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An Informational Perspective on Administrative Procedures

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  • de Figueiredo, Rui J P, Jr
  • Spiller, Pablo T
  • Urbiztondo, Santiago

Abstract

A number of scholars have identified the important role administrative procedures have in 'structuring' the interest group environment of government agencies: determining who can participate and in what manner. Using a formal model, we analyze the incentives and outcomes that different procedural--and therefore interest group--environments generate. The model yields a number of important conclusions. First, because elected officials are concerned not only about distributional rents, but also informational ones, the use of procedures in some cases will result in worse outcomes for political principals on the policy dimension. Officials will be willing to bear the losses in exchange for informational gains. Second, under certain conditions, a politician is better off with a biased group monitoring the agency rather than a neutral one, since biased groups will subsidize a portion of the monitoring cost. Third, having multiple interest groups, including one in opposition to the politician, makes the political principal strictly better off than any other constellation of monitors, since competing interest groups will provide the greatest information at the lowest cost to the elected official. Copyright 1999 by Oxford University Press.

Suggested Citation

  • de Figueiredo, Rui J P, Jr & Spiller, Pablo T & Urbiztondo, Santiago, 1999. "An Informational Perspective on Administrative Procedures," Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 283-305, April.
  • Handle: RePEc:oup:jleorg:v:15:y:1999:i:1:p:283-305
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    References listed on IDEAS

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    1. Snyder, Edward A, 1990. "The Effect of Higher Criminal Penalties on Antitrust Enforcement," Journal of Law and Economics, University of Chicago Press, vol. 33(2), pages 439-462, October.
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    Cited by:

    1. Spiller, Pablo T., 2013. "Transaction cost regulation," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 232-242.
    2. Pablo T Spiller & Rafael Gely, 2007. "Strategic Judicial Decision Making," Levine's Working Paper Archive 122247000000001409, David K. Levine.
    3. John M. de Figueiredo & Edward H. Stiglitz, 2015. "Democratic Rulemaking," NBER Working Papers 21765, National Bureau of Economic Research, Inc.
    4. Paul Levine & Neil Rickman & Francesc Trillas, 2006. "Price Regulation and the Commitment Problem: Can Limited Capture be Beneficial?," School of Economics Discussion Papers 0106, School of Economics, University of Surrey.
    5. Tamer Çetin & M. Zahid Sobacı & Mehmet Nargeleçekenler, 2016. "Independence and accountability of independent regulatory agencies: the case of Turkey," European Journal of Law and Economics, Springer, vol. 41(3), pages 601-620, June.
    6. Adam Fremeth & Guy Holburn & Pablo Spiller, 2014. "The impact of consumer advocates on regulatory policy in the electric utility sector," Public Choice, Springer, vol. 161(1), pages 157-181, October.
    7. Pablo T. Spiller, 2009. "An Institutional Theory of Public Contracts: Regulatory Implications," Chapters,in: Regulation, Deregulation, Reregulation, chapter 3 Edward Elgar Publishing.
    8. 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.
    9. Ip Eric C., 2012. "Judicial Review in China: A Positive Political Economy Analysis," Review of Law & Economics, De Gruyter, vol. 8(2), pages 331-366, October.
    10. Mariano Tommasi & Pablo T. Spiller, 2004. "The Institutions of Regulation," Working Papers 67, Universidad de San Andres, Departamento de Economia, revised Mar 2004.
    11. Tom Ginsburg, 2002. "Comparative Administrative Procedure: Evidence from Northeast Asia," Constitutional Political Economy, Springer, vol. 13(3), pages 247-264, September.
    12. Evans, Joanne & Levine, Paul & Trillas, Francesc, 2008. "Lobbies, delegation and the under-investment problem in regulation," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 17-40, January.
    13. John M. de Figueiredo, 2009. "Integrated Political Strategy," NBER Working Papers 15053, National Bureau of Economic Research, Inc.
    14. Brito Duarte & Pereira Pedro & Vareda João, 2013. "Investment, Dynamic Consistency and the Sectoral Regulator’s Objective," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 563-594, August.
    15. de Figueiredo, Rui J P, Jr & Vanden Bergh, Richard G, 2004. "The Political Economy of State-Level Administrative Procedure Acts," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 569-588, October.
    16. Marian W. Moszoro & Pablo T. Spiller, 2012. "Third-Party Opportunism and the Nature of Public Contracts," NBER Working Papers 18636, National Bureau of Economic Research, Inc.
    17. Pablo T. Spiller, 2009. "An Institutional Theory of Public Contracts: Regulatory Implications," Chapters,in: Regulation, Deregulation, Reregulation, chapter 3 Edward Elgar Publishing.
    18. 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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