Steven P. Croley's critique of public choice theory

Steven P. Croley's critique of public choice theory

Introduction

Steven Croley, a professor of administrative law at University of Michigan Law School, has written an ambitious and valuable book. It offers a strong defense of the American regulatory state and the role of administrative procedure in encouraging good regulatory governance. The book should be illuminating and useful for political scientists and legal scholars interested in regulatory policy, the politics of regulation, public administration, and administrative law. REGULATION AND PUBLIC INTERESTS would be an excellent book for graduate courses in any of those fields.

Steven P. Croley's critique of public choice theory

The central assertion of REGULATION AND PUBLIC INTERESTS is that the influential, interest-group-domination picture of regulation and the regulatory state that has been painted by “public choice” theorists is conceptually and empirically flawed. The regulatory process in the United States, Croley argues, and argues well, quite often serves the public interest rather than private interests. The public interest often is vindicated, Croley claims, because of the pluralistic, transparent, evidence-based administrative rule-making process that is mandated by the rules and principles of American administrative law.

Nowadays, Croley laments, “confidence in public regulatory institutions . . . is widely dismissed as [unrealistically] idealistic” (p.9). That cynical view of regulation, he suggests, stems from what he claims is the near hegemony of the public choice theory, originally put forth by University of Chicago economist George Stigler (1971, 1975) and cited by many legal scholars, political scientists, and critics of regulation from both the political left and political right. Croley summarizes that “cynical view” as follows (p.9):

The combination of elected legislators who require economic resources to maintain their positions, on the one hand, and regulatory agencies that . . . depend on the legislature for political and budgetary resources, on the other, provides a recipe for a regulatory state that works to advantage well-organized yet narrowly focused political interest groups - 'special interests' . . . . Such groups exchange economic and political resources for what are essentially regulatory rents. Regulatory institutions deliver those rents [because they are dominated by the legislative interests that oversee and fund them].

Part I of REGULATION AND PUBLIC INTERESTS offers a lucid exposition of this public choice theory, outlining its basic assumptions and claims. But Croley also makes a strong argument that those assumptions - ranging from [*641] the invariably lopsided array of interests that contend over regulatory policy to the motivations of legislators and agency officials - are empirically implausible as general propositions, obviously contradicted by many significant regulatory policies and rules.

Against the public choice theory, Croley pits what he calls “administrative process theory.” Most regulatory statutes, he points out, delegate a wide swath of policymaking choice to a specified administrative agency. And one key step in the public choice theory is that “agencies advance the interests of potentially powerful interest groups” - not only because those groups' organizational advantages allow them to exert influence on legislatures” but also because “legislatures in turn are ...