A Theory of the Choice of Regulatory Form

Various pieces of federal legislation attempt to regulate hazards associated with chemicals, food additives, drugs, consumer products, pesticides, airborne and waterborne pollutants. This legislation spans many decades and varies in the kinds of regulatory mechanisms created and in the degree of discretionary authority granted to regulatory officials. The stated goals of this legislation are to identify and prevent significant health and environmental hazards before they become widely dispersed throughout our society and economy. Despite their seemingly broad and straightforward congressional mandates, however, implementation of these programs has been slow. In this paper we will present a model of governmental regulatory choice. The model is based upon the behavior of institutional actors in the decision process—legislators, bureaucrats, and interest groups. The model will relate the institutional motivations of these actors and the influence of environmental factors, such as decision uncertainty and group conflict of interest, to the choice of regulation. It will be deduced that increased uncertainty over the impact of proposed regulations will induce the legislature not only to delegate the choice of regulation to an administrative agency but also to provide the agency with increased substantive discretionary authority and increased procedural decision making requirements. Conflicting interest group p references, for a given level of uncertainty, will reinforce these tendencies. The model and these results will be employed to develop a systematic explanation for the performance of environmental, health and safety regulation. A few illustrations are presented to explore the validity of this explanation.