delegation or commission independence would likely be sub-optimal from both a constitutional and administrative viewpoint, even if a committed originalist might prefer a return to a federal government with neither feature as the best of all possible worlds. I conclude the bureaucratic structure of the independent, plural, and bipartisan regulatory commissions – especially if reformed by aligning the statutory terms of chairs with the presidential cycle – may be a constitutional second-best to an unrecoverable Madisonian allocation of authority.

Statutory Separation of Energy Powers

The separation of powers forms the backbone of our constitutional democracy. But it is also a guiding principle in sub-constitutional domains. This Article argues that Congress constructs statutory schemes of separation, checks, and balances through its delegations to administrative agencies. This statutory separation of powers may be seen clearly in the simultaneous legislative creation of the independent Federal Energy Regulatory Commission (FERC) and the executive Department of Energy (DOE). Like its constitutional counterpart, the statutory separation of powers seeks to prevent the dominance of faction and create policy stability. But separating and balancing statutory authority is a delicate business subject to challenges of imprecise allocation, lopsided aggrandizement, and infrequent adjustment. The relationship between FERC and the DOE demonstrates these challenges, which have allowed the DOE to weaponize statutory checks and balances in its pursuit of policy dominance. The article concludes with recommendations for how Congress, the judiciary, and agencies themselves might mitigate these tendencies and preserve the statutory separation of powers as a meaningful safeguard against the perils of concentrated policymaking authority.

On the Difficulties of Generalization – PCAOB in the Footsteps of Myers, Humphrey’s Executor, Morrison and Freytag

The Supreme Court’s decision last June in Free Enterprise Fund v. Public Company Accounting Oversight Board is torn between general principle and particularity in considering important questions of separation of powers in American constitutional law – just as had been an earlier decision that, in some respects, it both repudiated and modeled, Freytag v. Commissioner. Indeed, the same problems live in two earlier cases that are staples of the administrative law and separation of powers repertoire, Myers v. United States and Humphrey’s Executor v. United States. The Supreme Court has a long history of reaching sensible results in its assessments of congressional choices about the structures of government, while having the deuce of a time explaining them. It has taken later developments to pick up the pieces. Its Free Enterprise Fund decision is only the most recent exhibit in this right-minded but inelegantly reasoned chain of opinions. The essay reviews the tensions between holding and explanation in the earlier cases, and then turns to the PCAOB decision. On the general question what the Constitution provides about the relationship between President and the Departments of executive government, in some respects matters are more settled than they had been at the beginning of the year. All nine Justices placed the independent regulatory commissions where they should be – not a “headless fourth branch,” but elements of the executive branch in a different – but necessary – oversight relationship with the President. The Supreme Court’s most important function, as Charles Black once remarked, lies in its validation of Congress’s choices, not the opposite. But the majority opinion strangely refuses to say, flat out, that its conclusion entailed a presidential right to demand “Opinions in writing” from the SEC – the one authority Article II of the Constitution explicitly gives the President over the acts of domestic agencies – even as its holding reasons from the necessity of effective presidential oversight of executive action. And it seems unwilling to choose between saying that Congress may not place a for-cause-protected institution within another for-cause-protected institution, an untroubling proposition, and saying that Congress may not give for-cause protection to any “inferior officer” serving in a for-cause-protected institution, an unsettling proposition. Can Congress not protect the Inspector General of the SEC in the same way as it protects the Inspector General of the Department of Justice? The Court’s approach to such issues would be greatly improved by pragmatic attention to reality and detail.

Congress's Agency Coordination

Coordination is a mechanism for administrative control. Indeed, it is well-known that the President and agencies themselves initiate it for a variety of substantive and self-interested reasons. This Article is the first to establish that Congress also creates frameworks of interagency coordination, and it bases this contention in the largest collection to date of statutes and legislative history detailing coordination requirements for federal agencies in several regulatory areas across the executive branch. By uncovering coordination legislation, which fosters an unexamined but pervasive relationship between Congress and agencies, this Article contributes to the fundamental debate regarding which political branch has sovereignty over the administrative state. Comprehensive analysis of this original legislative dataset illustrates that statute-based administrative coordination compels agencies to engage autonomously to more effectively further legislative priorities across the executive branch. This layered dynamic is evidenced by the main qualities of most coordination legislation: first, that it is both hierarchical and expansive, thus empowering agencies favored by Congress to structure coordination with significant discretion; and second, that it is mandatory, thus giving the legislature ultimate control over the implementation of statute-based interagency coordination. Coordination legislation may be driven by many of the same incentives that motivate the President’s initiation of administrative coordination, as well as some that are unique to the legislature, including the goal of limiting politicized executive influence on agencies’ implementation of the law. In general, the goals of statute-based coordination would benefit from the incubation of agency autonomy. Accordingly, this Article argues, coordination legislation empowers agencies to interact independently — that is, without direction from the President. For this reason, however, coordination legislation also challenges our expectations of executive hierarchy. More specifically, coordination legislation may muddy lines of executive accountability and imbue executive agencies with several qualities of independent regulatory commissions that increase their insulation from the Executive. Therefore, statute-based coordination has the potential to interfere with the President’s role as administrator-in-chief, unless it is circumscribed by executive oversight or, better still for legislative purposes, ex ante presidential involvement in interagency coordination.

Power sector reforms and energy efficiency initiatives: The Indian experience

ABSTRACTPower sector reform, which circumscribes independent regulatory commission, unbundling of the State Electricity Boards (SEBs), and eventual privatization, has been the dominant theme in the Indian economic policy discourse and power sector. In India, the power sector reforms were initiated in 1991 and began with the concurrence of the private investors in generation, and then centralized on the unbundling of vertically integrated utilities. In this paper, an attempt has been made to analyze the changing importance of energy conservation and efficiency measures been initiated in India between 1970 and 2013. The study also examines how far the reform process has been effective in realizing its set objectives and ameliorates the development of the power sector and the nation unrestrained. The paper briefly discusses the issue involved in the introduction of competition in the power sector primarily through the development of a market for bulk power, and a careful comparison of the costs and benefits of the old regulated system and the new deregulated system is made.

No vacancy: holdover capacity and the continued staffing of major commissions

AbstractAlthough the United States (US) federal bureaucracy is plagued by high vacancy rates generally, quorum requirements and small board sizes make vacancies particularly problematic within major independent regulatory commissions. Not all vacancies, however, are created equal. By statute, some major boards allow members to continue serving beyond their original term in the absence of a confirmed replacement. The difference between an empty seat and a holdover official is important as it can determine whether a board is functional or inoperable. In this article, we examine how the presence of holdover provisions within such commissions alters confirmation dynamics and vacancy rates. Evidence suggests that holdover provisions lead to quicker confirmation on nominations as well as fewer complete vacancies. Such structures thus help mitigate the short-term problems stemming from staffing independent regulatory boards, especially given the tendency towards obstruction in the US Senate.

Shortening Agency and Judicial Vacancies through Filibuster Reform? An Examination of Confirmation Rates and Delays from 1981 to 2014

This Article explores the failure of nominations and the delay in confirmation of successful nominations across recent administrations, with a focus on the November 2013 change to the Senate voting rules. Using a new database of all nonroutine civilian nominations from January 1981 to December 2014, there are several key findings. First, approximately one-quarter of submitted nominations between 1981 and 2014 were not confirmed, with a higher failure rate for the last two Presidents. Nominations to courts of appeals and independent regulatory commissions had much higher failure rates than other entities. Second, for confirmed nominations, the time to confirmation has been increasing. President Obama’s nominees faced confirmation delays that were more than twice as long as President Reagan’s choices. Failure rates of nominations did not always go hand-in-hand with confirmation delays for successful nominations. Although more nominations failed in divided government, confirmation delays were roughly equal when different parties controlled the Senate and the White House. Third, comparing the year after the change to the filibuster rules to the preceding year, confirmation times for the courts decreased but increased for all types of agencies. For many agencies and agency positions, however, significantly fewer nominations failed after the voting change. Even so, these improvements in 2014 — to the confirmation rates for both agency and judicial nominees and to the confirmation pace for judicial picks — are relative: for the average nomination, the failure rate was higher and the confirmation process was slower than under preceding administrations. Fourth, nearly 30 percent of nominees hailed from the District of Columbia, Maryland, and Virginia, raising concerns that the confirmation process may be narrowing the pool of top officials. This Article suggests some possible explanations for the findings and further avenues of investigation, and also proposes some reforms.

Does White House Regulatory Review Produce a Chilling Effect and “OIRA Avoidance” in the Agencies?

What effect does regulatory auditing by the Office of Information and Regulatory Affairs (OIRA) have on the production of regulations in the agencies? In particular, does targeting an agency for heavy regulatory auditing inhibit its production of regulations, a “chilling” effect? Does heavy auditing encourage it to substitute multiple small regulations in place of single large one, “OIRA avoidance”? We present an early empirical analysis of these questions by estimating regulation production functions for federal agencies, using data from the Unified Agenda from 1995 to 2010. We attempt to distinguish the differential effects of regulatory auditing from appointments into the agencies, leveraging off exogenous variation created by independent regulatory commissions. Our data uncover no evidence of a chilling effect in the production of economically significant regulations due to the Bush administration's regulatory auditing, relative to the Clinton or early Obama administrations. Nor do we find any evidence of OIRA avoidance. We do find some evidence that the Bush administration reduced the production of noneconomically significant regulations overall. However, the effect appears to be due to appointments in the agencies. Overall, the results raise questions about the efficacy of presidential efforts to control the regulatory state and how best to evaluate those efforts.

The Administrative Presidency, Unilateral Power, and the Unitary Executive Theory

This essay examines a major change that has occurred in recent years with regard to the relationship between the president and the bureaucracy. It is a change that relies on a greater use of the president's unilateral powers to influence the bureaucracy. It is based on a theory of presidential power that is striking in its scope and implications: the unitary executive theory. In many respects, the theory fundamentally changes the nature of presidential–bureaucratic relations, yet it has received scant attention in scholarly journals. Examination of its potential impact is long overdue.

Law in Action: The Attorney General's Committee on Administrative Procedure

The story of American political development in the twentieth century is in no small part the story of administration. Administrative agencies, bureaus, and departments tasked with handling the work of the federal government had been a feature of governance since the early republic. With the creation of the Interstate Commerce Commission in 1887, however, administrative agencies and independent regulatory commissions began to proliferate across the federal landscape. By the end of the massive expansion of federal power that characterized the New Deal, Americans very much experienced government through their interactions with bureaucrats and with administrative boards. Individuals and businesses claimed benefits from the Railroad Retirement Board and Veterans Administration, defended themselves against claims of unfair competition before the Federal Trade Commission, requested permits from the Federal Alcohol Administration and the Federal Communications Commission, and sought to resolve labor disputes before the National Labor Relations Board.

Administrative Commissions in Japan

Administrative agencies headed by board members (hereinafter called “administrative commissions”), such as the Fair Trade Commission, were introduced to Japan after World War II ended. The Headquarters of the Allied Army requested the Japanese Government to set up such commissions after the independent regulatory commissions in the United States. Administrative commissions were expected to play important roles within the new administrative organization that were taking shape at the time. In fact, at the beginning of the occupational period, many commissions were set up for the purpose of economic regulation just like in the United States. Such commissions included Fair Trade Commission, Public Utilities Commission, Radio Control Commission, and Securities Exchange Commission. After Japan had gained its independence, however, many of them were either abolished or reorganized into advisory panels in pursuit of downsizing the administrative organization. Out of the U.S.-influenced economic regulatory commissions, it is only the Fair Trade Commission that has survived the backlash.

Institutional Design versus Reputational Effects on Bureaucratic Performance: Evidence from U.S. Government Macroeconomic and Fiscal Projections

Institutional scholars often presume that the selection of a particular structural design necessarily shapes resulting policy outputs and outcomes. This phenomenon is an inherently political choice, yet we know little about its consequences regarding bureaucratic performance in a democracy. In this study, we examine whether the quality of agency outputs varies in relation to its institutional design. We empirically investigate this issue by examining the quality of current-year macroeconomic and fiscal projections generated by both presidential (Council of Economic Advisers and Office of Management and Budget) and congressional (Congressional Budget Office) support agencies, as well as an independent regulatory commission (Federal Reserve). Our statistical results uncover trivial cross-agency differences regarding bias and accuracy contained in this type of policy information. While varying degrees of political insulation might affect the durability of administrative agencies ex post, our empirical evidence rejects the politics of structural design thesis for short-termoriented policy analysis. Specifically, bureaucratic task outputs are generally unaffected in an ex ante fashion by the extent to which an agency’s institutional structure is insulated from political influence. Our empirical evidence suggests that these particular agencies’ concern with reputational considerations are fairly homogeneous and thus outweigh the varying political pressures that they confront attributable to the institutional structure that they operate under. Is a public bureau’s performance ‘‘hardwired’’ by the structural design choice made by politicians? The answer to this question is of utmost importance to those interested in the nexus between democratic accountability and the administrative state because it tells us not only whether politicians are able to exert control over specialized experts in the bureaucracy A previous version of this article was prepared for delivery at the 2003 Public Choice Society Meetings, Nashville, Tenn., March 21–23, 2003. We thank David Lewis, Florenz Plassman, and the anonymous JPART reviewers for helpful comments on earlier versions of this article. Address correspondence to George A. Krause at george.krause@sc.edu. doi:10.1093/jopart/mui038 Advance Access publication on March 2, 2005 a The Author 2005. Published by Oxford University Press on behalf of the Journal of Public Administration Research and Theory, Inc. All rights reserved. For permissions, please e-mail: journals.permissions@oupjournals.org. JPART 15:281–306

IRCs versus DRAs: Budgetary Support for Economic and Social Regulation

This article examines whether Independent Regulatory Commissions (IRCs) received less budgetary support than executive branch Dependent Regulatory Agencies (DRAs) between the late 1970s and 2000. It also examines whether there were political differences in spending priorities between social and economic regulation. The principal‐agent theory was used to explain why IRCs do not fare as well compared to DRAs in terms of budgetary support. The findings indicate that IRCs received less funding than DRAs in the social regulation field, supporting the principal‐agent model of budgetary decision making. Political impacts were prevalent in all areas of regulation spending.

American Regulatory Policy: Factors Affecting Trends Over the Past Century

This article examines American regulatory policy over the past century and the factors that have affected its development. Among the trends analyzed are the movement away from independent regulatory commissions, the larger role played by the institutional presidency vis‐a‐vis the Congress in the regulatory arena, and the growing resistance of states and localities to national government regulation and “unfunded mandates.”