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A Theory of Strategic Oversight: Congress, Lobbyists, and the Bureaucracy


  • Epstein, David
  • O'Halloran, Sharyn


This article develops a formal model of interest groups and congressional control of the bureaucracy. It shows that, even when interest groups act strategically, lobbyists can facilitate Congress's oversight role. Our results indicate that lobbying can help reduce informational asymmetries between Congress and the bureaucracy, and that the mere threat of sounding a "fire alarm" can result in policy concessions for interest groups. We demonstrate that agencies often moderate their proposals to obtain interest-group support, that interest groups will be truthful in their endorsements even with no explicit penalty for lying, and that lobbying can reduce the uncertainty surrounding policy outcomes. Moreover, when multiple interest groups lobby Congress, legislators make oversight decisions based on the range of moderate groups that support the agency's actions. Thus they can control administrative agencies by observing the dividing line between interest groups that support the agency's proposal and those that oppose it. Copyright 1995 by Oxford University Press.

Suggested Citation

  • Epstein, David & O'Halloran, Sharyn, 1995. "A Theory of Strategic Oversight: Congress, Lobbyists, and the Bureaucracy," Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(2), pages 227-255, October.
  • Handle: RePEc:oup:jleorg:v:11:y:1995:i:2:p:227-55

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    References listed on IDEAS

    1. Keith Head & John C. Ries & Deborah L. Swenson, 1994. "The Attraction of Foreign Manufacturing Investments: Investment Promotion and Agglomeration Economies," NBER Working Papers 4878, National Bureau of Economic Research, Inc.
    2. David Cutler, 1994. "Market Failure in Small Group Health Insurance," NBER Working Papers 4879, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Potters, Jan & Sloof, Randolph & van Winden, Frans, 1997. "Campaign expenditures, contributions and direct endorsements: The strategic use of information and money to influence voter behavior," European Journal of Political Economy, Elsevier, vol. 13(1), pages 1-31, February.
    2. Schuler Douglas A. & Rehbein Kathleen, 2011. "Determinants of Access to Legislative and Executive Branch Officials: Business Firms and Trade Policymaking in the U.S," Business and Politics, De Gruyter, vol. 13(3), pages 1-32, October.
    3. Lehmann, Markus A., 2002. "Error minimization and deterrence in agency control," International Review of Law and Economics, Elsevier, vol. 21(4), pages 373-391, May.
    4. Santiago Urbiztondo & Fernando Navajas & Daniel Artana, 1998. "La autonomía de los entes reguladores argentinos: Agua y cloacas, gas natural, energía eléctrica y telecomunicaciones," Research Department Publications 3038, Inter-American Development Bank, Research Department.
    5. Clare Leaver, 2007. "Bureaucratic Minimal Squawk Behavior: Theory and Evidence from Regulatory Agencies," Economics Series Working Papers 344, University of Oxford, Department of Economics.
    6. John M. de Figueiredo, 2009. "Integrated Political Strategy," NBER Working Papers 15053, National Bureau of Economic Research, Inc.
    7. Moser, Peter, 1999. "The impact of legislative institutions on public policy: a survey," European Journal of Political Economy, Elsevier, vol. 15(1), pages 1-33, March.
    8. Pablo T. Spiller & Sanny Liao, 2006. "Buy, Lobby or Sue: Interest Groups' Participation in Policy Making - A Selective Survey," NBER Working Papers 12209, National Bureau of Economic Research, Inc.
    9. Manjhi, Ganesh & Mehra, Meeta Keswani, 2017. "Dynamics of the Economics of Special Interest Politics," Working Papers 17/206, National Institute of Public Finance and Policy.
    10. Peter Grajzl, 2011. "A property rights approach to legislative delegation," Economics of Governance, Springer, vol. 12(2), pages 177-200, June.

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