Agency Discretion and the Dynamics of Procedural Reform

Abstract

It is axiomatic that important policy decisions are made in the administrative process, that governmental and nongovernmental actors have a large stake in that process, and that they try to influence it. One way politicians and courts try to influence agency policy making is by imposing procedural requirements on the agency decision process--requirements that are designed to benefit favored interest groups. While there is considerable disagreement among scholars over the effectiveness of these attempts to use procedures to stack the deck in favor of certain constituents, relatively little empirical data have been brought to debate. In this article I examine a succession of attempts to use procedural requirements to influence the Federal Energy Regulatory Commission's (FERC) hydro licensing program, and the agency's response to those procedural reforms. The analysis produced three central conclusions. First, the FERC responded to each of these procedural reforms in ways that limited or avoided the kinds of policy changes the reforms were designed to elicit. Second, the agency's responses limited environmental interest group access to the decisionmaking process. Third, despite the first two conclusions, the agency's behavior remained consistent with (1) its substantive (i.e., nonprocedural) statutory mandates, and (2) its view that avoiding cumbersome new procedures would facilitate the fulfillment of those mandates. Interest Groups, Procedures, and Agency Decisions The debate over the purposes of administrative procedures and their effects on agency decision-making processes has persisted for decades, and continues to evolve in new and interesting directions. Some scholars have prescribed administrative procedures as the antidote for an administrative process that they see as closed, arbitrary, too responsive to business interests, and not responsive enough to the public at large (Lowi, 1979; Stewart, 1978). This view of administrative procedures arose in response to: (1) capture theories that describe how regulatory agencies become the captives of business interests over time (Bernstein, 1955; Ferejohn, 1987; Kolko, 1966); and (2) other interest group theories stressing the resource disadvantages and collective action problems that impede the ability of large, diffuse interests to participate in the agency decision-making process, leaving that process to the influence of established business interests (Olson, 1965; Schattschneider, 1960). By the 1960s, concern over probusiness bias in the administrative process had spread from academic to policy and judicial circles (Melnick, 1983). At the prodding of public interest lobbyists, courts first began to pry open the agency decision-making process in the 1960s and 1970s by interpreting the Administrative Procedures Act (APA) to require expanded participation rights for underrepresented interest groups. For its part, Congress supplemented this effort by imposing new and additional procedural requirements on agencies. Not surprisingly, some scholars celebrated this movement toward increased procedural rigor in the administrative process in general, and the increased use of rule making in particular, as a way to make that process fairer and more democratic (for example, Davis, 1969). Other scholars, many of them positive political theorists, took a slightly different view of procedures, portraying Congress's imposition of new procedural requirements on agencies as a tool of political control by the former over the latter. According to this view, Congress makes decisions about procedures in tandem with other decisions about the agency decision-making environment in an effort to exert ex ante(1) influence over future agency decisions. In this way, procedures enable the interest groups that were members of the winning legislative coalition to enforce the legislative bargain at the agency decision-making stage (McCubbins, Noll, and Weingast, 1987; 1988). …