The Importance of Bureaucratic Hierarchy: Conflicting Preferences, Incomplete Control, and Policy Outcomes

Jinhee Jo and Lawrence S. Rothenberg

Economics and Politics, 2014, vol. 26, issue 1, 157-183

Abstract: type="main" xml:id="ecpo12032-abs-0001">

Existing theories of legislative delegation feature spatial models in which a principal chooses a single agent to whom to delegate authority. In the canonical model, the ally principle holds – the principal picks the ideologically closest agent. However, elected politicians typically decide whether to delegate not to an individual but to an institution, which consists of many individuals with differing preferences. To improve on existing work, we model delegation with bureaucratic hierarchy. Our results show that hierarchy is sufficient to undercut the ally principle. Indeed, capturing the logic of delegation and its results requires incorporating agency structure, especially the costs of an agency head controlling her subordinates resulting in incomplete control, as different structures are associated with different policy outcomes even when the same people constitute a bureaucracy. We also demonstrate that integrating hierarchy has important implications for a wide range of considerations, such as agency structural choice and the measurement of agency ideal points.

Date: 2014
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