The Journal of Law, Economics, and Organization V15 I1
© 1999 Oxford University Press
Article |
An informational perspective on administrative procedures
University of California, Berkeley, CA, USA
0 National University of La Plata and FIEL
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.