Legislative Allocation of Delegated Power: Uncertainty, Risk, and the Choice between Agencies and Courts
Stephenson, Matthew C., Harvard Law Review
TABLE OF CONTENTS I. THE PUZZLE AND THE EXTANT LITERATURE II. FORMAL ANALYSIS A. The Model 1049 B. Comparative Statics III. DISCUSSION 1057 A. The Nature of the Policy Problem and the Statutory Response B. Incentives of Legislators and Their Constituents C. Characteristics of Judicial Statutory Interpretation D. Characteristics of Agency Statutory Interpretation E. Judicial Review of Agency Decisions 1069 CONCLUSION
When a legislature delegates the authority to interpret and implement a general statutory scheme, the legislature must choose the institution to which it will delegate this power. Perhaps the most basic decision a legislature makes in this regard is whether to delegate primary interpretive authority to an administrative agency or to the judiciary. Understanding the conditions under which a rational legislator would prefer delegation to agencies rather than courts, and vice versa, has important implications for both the positive study of legislative behavior and the normative evaluation of legal doctrine; the factors that influence this choice, however, are not well understood. This Article addresses this issue by formally modeling the decision calculus of a rational, risk-averse legislator who must choose between delegation to an agency and delegation to a court. The model emphasizes an institutional difference between agencies and courts that the extant literature has generally neglected: agency decisions tend to be ideologically consistent across issues but variable over time, while court decisions tend to be ideologically heterogeneous across issues but stable over time. For the legislator, then, delegation to agencies purchases intertemporal risk diversification and interissue consistency at the price of intertemporal inconsistency and a lack of risk diversification across issues, while delegation to courts involves the opposite tradeoff. From this basic insight, the model derives comparative predictions regarding the conditions under which rational legislators would prefer delegating to agencies or to courts.
The question, "Why do legislators delegate?" and the closely related question, "Why do legislators draft ambiguous statutes?" are the subject of a rich literature. Suggested explanations include the need to leave technical questions to experts, (1) politicians' desire to duck blame for unpopular choices (2) or to create new opportunities for constituency service, (3) the inability of multimember legislatures to reach stable consensus, (4) and the impossibility (or excessive cost) of anticipating and resolving all relevant implementation issues in advance. (5) Whatever the reason for delegation, the end result is that legislators who choose to delegate--whether explicitly or via statutory ambiguity--cannot predict with certainty how the decisionmaker charged with implementation will interpret the statute they enact. Such legislators have therefore entered what is sometimes referred to as a policy "lottery." (6)
This Article addresses a closely related but distinct question: given that legislators have an interest in delegation, to whom do they prefer to delegate? After all, even legislators who decide to enter a policy lottery still have some ability to determine which policy lottery they enter by specifying which decisionmaker has primary authority to interpret the statute's commands. Perhaps the most basic decision a legislator may make in this regard is whether to delegate to an administrative agency or to the judiciary. The conditions under which a rational legislator would prefer delegation to agencies rather than courts has important implications for both the positive study of legislative behavior and the normative evaluation of legal doctrine. The factors that influence this choice, however, are not well understood.
In this Article, I consider a subset of the factors that might influence whether a rational legislator would prefer to delegate the authority to interpret an ambiguous statute to an administrative agency or to a court. …