Faculty Bibliography

Although administrative law doctrine requires courts to defer to an agency's reasonable statutory interpretation, the doctrine is unclear as to whether an agency gets less deference when it changes its own prior interpretation. We formally analyze how judicial deference to revised agency interpretations affects those interpretations' ideological content. We find a non-monotonic relationship between judicial deference to inconsistent agency interpretations and interpretive extremism. This arises because as courts become less deferential to revised interpretations, the initial agency finds a moderate interpretation that will not be revised more appealing. Normatively, our results suggest that an interest in responsiveness of interpretive policy to the preferences of the incumbent leadership favors deference to revised interpretations, while an interest in ideological moderation favors a somewhat less deferential posture to interpretive revisions.

In carrying out their duties, federal administrative agencies must often interpret statutes and regulations that are not entirely clear. Sometimes an agency’s interpretation of an ambiguous legal text may not seem like the best or most natural interpretation of that text. Nonetheless, a staple of modern federal administrative law doctrine is the principle of judicial deference to administrative interpretations of both congressional statutes and agency regulations. The seminal case on judicial deference to reasonable agency statutory interpretations is, of course, Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. In the context of administrative interpretations of the agency’s own regulations, the leading authority is the Supreme Court’s 1945 decision in Bowles v. Seminole Rock & Sand Co., which held that an agency’s construction of its own regulation should be given “controlling weight unless it is plainly erroneous or inconsistent with the regulation.” More recent Supreme Court cases—including Thomas Jefferson University v. Shalala and Auer v. Robbins—have reaffirmed the Seminole Rock principle of judicial deference to an agency’s reasonable construction of its own regulations.

Interest group pluralism presumes that public policy outcomes are determined principally through a contest for influence among organized pressure groups. Most interest groups, however, do not represent themselves in this process. Rather, they rely on professional lobbyists for representation, information, and advice. These lobbyists, however, may have their own interests, which may not align perfectly with those of their clients. This Essay outlines this principal agent problem and suggests its possible implications for policy outcomes. In particular, this piece hypothesizes that the lobbyist-client agency problem may create four notable consequences: (1) it may bias policy in favor of small homogenous groups; (2) it may exacerbate status quo bias; (3) it may promote expansive delegations of power and rulemaking to administrative agencies; and (4) it may impede systematic reforms to the policymaking process.

We analyze the interaction between electoral accountability and separation-of-powers by comparing three regimes: ‘Unilateral Authority’ (the President has exclusive decision-making power); ‘Mandatory Checks’ (the President cannot change policy without congressional assent); and ‘Opt-in Checks’ (the President may seek congressional authorization or act unilaterally). We find: (1) voters use asymmetric electoral rewards and punishments to offset the risk of politician bias, but voters rely less on this blunt instrument if there are internal checks; (2) adding a veto player need not alter the ex ante likelihood of policy change; and (3) voter welfare is highest under Opt-In Checks and lowest under Unilateral Authority.

This Article explores how the separation of powers affects voter’s electoral strategies, and how this interaction influences the performance of different institutional arrangements. We show that when one political agent, such as the President, acts unilaterally, voters are likely to respond asymmetrically to policy successes and failures in order to offset the risk that the President may be biased or “captured” by special interest groups. When political agents act in concert – such as when the President seeks congressional authorization for a policy initiative – voters prefer a more refined strategy, with less acute asymmetries between political rewards and punishments. Our analysis has positive and normative implications. First, it suggests that presidents do not always prefer to operate with as little congressional interference as possible. Second, it provides a rationalist account for “responsibility shifting” by elected officials – behavior that is usually thought to derive from voter confusion or irrationality. Third, it suggests that separation of powers does not necessarily induce “gridlock” or otherwise reduce the likelihood of policy change. Fourth, it suggests that although separation of powers enhances the efficacy of the electoral constraint on politicians, voter welfare is higher when separation of powers is “optional” rather than mandatory, as when the President may seek congressional authorization for policy initiatives but is not required to do so.

This casebook is specifically designed for a first-year class on Legislation Regulation, and provides a proven, ready-to-use set of materials for schools or instructors interested in introducing such a class to their 1L curriculum.

Public choice theory sheds light on many aspects of legislation, regulation, and constitutional law and is critical to a sophisticated understanding of public policy. The editors of this landmark addition to the law and economics literature have organized the Handbook into four main areas of inquiry: foundations, constitutional law and democracy, administrative design and action, and specific statutory schemes. The original contributions, authored by top scholars in the field, provide helpful introductions to important topics in public choice and public law while also exploring the institutional complexity of American democracy.

We use an agency model to analyze the impact of judicial review on democratic performance. We find that judicial review may increase democratic failure by rescuing elected officials from the consequences of ill-advised policies, but may also decrease democratic failure by alerting voters to unjustified government action. We further find that judges will defer to the decision of elected leaders unless the level of democratic failure is sufficiently high. We then show how judicial review affects voter welfare both through its effect on policy choice and through its effect on the efficacy of the electoral process in selecting leaders. We also analyze how the desirability of judicial review is affected by characteristics of the leaders and the judges. Our welfare analysis establishes general conditions under which judicial review serves majoritarian interests - and thereby arguably increases the “democratic” character of political outcomes, despite the non-democratic nature of judicial review itself.

Chevron, U.S.A. v. Natural Resources Defense Council lays out a two-step process that courts must follow when they review a federal agency's construction of a federal statute. We argue that Chevron, rightly understood, has only one step. The single question is whether the agency's construction is permissible as a matter of statutory interpretation. The two Chevron steps both ask this question, just in different ways, and are thus mutually convertible: any opinion written in terms of one step can be written, without loss of content, in terms of the other step. Chevron's artificial division of a unitary inquiry causes material confusion among commentators and courts, and has no benefits; administrative law should jettison the two-step framework.

Economists have made great progress in understanding the incentives and behavior of actors who operate outside of traditional economic markets, including voters, legislators, and bureaucrats. The incentives and behavior of judges, however, remain largely opaque. Do judges act as neutral third-party enforcers of substantive decisions made by others? Are judges "ordinary" policymakers who advance whatever outcomes they favor without any special consideration for law as such? Emerging recent scholarship has started to explore more nuanced conceptions of how law, facts, and judicial preferences may interact to influence judicial decisions. This work develops a perspective on judging that can usefully be understood as the modern manifestation of American Legal Realism, a jurisprudential movement of lawyers, judges, and law professors that flourished in the early twentieth century. The purpose of this essay is to introduce, in simplified form, the Realist account of judicial decision making; to contrast this view with alternative theories about law and judging; and to sketch out how a more explicit integration of the Realists' conceptual insights about law and judicial behavior might enrich the rapidly expanding economic work in this field.

This article considers the type of evidence that an overseer (e.g., a court) should require before allowing a government agent to take some proposed action. The court can increase agency research incentives by prohibiting actions unless the agent produces supporting evidence, and/or by permitting action even when the agent uncovers adverse evidence. The court thus faces a trade-off between an evidentiary standard's ex post effects on the agent's policy decision and its ex ante effects on the agent's incentive to do research. An extension allows the court to make research effort a precondition for action, regardless of the evidence produced.

In the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Congress included a provision requiring bankruptcy courts evaluating individual debtors' financial circumstances to utilize certain monthly expense standards developed by the Internal Revenue Service for assessing taxpayers' ability to pay their taxes (the Standards). While the IRS retains a great deal of discretion in applying the Standards for its own purposes, bankruptcy courts have interpreted the BAPCPA as giving the Standards binding force in the bankruptcy context. This unusual arrangement - where a statute regulating one substantive area incorporates documents promulgated by an unrelated administrative agency for use in a different substantive area - presents bankruptcy judges with a set of unfamiliar and difficult administrative law questions. To what extent, if at all, should bankruptcy courts defer to IRS statements, contained in documents other than the Standards themselves, about how the Standards should be applied? May the IRS alter the Standards for its own purposes but not for bankruptcy purposes, or vice versa? What procedures must the IRS use when it modifies the Standards, especially in light of the fact that the Standards now have an apparently binding effect in bankruptcy cases? These questions have become even more pressing since the IRS in 2007 amended the Standards without public notice and comment and provided different effective dates for IRS and bankruptcy court use of the amended Standards. This essay explains from the standpoint of administrative law the difficulties that these questions present and suggest a few possible (and in some cases competing) administrative law theories for thinking about them.

This Article argues that courts can, and often should, implement constitutional guarantees by crafting doctrines that raise the costs to government decisionmakers of enacting constitutionally problematic policies. This indirect approach may implement a kind of implicit balancing of interests, in which the damage to constitutional values is weighed against the strength of the government’s interest in the challenged policy, more effectively than alternative approaches. When the government has better information than the reviewing court about the effect of the challenged policy on constitutionally relevant interests, heightened enactment costs act as a kind of screening device: if the government would still enact a given policy in the face of substantial additional enactment costs, the probability that the policy serves significant government interests is likely to be higher. This Article first develops the theoretical argument as to how (and under what conditions) doctrines that manipulate legislative enactment costs may be more effective tools for judicial implementation of the Constitution than doctrines that require direct judicial assessment of the relative strength of the competing interests. The Article further contends that the federal judiciary already has the capacity to fashion doctrines that function in this way, and indeed current doctrine influences legislative enactment costs more than has generally been appreciated.

We analyze the positive and normative implications of regulatory oversight when the policymaking agency can improve the quality of regulation through effort, but only some kinds of effort are observable by the overseer, and the overseer's only power is the ability to veto new regulation. Such oversight can increase the quality of agency regulation, but it also introduces inefficiencies—the agency underinvests in unobservable effort and overinvests in observable effort. Agencies have no incentive to conceal their activities from the overseer; the reforms that are likely to reduce inefficiency are therefore those that improve overseer expertise or lower the costs of agency disclosure, not those that compel disclosure. The normative implications depend on the relative severity of bureaucratic drift and slack problems. When slack is paramount, an overseer that is more anti-regulation than the agency or society improves social welfare, as long as it does not deter the agency from regulating entirely. When drift is paramount, oversight improves social welfare only when it deters regulation. In this case, regulatory oversight is weakly dominated by one of two alternatives: eliminating oversight or banning regulation.

This article analyzes the effect of the cost that an agency must incur to adopt a new regulation (the “enactment cost”) on the agency's incentive to invest in expertise. The effect of the enactment cost on agency expertise depends on whether the agency would regulate if it fails to acquire additional information about the regulation's effects. If an uninformed agency would regulate, increasing enactment costs increases agency expertise; if an uninformed agency would retain the status quo, increasing enactment costs decreases agency expertise. These results may influence the behavior of an uninformed overseer, such as a court or legislature, that can manipulate the agency's enactment costs. Such an overseer must balance its interest in influencing agency policy preferences against its interest in increasing agency expertise. The article discusses the implications of these results for various topics in institutional design, including judicial and executive review of agency regulations, structure-and-process theories of congressional oversight, national security, criminal procedure, and constitutional law.

This annual conference is a global gathering of the world's leading scholars and practitioners. Among the attendees are participants from developing countries, think tanks, NGOs, and international institutions. The papers included in this book concern issues such as: inequality and growth in transition; trade liberalization, inequality and poverty in Latin America and the Caribbean; can economic policy overcome geographic disadvantage in Eastern Europe and the Commonwealth of Independent States; and patterns of spatial convergence and divergence in India and China.

This Article presents a positive theoretical analysis of the relationship between the textual plausibility of an administrative agency’s statutory interpretation and the procedural formality with which the agency promulgates that interpretation. The central claim is that, from the perspective of an agency subject to judicial review, textual plausibility and procedural formality function as strategic substitutes: greater procedural formality will be associated with less textual plausibility, and vice versa. Greater textual plausibility increases an agency’s chances of a favorable judicial ruling but entails some sacrifice of policy discretion. Procedural formality is costly, but a reviewing court may give an agency more substantive latitude when the agency promulgates an interpretive decision via an elaborate formal proceeding. The court may view formal process as a proxy for variables that the court considers important but cannot observe directly, such as the significance of the interpretive issue to the agency’s policy agenda. Because procedural formality and textual plausibility are both costly methods for increasing the agency’s odds of surviving judicial review, a rational agency will choose the optimal mix of textual plausibility and procedural formality. Changes that increase or decrease the costs or benefits associated with one of these two variables will therefore have an indirect effect on the other variable as well. This Article develops the theoretical basis for this strategic substitution effect and explores its ramifications for administrative law.

This paper contributes to the positive political theory of legislative delegation by modeling formally the decision calculus of a rational legislator who must choose between delegation to an agency and delegation to a court. The model focuses in particular on the legislator's interest in diversifying risk, both across time and across issues, and her interest in avoiding interpretive inconsistency. 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 inter-temporal risk diversification and inter-issue consistency at the price of inter-temporal inconsistency and a lack of risk diversification across issues, while delegation to courts involves the opposite trade-off. From this basic insight the model derives an array of comparative statics regarding the conditions under which rational legislators would tend to prefer delegating to agencies over courts and vice versa. These results imply hypotheses as to how real-world variation in political and policy-specific variables, as well as variation in characteristics of judicial and agency approaches to statutory interpretation, may affect legislators' preferences regarding allocation of interpretive authority.

Judges often review decisions made by government actors, such as agencies or legislatures, with greater expertise about the effects of different policy choices. One judicial response to this asymmetric information problem has been to shift the focus of review from a substantive evaluation of the policy to an assessment of the quality of the explanation the government offers in support of that choice. Proponents of this type of "hard look" review argue that it improves the quality of government decisions; critics charge that it imposes costs on government policymakers without providing useful information to reviewing courts. This paper offers an alternative perspective: Judicially-imposed explanation requirements can help reviewing courts overcome their informational disadvantage for reasons that are independent of their ability to assess the substantive content of government explanations. If producing impressive explanations is expensive, then the court can reason that the government's willingness to produce a high-quality explanation signals the government's belief that the proposed policy has large benefits. Furthermore, if the preferences of the court and government are positively correlated in expectation, then the fact that the government places a high value on the policy means the policy is more likely to be acceptable to the court. Therefore, judicial evaluation of explanation quality ameliorates the court's informational disadvantage, and may induce a court to uphold a government decision it would otherwise invalidate. The paper develops this costly signaling perspective on hard look review in the administrative law context, and then considers other applications in constitutional and criminal law.

The relationship between third-party contract enforcement and informal networks raises important sociological, political, and economic questions. When economic activity is embedded in social structures, what are the implications of third-party contract enforcement for the scope and nature of economic relations? What determines whether individuals rely on formal legal institutions or informal networks to sustain trade relationships? Do legal institutions erode informal networks? We develop a model in which a trade-off exists between size and sustainability of networks. By adding the possibility of fee-based, enforceable contracts, we provide a theoretical explanation for the coexistence of legal contract enforcement and an informal economy. We find that legal enforcement has little effect on networks until law becomes sufficiently inexpensive, at which point small decreases in the cost of law have dramatic effects on network size and the frequency of use of the legal system.

The Article argues that administrative agencies should have a much greater role in defining the scope of private rights of action than is contemplated by current law or most of the existing legal literature. The Article proposes an extension of Chevron doctrine to the question whether federal statutes authorize enforcement suits by private citizens: statutes which do not on their face clearly create or clearly preclude private rights of actions should be read as empowering the responsible administrative agency to make this determination. Accepting this proposal would significantly expand the influence of the executive branch over private enforcement policy, a development supported and defended in the Article.

Using a simple model of policy making in a system characterized by formal separation of powers, judicial dependence on government support, asymmetric information between voters and the government, and political accountability of the policy branch, I show conditions under which rational voters force the government to cede power over legislative decisions to the courts. Specifically, the public uses its ability to hold the elected branches of government accountable to enforce a judicial veto when judicial opposition to legislation provides more reliable information to voters than government support for legislation does. The model thus provides a theoretical justification for, and suggests important limits to, the common assumption that disregard for judicial decisions is politically costly for elected politicians. The model also demonstrates how other observed patterns in judicial politics—including judicial rubber-stamping of government decisions and government “passing the buck” to courts—can arise as equilibria in the same simple framework.

This paper investigates rational choice explanations for patterns of Supreme Court decision-making with respect to the appropriate level of judicial deference to administrative agency decisions. In particular, I assess empirically the thesis that the Supreme Court expands deference when the Supreme Court is ideologically closer to the executive than to the circuit courts, and contracts deference when the opposite is true. I find little to no evidence supporting this "rational choice" theory of judicial deference. Given this surprising null finding, I offer alternative explanations for the data and suggest directions for future research.

An independent judiciary with the power to constrain the executive and legislative branches is commonly thought to be the foundation of government under the rule of law. However, it is not obvious why those with political power would ever tolerate the constraints imposed by an independent court. I offer an explanation for independent judicial review that is based on ongoing political competition between risk‐averse parties. An independent judiciary is a mechanism through which these political competitors can enforce mutual restraint. But support for independent judicial review is sustainable only when (1) the political system is sufficiently competitive, (2) judicial doctrine is sufficiently moderate, and (3) parties are both sufficiently risk averse and forward looking. I employ a simple formal model to show how these variables influence the political sustainability of independent judicial review, and I also present the results of a preliminary empirical test that confirms the central hypotheses.

We develop an informational model of judicial decision-making in which deference to precedent is useful to policy-oriented appellate judges because it improves the accuracy with which they can communicate legal rules to trial judges. Our simple model yields new implications and hypotheses regarding conditions under which judges will maintain or break with precedent, the constraining effect that precedent has on judicial decision-making, the voting behavior of Supreme Court Justices, the relationship between a precedent's age and its authority, the effect of legal complexity on the level of deference to precedent, the relative stability of rules and standards, and long-term patterns of legal evolution. Perhaps most importantly, we demonstrate that "legalist" features of judicial decision-making are consistent with an assumption of policy-oriented judges.