Delegating Powers: A Transaction-Cost Approach to Policymaking under Separate Powers. By David Epstein and Sharyn O’Halloran. Cambridge: Cambridge University Press, 1999. 336p. $55.00 cloth, $21.00 paper

Extract

For decades, the delegation problem has stoked theoretically rigorous, empirically taxing work in institutional political science. The central achievement of David Epstein and Sharyn O’Halloran's book is to posit clearly a trade-off between delegating internally and delegating externally. The authors compare delegation to the “make-or-buy” decision of the firm in industrial organization theory. It is the congressional “floor” (its median voter) that delegates, with the choice of handing policymaking to its committee system (internal) or to the executive branch (external). Either “agent” is capable of specifying statutory details or of learning about policy's probable consequences in a way that would be too costly for the floor to undertake. Yet neither has preferences identical to those of the floor, and so each confronts Congress with a classic “hold-up” problem.