Agenda Control under Policy Uncertainty

The forthcoming article “Agenda Control under Policy Uncertainty” by Steven Callander and Nolan McCarty is summarized by the authors below.

Agenda control is a central concept in the study of policymaking. As scholars have long pointed out, the ability to define the set of alternatives is an important source of power and influence. In their canonical work, Thomas Romer and Howard Rosenthal formalize key implications of agenda control. They model agenda control, is its barest form: a single agenda setter (or proposer) may offer a take-it-o-leave offer to a single voter to change the existing status quo policy. The model makes three predictions that have become conventional wisdom about agenda setting. First, policy change occurs if and only if it begins outside the classic gridlock interval bounded by the legislators’ ideal points. Second, the proposer is able to generate better policy outcomes for herself when the status quo is extreme. Third, the voter is worse off when the status quo is bad but that her downside utility is bounded.

While these predictions have been central to theoretical and empirical work on legislatures, courts, and voter referenda, the underlying model is based on strong assumptions about the proposer’s and voter’s information about the consequences of different policy alternatives. In our paper we relax those assumptions to analyze agenda setting in the context of policy uncertainty. When there is policy uncertainty, the players no longer know for sure which outcomes will be obtained from a given policy.

We show that all three of Romer and Rosenthal’s lessons are fundamentally altered with policy uncertainty. Policy uncertainty alters agenda setting power because it adds risk to the outcome. In trying to change an outcome for the better, a policy change may undershoot, overshoot, or even move in the opposite to the intended direction. This risk tempers the willingness to change. Thus, an outcome that both legislators prefer is not sufficient to induce policy change and the famous gridlock interval of legislative politics is widened. The risk also tempers the proposer’s power, meaning she has less leverage in a world of certainty and that the benefit of change is lower. We show that, in contrast to Romer and Rosenthal, that the Proposer’s power is maximized at an intermediate level of leverage. Bounding the proposer’s power does not benefit the voter as policy uncertainty afflicts all legislators, and his utility is no longer bounded below as it is in Romer and Rosenthal.

These predictions alter the classic intuition of Romer and Rosenthal, yet they match more closely Clinton’s (2012) finding on Congressional voting over changes to minimum wage laws – an area where there is substantial debate and disagreement over the consequences of policy changes.

We extend our model to two periods of policymaking. In a world of policy certainty, future periods are uninteresting as once a policy is in the gridlock interval, it cannot leave. With policy uncertainty, however, attempts to move policy into the gridlock interval may fail, leading to subsequent applications of agenda power. We show that this leads to rich policy dynamics as legislators bargain, reevaluate, and strike new deals. Strikingly, however, we find that the proposer’s ability to reapply her agenda control each period means that policy bargains with a long horizon converge on those in a one-shot environment.

About the Authors: Steven Callander is a Professor of Political Economy at Stanford University and Nolan McCarty is a Professor of Politics and Public Affairs at Princeton University. Their research “Agenda Control under Policy Uncertainty” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.