"Congressional Dominance": A Closer Look
Barry R. Weingast and Mark J. Moran30 noted the angry congressional reaction to what members described as the "runaway" FTC decision to regulate television advertising aimed at children, issue tough rules governing the used-car and undertaker businesses (among others), and break up the alleged monopoly power of the big cereal manufacturers and oil companies. Many academic observers accepted the politicians' explanation for the controversy: The FTC had used its wide discretion to make policy without regard to congressional preferences. This happened because Congress, though it has powerful weapons for controlling agency behavior, rarely uses them; congressional oversight of bureaucratic behavior is either perfunctory or episodic.
Weingast and Moran suggested a different interpretation, namely, that the FTC all along pursued the interests of the congressional oversight committees (the subcommittee on consumer affairs of the Senate Commerce Committee and the equivalent subcommittee of the House Committee on Energy and Commerce). During the early 1970s these committees wanted an activist, antibusiness FTC, and that is what they got. In the late 1970s these committees wanted a less activist, more probusiness FTC and (in time) this is what they got. The public fuss occurred because the FTC was unable to reverse its policy directions as quickly as the congressional committees wanted, and so for a year or so it got blasted as a "runaway" agency. But soon it was once again in full compliance with committee views.
To prove this claim, Weingast and Moran divided FTC cases into two kinds: "traditional" (or trivial) cases, such as those involving claims that a firm violated laws governing how fur, wool, and textiles should be labeled; and "activist" (or important) cases, such as those entailing the enforcement of the Truth-in-Lending or Fair Credit Reporting Act. They then showed that there was a statistical association between the frequency of these two kinds of cases and the liberalism of the members of the House and Senate oversight committees. In particular, as the oversight subcommittee members became more liberal (as measured by the scores they received from Americans for Democratic Action, a liberal interest group), the FTC commissioners began hearing more "activist" cases and fewer "traditional" ones. This happened during the late 1960s and early 1970s. As the oversight subcommittees (especially the one in the Senate) became less liberal, the FTC reduced the number of activist cases and increased the number of traditional ones. This occurred in the late 1970s as a result of an almost complete turnover in the membership of that subcommittee. The public furor and the attendant charges that the FTC was out of control were heard during the brief period that the agency was shifting gears.
This analysis has been criticized at length by others; only its central problems need be mentioned here. First, the data on which Weingast and Moran rely does not support their prediction that as Congress became more conservative in the late 1970s the FTC would shift toward more traditional, less activist cases.31 Second, the congressional dominance theory would predict that the FTC would reject