Legislative Allocation of Delegated Power: Uncertainty, Risk, and the Choice between Agencies and Courts

This paper contributes to the positive political theory of legislative delegation by modeling formally the decision calculus of a rational legislator who must choose between delegation to an agency and delegation to a court. The model focuses in particular on the legislator's interest in diversifying risk, both across time and across issues, and her interest in avoiding interpretive inconsistency. The model emphasizes an institutional difference between agencies and courts that the extant literature has generally neglected: Agency decisions tend to be ideologically consistent across issues but variable over time, while court decisions tend to be ideologically heterogeneous across issues but stable over time. For the legislator, then, delegation to agencies purchases inter-temporal risk diversification and inter-issue consistency at the price of inter-temporal inconsistency and a lack of risk diversification across issues, while delegation to courts involves the opposite trade-off. From this basic insight the model derives an array of comparative statics regarding the conditions under which rational legislators would tend to prefer delegating to agencies over courts and vice versa. These results imply hypotheses as to how real-world variation in political and policy-specific variables, as well as variation in characteristics of judicial and agency approaches to statutory interpretation, may affect legislators' preferences regarding allocation of interpretive authority.