EXPANDING THE LIMITS OF POWER: The Federal Reserve and the Implementation of Functional Regulation in the Gramm-Leach-Bliley Era

Research on bureaucratic behavior suggests that agencies are more likely to use the implementation process to extend their power and influence under particular circumstances. I argue that when an agency has been delegated considerable power by Congress, but provided only vague guidance on how to implement this authority, an atmosphere of uncertainty and competition is created. Under such a circumstance the agency will feel pressured to further extend its power in order to defend its regulatory turf against competitors and protect the authority it was delegated. I test this proposition by examining the behavior of the Federal Reserve as it implements the functional regulation provisions of the Gramm‐Leach‐Bliley Act. Evidence from the Federal Reserve's dealings with the Securities and Exchange Commission during the approval of the Schwab – U. S. Trust merger provides evidence that the Fed is indeed acting to extend its power and influence.     

BLM,the Administrative Presidency,and Policy Shifts: Policy Tools Affecting Oil and Gas Operations

This paper addresses change in oil and gas policies pushed by the U.S. Bureau of Land Management (BLM) during the administrations of Presidents George W. Bush and Barack Obama. Administrative policy changes occurred not only because of election outcomes and the emergence of new governing coalitions but BLM's selective utilization of policy tools such as rulemaking, planning, environmental impact analyses, and the use of discretionary authority to increase or relax enforcement decisions. The data reveal that BLM put more emphasis on the use of discretionary authority to limit environmental inspections and to limit environmental reviews of proposed drilling projects under Bush while agency officials gave priority to adopting new planning procedures to allow greater stakeholder input under Obama as well as increasing the number of environmental inspections.     

Emerging technologies and problem definition uncertainty: The case of cybersecurity

For governments to regulate, they must first define the problem and decide which policymakers have the authority to make decisions. Technological development can disrupt the authority-allocation process by fostering uncertainty about which actors are responsible for making policy. This article examines the role that changing technology has played in the development of cybersecurity policy in the United States. New technologies have increased the type and scope of assets vulnerable to cyberthreats, and with them the number of governing units who can claim jurisdiction over cybersecurity-related issues. Uncertainty about the nature of the problem has led the U.S. Congress to rely heavily on bureaucratic witnesses and focus on how existing regulations can be brought to bear. Emerging technologies create regulatory challenges for governance not only through unforeseen consequences but through uncertainty over who can regulate. Fragmented authority can produce piecemeal responses and a reliance on existing frameworks that benefit regulated industries.     

Setting the Regulatory Agenda: Statutory Deadlines,Delay, and Responsiveness

Congress imposes statutory deadlines in an attempt to influence agency regulatory agendas, but agencies regularly fail to meet them. What explains agency responsiveness to statutory deadlines? Taking a transaction cost politics approach, the authors develop a theory of responsiveness to deadlines centered on political feasibility to explain how agency managers map rulemaking onto calendar and political time. This theory is tested on all unique rules with statutory deadlines published in the Unified Agenda of Federal Regulatory and Deregulatory Actions between 1995 and 2012. The argument and findings about the timing and ultimate promulgation of rules have implications that reorient the study of the regulatory agenda from legal and political into more managerial terms.     

Policymaking with Multiple Agencies

Authority over related policy issues is often dispersed among multiple government agencies. In this article, I study when Congress should delegate to multiple agencies, and how shared regulatory space complicates agency decision making. To do so, I develop a formal model of decentralized policymaking with two agencies that incorporates information acquisition and information sharing, delineating situations where legislators should and should not prefer multiple agencies. Greater divergence between the agencies' ideal points distorts information sharing and policy choices, but it may increase the amount of information acquisition. Congress achieves better policy outcomes by delegating authority to both agencies if the agencies have strong policy disagreements. If the agencies have similar policy preferences, however, then Congress may want to consolidate authority within one agency because this approach mitigates free-riding and takes advantage of returns to scale.     

Deregulation as regulatory reform: the case of environmental policy in the Netherlands

Abstract. Deregulation in the Netherlands has been associated with the perceived crisis of the welfare state. But in the area of environmental policy it has not meant dismantling those substantive regulations designed to promote improved environmental quality. Deregulation in environmental management has involved the retention of overall regulatory objectives while striving to simplify and streamline existing regulatory procedures, and developing alternatives to the more traditional instruments of regulation. Deregulation in this area is a prime example of 're-regulation'- of steps taken to make existing regulations more effective, or to replace rules with other instruments designed to achieve more effectively and efficiently the same behavioural changes sought with the original regulatory scheme.     

Trust but verify? Voluntary regulation programs in the nonprofit sector

In this article we examine how information problems can cause agency slippages and lead to governance failures in nonprofit organizations. Drawing on the principal–agent literature, we provide a theoretical account of an institutional mechanism, namely, voluntary regulation programs, to mitigate such slippages. These programs seek to impose obligations on their participants regarding internal governance and use of resources. By joining these programs, nonprofit organizations seek to differentiate themselves from nonparticipants and signal to their principals that they are deploying resources as per the organizational mandate. If principals are assured that agency slippages are lower in program participants, they might be more likely to provide the participants with resources to deliver goods and services to their target populations. However, regulatory programs for nonprofit organizations are of variable quality and, in some cases, could be designed to obscure rather than reveal information. We outline an analytical framework to differentiate the credible clubs from the “charity washes.” A focus on the institutional architecture of these programs can help to predict their efficacy in reducing agency problems.     

马克思主义权力观下建构防止利益冲突制度

腐败发生的重要根源在于公职人员的利益冲突,利益冲突的重要根源在于公职人员权力观的错位。树立“权为民所赋,权为民所用”的马克思主义权力观,从制度层面上规范和监督公共权力的运行过程,通过合理的制度安排使公共权力与私人利益相分离,从而阻断公职人员以权谋私的通道,最终达到预防腐败的目的。     

From developmental to regulatory state? Japan's new financial regulatory system

Abstract

Recent financial reforms in Japan and elsewhere in Asia represent, for various authors, a fundamental shift in financial governance and in state–business relations in the region. The old ‘developmental’ state in East Asia has supposedly made way for a neoliberal ‘regulatory’ state, with its emphases on agency independence and the non-discretionary enforcement of rules. I show in this paper that this interpretation exaggerates the extent of the transformation in the important case of Japan. Although the outward institutional forms of economic governance in Japan, as with many Asian developing countries, has changed dramatically since the mid-1990s, discretion still remains at the core of economic and financial policy. In the area of Japanese banking regulation and supervision, I show how this highly discretionary application and enforcement has been consistent with domestic political pressures. The result is a substantial divergence between superficial convergence upon international regulatory standards and underlying behaviour. I also give reasons why globalization does not mean that this hybrid regulatory model is unsustainable.     

Enhancing responsiveness and consistency: Comparing the collective use of discretion and discretionary room at inspectorates in England and the Netherlands

Discretion used to be considered a feature of individuals, but growing literature shows that it has collective features as well. To develop an understanding of the individual and cooperative work of inspectors in using discretion and the discretionary room granted to them, we compared two inspectorates: the Care Quality Commission (CQC) in England and the Joint Inspectorate for Youth (JIY) in the Netherlands. Our analysis reveals that inspectors engage with colleagues, managers, and stakeholders to include other perspectives, gain mandate, and broaden their repertoire. At the CQC, inspectors use their discretion collectively; on their own initiative, they involve others in balancing and interpreting rules to reach judgments. At the JIY, teamwork is central and regulatory teams are granted collective discretionary room. We argue that collective work permits both responsiveness and consistency. In studying the judgments of inspectors and other street‐level bureaucrats, it is vital to look at collective work and how it combines consistency and responsiveness.     

Conjoint Federalism and Environmental Regulation in the United States

Many of the environmental laws enacted by Congress employ adistinctive blend of national and state authority. In theseconjoint arrangements, state authority is not totally preempted,but it is subordinated to national authority if states wishto participate in environmental regulation. Under normal circumstances,national and state authority are deployed concurrently in pursuitof environmental policy objectives. Conjoint arrangements aremuch more controlling of state action than the stimulative andfacilitative approach to intergovernmental program implementationcommonly associated with cooperative federalism. Despite nationalprimacy, in the bargaining that marks implementation processes,state officials may enjoy considerable influence. Although administrativelycumbersome and criticized from a variety of perspectives, conjointarrangements are not the major reasons for a slow rate of improvementin environmental quality. When the various options are considered,there are reasons to conclude that conjoint arrangements arethe most realistic means for attacking environmental problems,although questions remain about the appropriate balance of nationaland state authority in them.     

The possibility of cooperation in an n-person prisoners' dilemma with institutional arrangements

We investigate how cooperation is possible among self-interested individuals in an n-person prisoners' dilemma from the viewpoint of institutional arrangements. Assuming that individuals create by their free consent an institutional order to enforce an agreement of cooperation, we present a noncooperative game model in which individuals have negotiations for creating an enforcement agency and also for cooperation in advance of taking actual actions. The noncooperative solution of our institutional arrangement game shows that the probability of each individual participating in negotiations monotonically decreases and converges to zero as the number of individuals becomes larger and larger. Our noncooperative game model for institutional arrangements is applied to an environmental pollution problem and some numerical results are given.The research for this paper was started when I stayed at ZiF, University of Bielefeld, in 1987–88 to participate in the Research Project Game Theory in the Behavioral Sciences. Financial support and warm hospitality from ZiF is gratefully acknowledged. I am grateful to Hartmut Kliemt, Elinor Ostrom, James Rhodes and Koichi Suga for their very helpful suggestions and discussions. Of course, any remaining errors are of mine. Financial support by the Murata Science Foundation is gratefully acknowledged.     

Social and institutional challenges in species and ecosystem conservation: an appraisal of the U.S. Marine Mammal Commission

In the pantheon of U.S. environmental law, only one federal statute—the Marine Mammal Protection Act of 1972—has created an independent oversight agency with explicit authority to conduct appraisals of and make recommendations on all regulatory agency actions under the law. That agency, the U.S. Marine Mammal Commission, is the subject of our analysis. Using a semi-structured survey and participant observation, we assess the commission’s operations under its legislative mandate, using criteria from the literature on policy-oriented professionalism. Our findings indicate a dichotomy between the Commission’s oversight of other agencies’ marine mammal programs and the manner in which it self-evaluates, learns, and evolves on the basis of its experience, with strongly pragmatic approaches to its appraisal of other agencies’ programs, contrasted with weak appraisal of its own operations.     

Comparing federal institutions: Power and representation in six federations

The study of comparative federalism is often hampered by the diverse range of federal institutional arrangements in practice, as well as the ambiguity surrounding the concept of federalism. This article identifies three main conceptual approaches to federalism – sociological, constitutional, and governmental – then proposes a revised governmental approach that takes account of the institutional effects of federalism, for application in comparative politics research. Minimally defined, all federations are products of institutional rules that create separate territorial spheres of authority. This article compares Canada, the United States, Australia, Austria, Germany and Switzerland along two key institutional dimensions that structure politics in the federal state: resource allocation, and the representation of constituent units in federal-level decision-making.     

Congress, the Deficit, and Budget Reconciliation

President Clinton's veto of the 1995 reconciliation bill, the largest and most ambitious such legislation ever passed by Congress, was the first time a reconciliation bill was ever rejected by a president. It was also the first reconciliation bill in two decades to include a tax reduction rather than a tax increase. The fate of this bill, and its scope and contents, suggest the need to assess the evolution of reconciliation within the congressional budget process. In the early 1980s, Congress altered budget reconciliation procedures, putting in place a powerful new capability for deficit reduction. Reconciliation became the primary means within the budget process of restraining entitlement spending and increasing taxes as part of congressional efforts to reduce the deficit. Gramm-Rudman-Hollings magnified certain problems Congress encountered in using reconciliation to control entitlements, producing increased pressure to cut discretionary spending. While the Budget Enforcement Act of 1990 included new authority to use reconciliation to restrain entitlements, congressional spending priorities combined with the Peace Dividend to maintain the relative sanctuary entitlement programs have enjoyed. The limits of reconciliation as a deficit reduction tool, both in terms of increasing revenues and curtailing entitlements, are detailed. The inherent procedural advantages accorded to entitlements are contrasted with the treatment of discretionary programs, explaining in part the widening gulf between these two categories of spending. Congress has attempted, without success, to find alternatives to reconciliation. The failure of the seven-year, deficit-eliminating reconciliation bill of 1995 may indicate that certain Limits on the use of reconciliation may have been reached.     

Federal Reimbursement for Mandates on State and Local Governments

One of the remedies sought by state and local officials for the growing burden of federal mandates is a mandate reimbursement law. A major purpose of mandate reimbursement is to deter Congress from imposing excessive costs on state and local governments by making it fully accountable for its actions. The paper begins by extending the economic theory of grants to mandates and reimbursed mandates. It goes on to assess the benefits and costs of mandate reimbursement, and to distinguish mandates that should be reimbursed, should a reimbursement program prove desirable, from those that should not. Then, using the economic theory of grants and mandates, the paper compares reimbursed mandates with two alternatives for accomplishing the same objective, compensating grants and procedural rules. It concludes that the latter are more promising than mandate reimbursement.     

Steering Agencies with Short-Term Authorizations

After World War II, the U.S. Congress began a process of engaging in what David Rosenbloom refers to as Congress-centered public administration. In this article, the author argues that the use of short-term authorizations by Congress facilitates congressional oversight and co-management of public programs. Using data from three case studies, the author shows that Congress is able to systematically, on a regularized basis, shape the overall goals, structures, and decision rules that govern agency activities. It can also promote research and analysis that will inform the reauthorization of a program by funding studies and requiring specific reports to be produced. The agencies are, in turn, able to implement the new legislative requirements over a given timeframe—typically four to six years—and do so in an environment that is relatively free from other congressional changes to the legislation underlying the program in question. During this time, the agency and Congress are able to determine what works and what does not work and to formulate changes that should be considered in the next reauthorization legislation.     

Regulation as a political question

There are at least two frameworks within which the debate on proper institutional arrangements for regulation can be carried out. One rests on seeing the various possibilities as instruments and its central concern is with the most efficient means for achieving regulatory objectives. The second framework views regulation as an essentially political act. It focuses on adapting our choice of institutional alternatives to take account of valued features of our existing political world. It also involves an understanding of how our choice of institutional alternatives actively shapes that world and thus helps to form our regime or the way of life to which we aspire. These two frameworks are examined with special attention being given to the political view.     

Policy Attitudes in Institutional Context: Rules,Uncertainty, and the Mass Politics of Public Investment

This article examines the link between citizens’ policy attitudes and the institutional context in which policies are carried out. The article develops a theory of opinion formation toward policies that impose costs on citizens in order to invest in broadly valued social goods. In this framework, problems of agency loss and time inconsistency leave citizens uncertain about whether promised policy benefits will be delivered. Citizen support for public investments thus depends on whether the institutional context makes elites’ policy promises credible. We consider hypotheses about how the institutional allocation of authority and the institutional rules governing implementation affect citizen support for public investment, and we find broad support for the framework in three survey experiments administered to representative samples of U.S. citizens. The results shed light on the link between political institutions and citizens’ attitudes, the capacities of voters for substantive political reasoning, and the political prospects for public investment.     

Comparing Competing Theories on the Causes of Mandate Perceptions

The discussion of presidential mandates is as certain as a presidential election itself. Journalists inevitably discuss whether the president-elect has a popular mandate. Because they see elections as too complex to allow the public to send a unitary signal, political scientists are more skeptical of mandates. Mandates, however, have received new attention by scholars asking whether perceptions of mandate arise and lead representatives to act as if voters sent a policy directive. Two explanations have emerged to account for why elected officials might react to such perceptions. One focuses on the president's strategic decision to declare a mandate, the second on how members of Congress read signals of changing preferences in the electorate from their own election results. We test these competing views to see which more accurately explains how members of Congress act in support of a perceived mandate. The results indicate that members respond more to messages about changing preferences than to the president's mandate declaration .