Title

Rethinking Regulatory Democracy

Abstract

This article empirically examines democratic participation in three different regulatory proceedings, involving financial privacy, nuclear regulation, and campaign finance. It then uses that analysis to critique -- and suggest alternatives to -- existing mechanisms to achieve public participation in the regulatory state. The current mechanism for structuring public participation in regulatory decisions (or “regulatory democracy”) relies on demand-driven procedures like the Administrative Procedure Act’s notice and comment process. Organized interests and others who decide they have sufficient resources and interest to do so comment on regulations. While some observers consider this process close to ideal, others instead seem to accept the current approach only because it appears to be a reasonable compromise adequate for an imperfect world. Under this “compromise acceptance” view, current procedures seem easier to accept in light of certain empirical suppositions, such as that regulatory problems can be resolved through application of technical, scientific expertise, that individual members of the public tend to lack interest in participating in regulatory policymaking, and that even if they had such interest, they would add little to a process already informed by the views of organized interests. Drawing on an empirical analysis of thousands of public comments in these three regulations, as well as a rich empirical literature in political behavior, I show many of these suppositions to be questionable. (1) Comments from individual members of the public make up a substantial proportion of total comments about some regulations, showing at least some potential public demand for participation. (2) Dramatic differences exist in the sophistication of comments from organized interests and those of individual members of the public. (3) That deficit in sophistication independently affects the probability an agency will accept suggestions in public comments even when controlling for differences in commenter identity. (4) Interest groups do not always raise the range of concerns raised by comments from the lay public. (5) The larger public’s interest in a particular regulation and sophistication to take part in discussing it are both themselves shaped by the process used to consult that public. All this hints at a rich set of possibilities for alternative institutional designs to achieve regulatory democracy. I discuss two such approaches here. Both involve constituting a small group of people whose discussions can inform the regulatory process, and appointing a lawyer to serve as a “regulatory public defender” responsible for articulating their views to the agency. Participants can be either selected by lot from the entire population (a majoritarian deliberation approach), or chosen from among constituencies (such as outside experts) who may be especially impacted by the regulation but are essentially unrepresented (a corrective approach). Given that neither the public’s sophistication nor its interest in an issue are fixed, the new approaches can generate valuable information about what informed citizens think of regulatory proposals. These mechanisms can provide regulators with valuable information about what makes a new law acceptable to the public. Many of the technical challenges could be solved by creating a separate agency to implement reforms in regulatory democracy, though questions arise about sampling to select participants, framing the issue, and providing representation to the views of the group. Instead, the larger challenge to the reform of regulatory democracy is a political economy that strongly -- though not inevitably -- favors the status quo. I close by discussing three scenarios where reform would be easier to achieve.

Disciplines

Administrative Law | Banking and Finance Law | Energy and Utilities Law | Law and Politics | Legislation | Public Law and Legal Theory

Date of this Version

September 2004