Competition Between Courts and Agencies

During the late 19th century, a major reason for the creation of bureaucratic administration as an alternative to judicial administration was Congress’s determination that courts and the legal process did not implement statutes the way legislators wanted them executed. The rise of bureaucratic administration gave rise to institutional competition between the executive and judicial branch. As with market competition, however, it is not the competitors who benefit from competition but the consumer.

In this case, Congress is the consumer. Today, Congress has a choice whether to implement a statute through the legal system (that is, through a system of prosecutors or private litigants overseen by judges), or bureaucratically through the executive branch, with judicial oversight at one or two removes.

The ability of Congress to choose between administrative systems weakens the separation-of-powers system. Congress can choose which system of implementation best suits its desire for control and well as for policy. From Congress’s view, the two administrative systems rival each other.

When, as it must, a Congress empowers another institution to implement rules it creates, it faces a necessary principal-agent problem. There is always the possibility that either judges or agency leaders will pursue policy goals divergent from the legislature that authorized their power in the first place.

The politics of choice existed from the start of the rise of the modern administrative state. For example, the debate over the creation of the Interstate Commerce Commission, the first major regulatory agency, in 1887 centered on influence over legal and administrative outcomes. Two competing bills, the Cullom and Reagan bills, called for different enforcement mechanisms. The Senate supported the Cullom bill, which proposed enforcement by a commission, because Senate confirmation of commissioners would presumably nudge administrative outcomes toward Senate policy preferences. The opposing coalition supported the Reagan bill and enforcement through the legal system because they feared the Senate, and thus the railroads, would have too much control over the commission.

This element of legislative choice over which system of administration to use for statutes is often overlooked. When we discuss “delegation” we tend to think only delegation to the executive bureaucracy. More subtle, but no less real, is congressional delegation to the judiciary. And this isn’t just implementation and administration, Congress can impel judicial policy-making by writing more rather than less ambiguous laws. This is delegation to the judiciary.

While Supreme Court decisions, particularly decisions related to constitutional law, obsess scholars (and I include myself here), the day-to-day work of the judicial system comes in the thousands of trial and appellate courts, as the legal system implements and administers legislative enactments. Considering all of the trials at the national, state, and municipal level, the role of the judiciary as an administrative system certainly rivals bureaucratic administration, and may still dwarf it depending on the measure and the policy area.

Normative considerations aside, the political dimension of congressional delegation also helps explain some puzzles. For example, a standard account of the rise of bureaucratic administration is that it resulted from the need for expertise in implementing policy, expertise a legal process staffed with generalist judges and generalist lawyers could no longer supply.

This cannot explain the development of the administrative state in the 20th century. Akin to the arguments for bicameralism in which one chamber is peopled with individuals with more knowledge and expertise than those in the other chamber, it begs the question, why not just legislate using the really smart chamber? So, too, if the cause of the rise of bureaucratic administration rests on its expertise, then why does Congress continue to choose to administer laws through the legal system? If the bureaucracy is staffed with experts and the legal system with generalists, why not always implement through a bureaucracy? Something else must be going on than mere technocratic concerns.

That the bureaucratic state arose due more to political calculation than technocratic expertise, that Congress delegates to agencies when they are more politically compliant with congressional preferences than the judiciary, and delegates to the judiciary when the opposite occurs, only magnifies the separation-of-power concerns associated with the rise of the administrative state.