A Theory of Strategic Oversight: Congress, Lobbyists, and the Bureaucracy

David Epstein and Sharyn O'Halloran

The Journal of Law, Economics, and Organization, 1995, vol. 11, issue 2, 227-55

Abstract: This article develops a formal model of interest groups and congressional control of the bureaucracy. It shows that, even when interest groups act strategically, lobbyists can facilitate Congress's oversight role. Our results indicate that lobbying can help reduce informational asymmetries between Congress and the bureaucracy, and that the mere threat of sounding a "fire alarm" can result in policy concessions for interest groups. We demonstrate that agencies often moderate their proposals to obtain interest-group support, that interest groups will be truthful in their endorsements even with no explicit penalty for lying, and that lobbying can reduce the uncertainty surrounding policy outcomes. Moreover, when multiple interest groups lobby Congress, legislators make oversight decisions based on the range of moderate groups that support the agency's actions. Thus they can control administrative agencies by observing the dividing line between interest groups that support the agency's proposal and those that oppose it. Copyright 1995 by Oxford University Press.

Date: 1995
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