Policymaking with Multiple Agencies

The forthcoming article “Policymaking with Multiple Agencies” (https://doi.org/10.1111/ajps.12474) by Peter Bils is summarized by the author(s) below.
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Congress often delegates policymaking authority on similar issues to multiple government agencies. For example, financial products are regulated by both the Securities and Exchange Commission and the Commodity Futures Trading Commission. Given this overlap, it is regularly proposed that authority should be consolidated into just one of the agencies. In this paper, I study when Congress should delegate to multiple agencies or consolidate authority within one agency.

For many policy issues that feature split authority effective regulation requires agencies to have detailed technical information. Furthermore, information relevant to one agency is often relevant to the other agency as well.  However, as agencies frequently have different policy preferences  it is important to understand how delegating to multiple agencies affects incentives to gather and communicate information. To study this problem, I analyze a game-theoretic model of policymaking with two bureaucratic agencies and Congressional delegation. In the model, Congress can consolidate authority within one agency or split authority between two agencies. To develop policy, agencies expend resources acquiring information that is relevant to both issues. Furthermore, if authority is split then the agencies may choose to share information with each other.

I show that greater divergence between the agencies’ ideal points distorts information sharing and policy choices, but may increase the amount of information acquisition. Congress achieves better policy outcomes by delegating authority to both agencies when the agencies have strong policy disagreements. If the agencies have similar policy preferences, however, then Congress may want to consolidate authority within one agency. This mitigates free-riding and takes advantage of returns to scale.

About the Author: Peter Bils is a Postdoctoral Research Assistant in the Department of Politics at Princeton University. The research “Policymaking with Multiple Agencies” (https://doi.org/10.1111/ajps.12474) is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

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The American Journal of Political Science (AJPS) is the flagship journal of the Midwest Political Science Association and is published by Wiley.

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