Managing Delegation Ex Ante: Using Law to Steer Administrative Agencies

Abstract

This work addresses the question of how, and how effectively, elected politicians can exert ex ante influence over the policy choices of regulatory agencies. In order to test the hypothesis that politicians can use choices about the agency's structure and process to influence subsequent agency decisions, I analyze statistically two sets of decisions made by the Federal Energy Regulatory Commission ("FERC") in its hydroelectric licensing program during the 1960-90 time period. I find, among other things, that: (1) some (but not all) of the tools of ex ante political control were used to effect noticeable changes in the content of FERC decisions over time; (2) among the so-called "structural controls," those that were designed to influence agency preferences appear to have exerted the most significant and lasting effects; (3) among the so-called "procedural controls," those that were designed to increase the transaction costs of making particular decisions appear to have been more effective than those that merely increased the transaction costs of decision making generally; and (4) despite these effects, the FERC appears to have resisted political control, sometimes successfully, during the study period.

JEL Classification: K23