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Weingast and Moran: Bureaucratic discretion or Congressional control

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Understanding
Bureaucracy

Weingast and Moran. 1983. Bureaucratic discretion or Congressional control. Journal of Political Economy.

Main point:

Congress, especially its subcommittees, exercises systematic control over the bureaucracy. This is illustrated by the experience of the FTC in the 1970s.

Place in the Literature

  • Stands with: Congressional dominance (but uses a different approach than Stigler 1971 and Peltzman 1976; see Moe 1987a for a comparison of the two approaches).
  • Stands against:
    1. Independent bureaucracy approach (Wilson 1975, 1980; Dodd and Schott 1979) holds that the bureaucracy acts largely according to its own dictates. Arnold 1979 may also be interpreted in this tradition.
    2. Presidential influence: Moe's arguments.
  • Major critique: Moe (1987b) trashed this piece. The FTC underwent a major reorganization following a presidential initiative, not from Congressional influence. W&M completely ignore what was going on inside the bureaucracy. They assume, rather than prove, Congress controls the bureaucracy, then find spurious evidence as a result of an underspecified model.

Argument

W&M argue that, because of the law of anticipated reactions, an independent bureaucracy and a congressionally dominated bureaucracy are usually observationally equivalent. Lack of congressional oversight hearings does not necessarily imply an independent bureaucracy.

W&M point to three factors that allow congress to exercise control: 1) the budgetary process, 2) threat of active oversight, and 3) control over appointments and reappointments.

Because of the reelection incentive, Congress organizes itself into committees with near-monopoly jurisdiction over a small set of policy issues. Then members self-select onto their most important committees. Thus, the subcommittee's preferences, especially those of the chair, are more important than the overall floor preference.

Evidence: The FTC

The FTC was not a very active agency until the 1970s, when it took on an increasingly large number of high-profile and economically important cases. In 1979-81, Congress acted to reign in the FTC's actions.

W&M argue that the FTC was acting according to [Senate] subcommittee preferences all along. There was an almost total turnover in committee membership in 1977. The subcommittee went from being very activist (as measured by ADA scores) to very conservative.

W&M investigate whether the FTC investigated the kinds of cases that subcommittee members preferred in the 1964-1976 period using a logit (loglinear) model. Their empirics had some serious problems, so they redid this entire piece in Calvert, Moran, and Weingast (1986).