Committee hearings data were collected for two purposes: first, to gauge the relative extent to which congressional committees oversee the federal bureaucracy; second, to measure the average “informational intensity” of the issues that fall within the jurisdiction of a congressional committee. This section outlines how these data were collected and compiled.

DATA SOURCE

We relied on a third-party commercial vendor, Congressional Information Service, Inc. (CIS), which publishes summaries of all published committee hearings. CIS also makes these summaries available on-line. We obtained these on-line briefs and created a file containing all the hearings held by each standing committee from the 80th to 103d Congress. We used two of CIS's products: Congressional Masterfile 1 and Congressional Masterfile 2. The former provides an on-line summary of each published hearing from the second session of the 91st Congress through to the present (or, at the time of the study, the 103d Congress). The latter provides a summary of each published hearing and a summary of selected unpublished hearings. The congressional masterfiles come with their own extraction software, which allows the researcher to search by using keywords, subject, date of hearings, or serial set number. As our needs are somewhat specialized, we were forced to rely on our own search engines, which we now detail.

DATA EXTRACTION METHOD

To analyze this data, we wrote two UNIX shell script programs. The first program counted the number of times a particular committee held hearings during a Congress.

This appendix details the coding rules used to compile the data sets in our study. As a general rule, each of the data sets was coded independently by two different researchers, and then checked over by a third. Upon final entry, each law was then checked a fourth and final time by the authors.

MAJOR PROVISIONS

For the most part, counting the number of major provisions listed in Congressional Quarterly's legislative summaries was straightforward: Each new paragraph counted as a provision. In difficult cases, we followed these rules:

• Bullets and paragraphs count as separate provisions.

• Sub-bullets do not count if they merely elaborate on the previous paragraph.

• Sub-bullets do count if they include new substantive authority.

• Unbulleted paragraphs count as a separate provision if they are substantively distinct from the previous, bulleted paragraph.

• If a paragraph is followed by a colon and a list of elements, and if the elements of the list merely elaborate on the main point of the paragraph, then we count the paragraph and accompanying list as one provision.

DELEGATION

Our definition of delegation is any major provision that gives another governmental body the authority to move policy away from the status quo. To maintain consistency across laws, we developed the following guidelines.

Examples of what delegation is:

• The authorization of a new program with some discretionary powers;

• Discretion to make or modify decision-making criteria;

• Extension of discretionary authority that would otherwise expire;

• The creation of a new commission, board, or agency;

• Demonstration projects;

• Grants and loans where the agency determines the size of the award and/or the recipients;

• The right to issue subpoenas;

• The right to bring suit or intervene in an existing suit;

• The right to issue waivers;

• The ability to enter into contracts.

Our view of legislative–executive relations, similar to the studies cited in Chapter 2, attempts to motivate delegation from the ground up as a rational institutional choice made by utility-maximizing legislators. In constructing our framework, we draw an analogy with recent insights from the economic theory of the firm. Particularly of interest is work on the subject of transaction cost economics and vertical integration – that is, a firm's make-or-buy decision. We argue that Congress has a similar make-or-buy decision when making public policy; it can specify the details of legislation itself or it can subcontract them to executive agencies. Furthermore, the central concepts of transaction cost economics can help us construct a theory of political delegation, so that we can make predictions about the location of policy making in a separation of powers system.

Our objective in this exercise is not simply to impose transaction cost analysis on a political context but to use its key notions as organizing principles. In particular, the concepts of boundaries, incomplete contracts, and the holdup problem shed new light on issues of legislative organization and congressional–executive relations. The committee system and delegation both have their strengths and weaknesses, and the transaction costs associated with policy production in either mode will vary from case to case.

Congressional–executive relations have long been a favored stomping ground for institutional scholars. The dynamics established by the Article 1, Section 7 game have inspired ruminations on the roles that vetoes, presidential leadership and agenda setting, and interbranch bargaining play in the macropolicy production of the federal government. To this list, we add the observation that one crucial dimension of interbranch negotiations concerns the amount of leeway that Congress admits to the president in the execution of public laws. The model presented in Chapter 4 suggests that, as delegation becomes less attractive in terms of legislators' reelection concerns, Congress will substitute legislative policy making for agency policy making.

In the pages that follow, we test this basic proposition from a number of different angles. We examine whether (1) divided government leads to lower average levels of executive branch discretion; (2) individual members more often vote in favor of delegation to presidents of their own party as opposed to presidents of the opposite party; (3) actual or threatened vetoes increase executive discretion; (4) legislators rely more on federalism and judicial oversight to circumvent the executive during times of divided government; and (5) legislators give power to executive actors further from the president's direct control under divided government.

Our approach to congressional delegation states that legislators cede substantive discretionary authority to the bureaucracy in policy areas where the legislative process is least efficient relative to bureaucratic decision making. In this chapter, we provide background for our argument by reviewing recent work on both congressional policy making and legislative oversight of the bureaucracy. We then discuss previous treatments of the question of when Congress delegates and conclude by arguing that to understand delegation one must measure it against the hard reality of making policy through congressional committees.

LEGISLATIVE ORGANIZATION

The starting point of modern congressional analysis is David Mayhew's book The Electoral Connection (1974), which lays out a vision of congressional organization as a rationally constructed, conscious choice made by reelection-seeking individuals. Mayhew emphasized the importance of the committee system as a basis for members to pursue their electoral goals and consequently downplayed the role of parties. His study has remained influential mainly due to its methodological focus: It took a ground-up view of legislative organization and built upon this edifice a theory of public policy. Mayhew's incentive-based approach and deductive style of argumentation are typical of economic analysis, even if no explicit formal models, economic or otherwise, were employed.

Social Choice Roots

The second strand of modern theories of Congress has its roots in social-choice theory, a rather abstract branch of study somewhere in the intersection of mathematical economics and decision theory.

THE POLITICS OF MILITARY BASE CLOSINGS

In 1988 the U.S. Congress established a blue-ribbon Base Realignment and Closure (BRAC) Commission. Its powers were broad: to recommend a list of military establishments to be closed, which would become law unless Congress voted to override the commission's decision. Its impact was immense, with foreseen economic consequences, calculated in terms of lost jobs and economic growth, that could devastate the local communities surrounding targeted military bases. Why would Congress delegate authority over a policy area so obviously vital to constituents? And why did delegation take the shape of an independent commission?

Let us examine the problem from legislators' point of view. They have three choices: (1) ignore the issue entirely and close no bases; (2) pass a law listing which bases will be closed; or (3) delegate this decision to the executive. Congress had taken the first option after a round of base closings following the Vietnam War, nearly five hundred in all, had left members unhappy both over the loss of jobs in their districts and with the perception that the cuts were politically motivated, coming largely at the expense of Democrats.

SUMMARY OF RESULTS

In this book, we have presented what we consider a null theory of policy making under separate powers. When legislators have the option of delegating authority to the executive, the division of policy-making authority will follow the natural fault lines of political advantage: Legislators will rationally choose to delegate in exactly those areas where the political advantages of doing so outweigh the costs. The balance of power across the branches will therefore depend on the efficacy of both delegation and legislative action, from one issue area to the next.

To capture this logic of national policy making, we constructed a formal model of policy formation in which committees and agencies both possess some degree of technical expertise. The median voter in Congress could choose to delegate to the executive or make the details of policy herself, and if any authority was delegated, the discretion accompanying this authority could be circumscribed by restrictive administrative procedures. From the model, we derived a series of propositions predicting that executive discretion should rise when legislative committees are outliers, fall under divided government, and rise when the issue area at hand is characterized by informational intensity or uncertainty.

We identified each of the roll calls associated with the passage of our sample laws and coded if the measure sought to increase or decrease executive discretion. Here we relied on the Congressional Quarterly's vote summaries contained in the CQ Almanac and the ICPSR brief descriptions of each roll call. When these briefs were ambiguous, we located the discussion of the roll-call measure in the CQ legislative summary. If, after reviewing these secondary sources, it was still unclear if the vote was over delegation, we turned to the primary sources, including committee reports and the debates surrounding consideration of the measure.

DEFINING ROLL CALLS OVER DELEGATION

The first step in coding each roll call is to determine whether or not the motion under consideration (amendment, rule, passage, etc.) directly affects delegation. The step-by-step procedure is as follows:

1. For each roll call, read the ICPSR description.

2. Compare this with the associated Congressional Quarterly roll-call brief.

3. Determine if the roll call is a vote on delegation or not.

4. If in doubt about step 3, consult the CQ legislative summaries of each bill.

5. If the vote is not over delegation, stop and go to the next record. Otherwise, proceed to the steps below.

The aim of this book is to develop and test theories of legislative-executive relations in a separation of powers system. We apply transaction cost analysis to the study of relations among political actors, arguing that delegation is, at its heart, a choice between congressional policy making and policy made through executive branch agencies. To understand the contours of delegation, and hence the administrative state, one must therefore first understand the strengths and weaknesses of policy making through both of these two modes and the trade-offs that legislators face when choosing between them. In this sense, our work is partly synthetic, bringing together two literatures already well established within political science, and it is partly generative, illuminating and expanding on these literatures by juxtaposing them, seeing them as alternatives, and elucidating the reciprocal influences that the branches have on each other.

We were aided by many of our colleagues in the process of preparing this work, especially, but not exclusively, Chris Achen, John Aldrich, Jeff Banks, Bob Bates, Kathy Bawn, Jonathan Bendor, John Brehm, John Carey, Gary Cox, Rui DeFigueredo, Avinash Dixit, John Ferejohn, Andrew Gelman, Oliver Hart, Will Heller, John Huber, Simon Jackman, Bob Jervis, Phil Keefer, Gary King, Ken Kollman, Matt McCubbins, Douglass North, Sunita Parikh, Torsten Persson, Roberta Romano, Ken Shepsle, Bob Shapiro, Kaare Strøm, Craig Volden, Barry Weingast, and Greg Wawro, and participants at the Harvard Political Economy Book Seminar, the Stanford Public Choice and Political Economy Seminars, and the Columbia University Political Economy Workshop.

It is clear that a number of data sets will be necessary to test the nine propositions laid out in the previous chapter: roll-call votes, committee membership, issue areas, and so on. We set aside this chapter, though, to examine the one data set unique to the present study, namely, a measure of executive discretion. Our theory provides us with two starting points in this task. First, as our model centers on the passage of legislation, our proper unit of analysis is a law. Second, discretion in our model is composed of both delegation and constraints – the former giving power to the executive and the latter circumscribing its limits.

In constructing our discretion index, we are forced, to some extent, to rely on individual judgment. But to minimize subjectivity, we devised a set of systematic coding rules and procedures for each element of the data set. In this chapter and its accompanying appendixes, we describe our sample of laws, detail how we code and construct our key variable of interest, and present some summary statistics and trends in executive discretion over time.

After we had circulated initial drafts of this work, several colleagues inquired how our transaction cost politics framework could be adapted to a comparative setting. Comparative specialists, after all, love to remind us that American politics is the last bastion of area studies. This afterword therefore offers a few speculative remarks about the application of our findings to other governmental systems, both presidential and parliamentary.

The logic of our approach begins with the observation that the U.S. system of separate powers allows two general methods of policy making, through legislative committees or through executive agencies. Since legislators can control which of these two methods is chosen by writing explicit or vague legislation, the location of policy making will maximize legislators' basic political goal of reelection. So the means of policy production is explicable in terms of rational politicians' behavior.

PRESIDENTIAL SYSTEMS

Our theory should be directly applicable to other separation of powers systems (or presidential systems, as they are now called). Here, too, legislative and executive policy making are both possible, with legislators having the option of delegating power or making explicit policy themselves. If our transaction cost politics approach holds elsewhere, we should see legislatures delegating those issues that have the least electoral advantages for them and retaining control over issues whose disposition is most crucial to their reelection concerns.

We now turn to the second set of hypotheses that emerge from our model, those regarding legislative organization and congressional delegation. Our intent is to place the study of legislative organization, and in particular the committee system, within the larger framework of the U.S. governmental process and to explore how the possibility of delegating authority to the executive alters legislators' incentives, behavior, and policy choices. The key prediction analyzed here is that, since congressional policy making and delegation are substitutes, albeit imperfect ones, inefficiencies in the legislative process should lead rational legislators to rely less on committees and to shift more discretionary authority to executive agencies.

We begin our analysis by first reviewing the different theories of legislative organization, concluding that Congress's most distinctive feature – its system of strong committees – must derive not from legislators' desire for informational or distributive benefits, but from incentives created by the larger constitutional system, including separate powers. We then test this theory in three ways: (1) by relating the presence or absence of committee outliers to interbranch conflict; (2) by exploring the impact of committee–floor conflict on Congress's decision to delegate; and (3) by examining the ways in which parliamentary devices like restrictive rules and multiple referrals affect agency discretion.