State Capacity and Accountability, 1/3
a new essay of mine in National Affairs
I invite you to read my new essay, Designing a Better Regulatory State.
George Mason University professor Tyler Cowen coined the expression "state-capacity libertarianism" to describe the view that a strong, competent government is more likely to promote ordered liberty than a weak government. Rather than starving the government to bring it down to size, as conservatives and libertarians alike have attempted in recent decades, a state-capacity libertarian would argue that we need a government with the competence, the resources, and yes, the authority, to respond to novel virus outbreaks and reduce the electricity grid's vulnerability. Competent governance during pandemics, power outages, and other emergencies would diminish calls for greater government intervention during times of crisis.
In keeping with this philosophy, conservatives would do well to think less about abolishing the regulatory state and more about how to reform it in ways that enable it to govern effectively while guarding against abuse.
I don’t think that we can do without an administrative state. Do you think Congressmen have the knowhow to take decision-making authority back from the FCC, the SEC, the nuclear regulatory agency, and so on?
But given that an administrative state exists, does it have to be as incompetent as the one we have? Are we stuck with Dr. Fauci and the CDC, with no mechanism for improvement?
In the essay, I propose ways to make the administrative state more operationally effective and more accountable. These proposals are not foolproof. But if you fail to offer constructive criticism and instead only point out flaws, then my comeback will be to ask you to defend the status quo.
I believe that a technocratic elite making regulatory decisions is inevitable in modern society. But it is not inevitable that they lack accountability, as they do in our current system. And I hope that it is not inevitable that they think too highly of themselves and assume powers and responsibilities that are beyond their competence.
I have some attraction to this model. The president would essentially become the appointer-in-chief. But I suspect that it would not actually get us all that far. The reason is that, from a libertarian perspective, it does not address the incentives for continued accretion of power in regulatory agencies. I think a better approach would be to address three problems, and then implement at least the chief auditor concept and a reorganization of regulatory domains.
The first problem is that regulatory agencies write their own laws by way of rule-making. If you believe that the regulators are more competent and knowledgeable than the Congress is, this should produce better laws. But we don't need the agencies to have legislative power for them to contribute that competence. For existing agencies, we could tell them to propose a set of laws that codify their rules and removes their power to set rules. For new agencies, we could let them write rules for some period of time, at which point their legislative powers sunset and they have to also propose codification of their rules. This avoids the ratchet effect of new rules being added when an agency gets new, more driven leadership. Perhaps both the regulatory agency and the president submit reports with codification recommendations. In order to make sure that something passes, we'd also need some changes inside of Congress's processes to make sure that Congress acted on the codification. We'd need to create an incentive for someone to propose a bill, privilege the consideration of those bills, and eliminate the filibuster for the passage of them. Perhaps we do a little crossing of the branches to allow the president to author a bill, and that bill that is privileged in that any member can call for it to be discharged from committee after 60 days, and the filibuster does not apply to it; or maybe those rules come into play only if a Congress does not itself pass something in its first session of a two-year Congress (assuming that the reports from the regulatory agency would be due within the first session).
The second problem is on the other end of the spectrum. There's no reason to believe that federal judges are incapable of understanding and properly interpreting the substance of today's regulations. Anyone who has ever been before a federal judge should know that they are some of the most fearsomely intelligent people you will ever run across. If a regulation is too complicated for them to understand (in order to apply), it is too complicated for anyone to understand (in order to comply with), and therefore should not be written. Meanwhile, agency-appointed administrative law judges have gotten a reputation for being shills. I think that moving form ALJs to federal judges is far more important than anything else in reforming administrative law. If a law passed requiring the agencies to submit a codification of their rules to Congress, that same law could require the agencies to include in their codification whatever jurisdictional provisions are needed to move from administrative law judges to federal courts.
The third problem is political accountability. The agencies tend to be led by commissions with fixed terms. I think we would be better off folding the agencies -- stripped of their legislative and judicial functions -- into the executive branch, with single directors appointed by and serving at the will of the president. That way, you can at least vote against the president when things go wrong, and that president can exercise removal power over the executive branch. If you couple that with at least the chief-auditor concept, you would have someone whose job it is to point out flaws and a politician who could act on that advice.
I'd like to add that I could see a role for a small number of well-regarded independent commissions to act as oversight. These would have no power other than the power to subpoena government officials and contractors (in those capacities) and to issue reports. We have a welter of such commissions currently. I'd suggest that they not be organized to map to the underlying agencies, but instead to address specific concerns. If we are worried about government policies promoting racial discrimination, have a commission that exercises oversight on the basis of discrimination. We could have one for corruption, environmental impact, and any other themes needed. But they would have to be limited in number (something like six) or they just become another voice. I'd give each member a single, nine-year term. The member whose term is about to expire would be chair. This probably ends up being much like the chief auditor approach, but having a plethora of potentially overlapping and competing auditors isn't a bad thing when government is its target.
Max
I think the case that there needs to be a regulatory state is much stronger than the case that it needs to be dominated so much by federal agencies. Yes, there are genuinely interstate problems and efficiencies to be had from consistency of regulation across states; but is that really enough to explain the current proportion of federal vs state regulation? This matters in part because the more power is devolved to the states, the more impactful it becomes for some states to experiment with proposals like yours, which may be an easier way of getting things done than convincing federal politicians to support this sort of wonkery.
I note also that at least superficially, your proposed COO is similar to a city administrator position in a municipal government-- and some city governments have auditor offices as well, though perhaps with not such an aggressive mandate as you propose. So it's worth studying municipal experiences for lessons on how well this might work at a state or federal level.