From Preference to Policy - A Traditional View

In an ideal democracy, the preferences of a nation’s citizens would determine government policy a 100% of the time. However, with a country consisting of over 300 million people (with a wide diversity of interest and knowledge on a torrent of issues) an ideal democracy is impossible to achieve and, to be perfectly honest, most likely not wanted as it would require a tremendous amount of effort on behalf of the voter. Instead, our democracy is based on the decisions made by our elected representatives and those our elective representatives put in charge of specific operations. Nevertheless, government policy should still be roughly in line with the people’s preferences by definition of being a democracy. The question is, “is it?”

Even if our elected representatives are fully committed to carrying out the people’s choices, the likelihood that our preferences for policy are converted into results is far from certain. Because of the sheer amount of legislation that must be implemented, it is necessary for Congress to distribute the workload among different agencies. These agencies are legally liable to Congress, however the problem becomes how well is Congress able to monitor these agencies? While the article presented here might seem a little foolish, it raises a legitimate point. While I don’t doubt the general intelligence of our representatives at large, the fact is that not too many are specialized in fields outside of government and law. Agencies deciding environmental policy or nuclear waste disposal regulations are the clear experts and Congress can really only trust their judgment. This creates a certain degree of agency autonomy that Congress can only loosely regulate.

These agencies have their own utility maximizing functions that are different from Congress and are, in turn, different from preferences of voters. While Weingast and Moran have provided support for the idea that Congress does indeed possess a sufficient incentive system for keeping agency policy making decisions in line, I believe evidence for the traditional view of agency autonomy is still a more aesthetically pleasing argument if not necessarily as strongly empirically supported. If it is true that agencies are indeed somewhat autonomous of Congress, it would seem that our present governmental structure of representative democracy is not the most efficient means of transforming voter preferences into policy results. Then again, maybe turning voter preferences into 100% results isn’t the best thing for a nation anyway.

The TSA vs. The American Traveler Dignity Act of 2010

The link found in the title describes a proposed bill by Congressman Ron Paul. In reaction to the Transportation Security Administration's (TSA) heightened security checks using x-ray technology and enhanced pat-down screening protocols, Mr.Paul has written out H.R. 6416:The American Traveler Dignity Act. This bill proclaims that "no law...shall be construed to confer any immunity for a Federal...agency...who subjects an individual to any physical contact...x-rays...as a condition...to be in an airport or to fly in an aircraft."

In light of this development, how can Niskanen's traditional approach help us understand the TSA's actions and the response by Congressman Paul? One of the crucial implications of Niskanen's view is that the federal agency, like a monopoly supplier, will want to produce more than the sponsor wants, thereby getting more profits/funds/power. In accordance with this view, because of 9/11 and terrorist threats, the TSA has expanded and ramped up its efforts to ensure that airports remain safe. Because the demand for their services has become rather inelastic, they have the ability to extract more surplus value. Congressman Ron Paul's proposed legislation though illustrates how the Congress can in fact curve a bureau's ability to "run wild." Some would therefore claim that this provides evidence for Weingast and Moran's model that argues that to "understand regulatory policymaking we must understand legislative politics." Although legislators may not be continously or directly monitoring the federal agency, Congress possesses sufficient rewards and sanctions to creative an incentive system.

The problem with this argument in this particular case is that the legistlation proposed still has to pass through the House Judiciary committee for approval. One of the essential components of the Congressional Dominance Approach is that rewards "go to agencies that pursue policies of interest to the current committee members" while "those agencies that fail to do so are confronted with sanctions." Therefore this bill is not an example of the relevant committee demonstrating its influence over the TSA; rather, this bill seeems to be evidence that the federal agency has operated independently of Congress. Ron Paul, who oftentimes points out the inefficiency of federal agencies, is trying to explicitly limit the power of this "unaccountable government entity." (from Paul's speech) In order to know which model is more accurate, we will have to see what the House Judiciary committee and the subcomittee on the Constitution, Civil Rights and Civil Liberties in charge of overseeing the TSA deciedes. Furthermore, the Weingast and Moran model still might hold because the committee might in fact favor the actions taken by the TSA to heighten security screenings, thus explaining why Mr. Paul's legislation will not pass and the status quo persists. More importantly, if H.R. 6416 fails, it will demostrate how the isolation of some federal agencies allows them to increase their power and reach without being subject to efficiency incentives.

The Energy and Commerce Committee and the FCC

This article from Politico is a great example of Weingast and Moran’s congressional dominance model. It describes how the Republican representatives who could potentially come to lead the Energy and Commerce Committee in January are issuing a clear warning to the FCC (which it oversees) to stop pursuing net neutrality. Net neutrality is a set of regulations that would require all internet providers to treat all web traffic equally. The reaction from the representatives followed an announcement that the FCC would address net neutrality in its December meeting. A total of 19 representatives signed a letter warning the FCC that moving forward with net neutrality would be “a mistake.” Rep. Fred Upton (R-Mich), considered the frontrunner to lead the committee threatened that “the FCC will be prominently featured and Chairman Genachowski will soon be a familiar face on Capitol Hill” if the FCC moves ahead with net neutrality. As Weingast and Moran’s model predicts, the FCC was proceeding with little congressional interference, until there was a change in the policy preferences of the relevant committee. This change in interest has been made clear and congress has asserted its dominance over policy by issuing threats of hearings and investigations. Also interesting are Rep. Upton’s top campaign donors, AT&T, Comcast, the National Cable and Telecommunications Association, and Verizon all of which have an economic interest in preventing net neutrality regulation.

What motivates HUD Secretary Shaun Donovan?

In this article from Thehill.com Rep. Dennis Cardoza (D-Calif.) and other House Democrats angry with the HUD’s response to the housing crisis escalated their fight Thursday by stripping the U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan of his travel budget in response to a trip Donovan took to Rio de Janeiro, Brazil. The House approved Cardoza’s amendment by voice vote, and it was later set on the Transportation, Housing and Urban Development spending bill. In this circumstance the "Budget Maximizing Bureaucrat"as Mueller would put it, used his budget for his own self use and as a consequence congressional action was taken against him. This also questions what really drives a senior Bureaucrat. In this circumstance, we see that Congressional oversight had control of HUD's budgetary process, which Weingast and Marshall state is one of three factors that allow congress to exercise control. So, even though in the case of most bureaucracies personal utility is not affected by job utility, in this case the repercussions not only affect Secretary Donovan but also affect the budget of the whole agency in achieving its goals of better housing for U.S. citizens. In a separate article from Federal News Radio, Secretary Donovan has also led HUD in Hiring Reform, in order to meet President Obama's goal of 80 days to bring in a new federal employee. The article states that , "The Department of Housing and Urban Development went from being the poster child for the dysfunctional federal hiring process to being a model of what others are striving for." I can attest to that after working there for the past four summers, trust me it has gotten a lot better (lol). The main point here is that there is most likely some ulterior motive that just wanting to adhere to the President's goal of 80 days to bring in a new employee. If the reputation of the agency or the output of the Bureau increases for the better, that will positively reflect on the Senior Bureaucrat, Shaun Donovan. So, there are a lot of motives for this reform that might not be clear to the average person. So it would seem, based on the information contained in these two articles, that the utility function of a Senior Bureaucrat discussed in Mueller is pretty applicable to Shaun Donovan because almost all of the criteria that make up that utility function can be seen in the actions of Shaun Donovan.

The Government Really Wants You To Eat Cheese

The U.S. Department of Agriculture created “Dairy Management” in 1995 as a marketing organization to promote dairy products. Its annual budget approaches $140 million, funded mostly by a government-mandated fee on the dairy industry. According to this NY Times article, the U.S.D.A. also gives several millions of dollars to the organization, “appoints some of its board members, approves its marketing campaigns and major contracts, and periodically reports to Congress on its work.”

Lately, the organization has been adamantly pushing cheese to the American consumer. Dairy Management partnered with Domino’s pizza to create a new, “better-tasting” pizza that contains 40% more cheese. A few years back, Dairy Management also created a marketing campaign around the premise that consuming more dairy products could lead to weight loss, even though no research asserted this fact.

By law, the secretary of agriculture approves Dairy Management’s contracts and advertising campaigns. Nevertheless, the article claims that the organization has become a full-blown, relatively independent company. The government has recently warned about the dangers of a diet high in saturated fat, yet it allows Dairy Management to market increased cheese consumption. This view of the Dairy Management organization follows Niskanen’s traditional view of bureaucracies that they act independently of the wishes of their sponsors (i.e. that a government bureau pushes for increased cheese consumption despite government warnings for reduced consumption).

However, I would argue that Dairy Management exactly follows the wishes of Congress and exemplifies the model of bureaucracy presented in Weingast and Moran. Undoubtedly, Congress members on the agriculture subcommittee for dairy closely follow and are happy with the work of Dairy Management. An increase in dairy sales pleases their dairy farmer constituents, and thus gives congressmen more votes. The government’s message for a reduced-fat diet (i.e. less cheese) is half-hearted – congressmen want votes more than they want healthy constituents. Therefore, Dairy Management isn't the one to credit for increased dairy consumption. Congress is.