Bounded Evaluation: Cognition, Incoherence, and Regulatory Policy

By Coglianese, Cary | Stanford Law Review, June 2002 | Go to article overview

Bounded Evaluation: Cognition, Incoherence, and Regulatory Policy


Coglianese, Cary, Stanford Law Review


To many observers, the words "predictably incoherent" describe well the fragmented network of rules and regulatory institutions that has grown up in the United States over the last century. (1) Hundreds of federal agencies collectively publish thousands of new regulations each year. (2) Federal responsibility for food safety rests in a dozen different regulatory agencies, operating under at least thirty-five different statutes. (3) At least eight major agencies are charged with responsibility for reducing the risk of exposure to hazardous substances under more than two dozen statutes, each with their own structure and standards. (4) Congress has created more than 200 committees and subcommittees, many of which oversee the development of regulatory policy. (5) By some estimates, the U.S. Environmental Protection Agency has had as many as ninety congressional committees and subcommittees overseeing its work. (6)

Regulatory agencies not only report to Congress, but also find themselves repeatedly wrangling with a variety of other actors and institutions, including the Office of Management and Budget, the White House, the courts, and the media. (7) Internally, these same regulatory agencies are divided across program areas and by professional specialization. Moreover, the internal and external fragmentation of policy authority plays itself out at the level of state and local governments, which interact with the federal government and add another layer of complexity to the making and implementation of regulatory policy. Given the extensive fragmentation of policymaking authority, it should come as no surprise that regulation in the United States appears so complex and incoherent.

In their article, Predictably Incoherent Judgments, Cass Sunstein, Daniel Kahneman, David Schkade, and Ilana Ritov advance a cognitive explanation for incoherence in government regulation. (8) They argue that decisionmakers tend to think within narrowly-conceived categories and have difficulty translating their normative judgments into concrete terms, such as dollar amounts. (9) Both of these factors, they suggest, result in patterns of micro-level judgments that make little sense when hewed from a macro-level perspective across different categories. They argue that decisions that seem sensible when viewed in isolation, or within a single category, result in patterns that are globally inconsistent or suboptimal.

Sunstein et al. rightly call attention to the effects of cognition on regulatory policymaking, and especially to problems associated with narrow, ad hoc decisionmaking. In this essay, I argue that the effects of cognitive limitations are probably even more pronounced than Sunstein et al.'s article suggests. They argue that cognitive tendencies such as category-bound thinking lead to incoherent regulatory policies, but I will argue that, in addition, these same kinds of cognitive constraints can affect judgments about incoherence itself. If people have a tendency to focus on one category at a time in making judgments, then evaluations that judge different policies to be incoherent will tend to be bounded as well. Consequently, it will be still more difficult than Sunstein et al.'s article seems to imply to design and evaluate institutional reforms to reduce incoherence in regulatory policy.

In the following pages, I first introduce a tension between what I refer to as instrumental and comparative coherence, arguing that variation in policies that appears to make little sense when policies are compared with each other may be quite sensible for instrumental reasons. I then examine Sunstein et al.'s claim to have discovered striking incoherence in the penalty levels across regulatory statutes. I argue that when considered from a broader perspective the apparently obvious incoherence in some of these penalty levels is not nearly as obvious as it first seems. …

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