Michael Livermore 0:11
Welcome to the Free Range Podcast. I’m your host, Mike Livermore. This episode is sponsored by the Program on Law, Communities and the Environment at the University of Virginia School of Law. With me today is Jed Stiglitz, who’s a law professor at Cornell who focuses on administrative law and agencies. His new book is The Reasoning State, which was published by Cambridge University Press over the summer. Hi, Jed. Thanks for joining me today.
Jed Stiglitz 0:36
Mike, glad to be here. Thanks for having me.
Michael Livermore 0:39
So as you are well aware, administrative agencies play a huge role in American society, including in the area of environmental protection, which is obviously a focus of this podcast. But they also seem to be kind of paren perennially under attack from various sides. So maybe just as an entryway into the conversation today. I was just curious, your thoughts about, you know, what do you think accounts for the love-hate relationship that American society seems to have with agencies like EPA, we love them in the sense that we give them lots of power, and we expect lots out of them. But also, at the same time, politicians just seem to be able to get away with a lot of what’s sometimes called bureaucracy bashing, and it seems to play to the voters.
Jed Stiglitz 1:30
Yeah, I mean, so the mean, agencies do, like, do incredibly important things in our system of government, at EPA, and many others. And, there is this kind of dual phased aspect to the agencies where on the one hand, they’re solving problems that, really they are only equipped to solve. And they’re also, as you, as you say, constantly criticized. So I think the first part of that story is pretty easy to understand, in a sense that the agencies are doing things that other institutions could not do. So understanding the benefits of agencies, I think, is relatively straightforward. Although the mechanism, the question of like, why they’re uniquely situated, is, I think, an interesting question that my book engages with has a slightly different perspective, than I think a lot of the literature, the question of why they’re criticized is is also an interesting question. And I think there are a variety of possible perspectives here. One is that, you know, that EPA is doing things that are consistent with its mission statutory objectives, in large part, and there’s a diversity of views on those substantive questions in society. And some people have sincere disagreement with those with those statutory objectives, and, and the like, because, you know, they’re creating winners and losers by many other choices, and so the losers are going to be dissatisfied. And so could be just a disagreement on those kinds of economic grounds that could be disagreement on sort of a more ideological in a more ideological kind of way. And I think that’s a lot of what you’re seeing that agencies are doing more and more things. So naturally, they’re going to, they’re going to be attracting criticism for doing more and more things, that the more things that they’re doing, the more the more trade offs that are integrated into their actions, the more criticism they’re going to, they’re going to attract. So any other part of it, though, is that I think a big part of the criticism should be understood as a sincere disagreement about what they’re doing, and the sort of a disagreement about the choices they’re making, that are implicating trade offs that are creating winners and losers. But there’s also a great deal of what you might call insincere disagreement, as well, I think, where politicians are making something, mitt, you know, that there’s a certain segment of society that disagrees with what said EPA is doing. And I am but the politicians have an interest in generating controversy often. And so part of what you’re seeing is just sort of showmanship by politicians. And so, you know, if we were asked the question of, you know, should we actually get rid of the EPA? Could we make a commitment to that effect? I think that actually the people who would agree to that are relatively small. So those on the right are you know, EPA is one of the main agencies that people talk about getting rid of EPA. Think Perry cited EPA, energy and education. I think those were the three
Michael Livermore 5:08
and some other ones that he couldn’t remember, I think. And then he ended up running the Energy Department, of course.
Jed Stiglitz 5:14
Exactly. So that’s the irony of that situation. And that’s, that’s so exactly the politicians are always talking about getting rid of these agencies, but, but a lot of it is just showmanship I think. And, and they’re playing to the crowd and the like. And if we were actually asked, in a way that would commit themselves to getting rid of those agencies, I think that the support for getting rid of them would be much, much smaller, in fact, than it appears to be. Yeah.
Michael Livermore 5:42
So. So yeah, as you mentioned, in this book, you kind of have a different, slightly different take. And that’s slightly different, I think, a pretty substantially different take to integrate some of the earlier perspectives on the advantages of agencies, but you have, you know, you have your own perspective on it. You know, just to situate folks, you know, I think the, you know, one common response to folks, as you were saying is, like, why are agencies uniquely situated to deal with certain types of problems, like environmental protection or, you know, drug oversight, you know, developing, you know, like, the, the way the FDA does, is a question of expertise, right, like, we’re not going to we don’t want Congress making decisions about whether to authorize new vaccines, or we don’t want Congress writing detailed technology based pollution control requirements, because Congress is this generalist institution, and, you know, the folks there don’t don’t have the requisite expertise. But they your take is a little different than that, that that doesn’t, you don’t find that altogether satisfying, you know, in the book, you’re arguing that that’s not the full story, at least.
Jed Stiglitz 6:46
Yeah, I think that’s right. So the conventional story is, as you point out, that the reason the agencies are uniquely situated in our society to solve problems is because they’re more expert than, than other possible institutions, namely Congress. And I think that expertise is part of the story in at least two ways. So I guess I should probably come back to that at the end. But, but I see it, you know, I see a slightly I see, it’s not just a slightly it’s a it is a quite different perspective on what is actually unique about agencies. And the argument is that what agencies are actually uniquely able to do is to develop trust. And the way that they’re able to develop trust is through committing themselves to forms of procedural regularity, which include, importantly, reason giving, norms and requirements of reason giving, that are baked into the way in which regulatory policies are produced, as well as ex post forms of review by third parties that is, so after a regulation has been promulgated by an agency, there’s an opportunity for those who are upset by it to seek to go to a third party and say, Hey, take a look at this policy. It’s actually not justified either in terms of the statutory objectives that the agency is claiming to be pursuing, or in terms of some factual basis that is at the foundation, the policy or the like, and so on. And so through these norms and requirements of reason giving and ex post third party review, which comes typically, in the form of review by a court, that agencies are able to build trust in their policy outputs, that is not possible in other institutional settings. So at core here is an information problem. But it’s an information problem that exists as between the public or the voters, and the policy maker. So if we see a policymaker say, choose policy A rather than policy B, in a complex society, we’re gonna have a really hard time understanding or coming to assessments of whether policy A or policy B is in our best interest. And that’s the fundamental problem of distrust that exists in modern representative democracies. And, and so again, there’s a trust problem. And the way that agencies help us is by resolving that trust problem by again committing themselves to procedural regularity. And third party review. By contrast, legislatures have a lot of time committing themselves to procedural regularity. They’re always making a procedure on the fly. And they also don’t expose themselves to third party review. So generally speaking, you cannot challenge a piece of legislation and statute because it has improper factual foundations or that there is no real connection between what the legislature says it’s trying to do. And the actual policy means that it’s chosen to pursue those stated objectives. Whereas by contrast, those are really core parts of Administrative Law, where, when an agency has taken an action, we really get to sort of kick the tires on the policy to see whether the factual foundations are there to see whether the there’s actually a meaningful connection between what the agency again, says it’s trying to do and what it actually has done.
Michael Livermore 10:35
Yeah, you know, it’s interesting, the, as you said, the legislators really have a hard time committing themselves to, to procedure. And, you know, this just reminds me sometimes, I don’t know if you’ve ever had this experience, but in talking to legislative staff in Congress, we’re having to deal with legislation that deals with administrative agencies that are not significant like that. Sometimes I’ll hear them say, oh, you know, do we have to worry that there’s going to be an arbitrary capricious challenge to this? You know, and it’s like, no, you don’t, because Congress isn’t subject to that requirement. Right. Like you can’t sue, you know, Congress for you can’t, you know, seek judicial review of a piece of legislation under the arbitrary capricious standard? Because that’s a statutory standard. It’s not something that applies to Congress, it applies to agencies.
Jed Stiglitz 11:24
Yeah, that’s right. And there are people who think that there have been arguments for decades that Congress should be exposed to something like that formal review, or that there should be, it’s often referred to as some form of legislative due process where like, we’re just trying to create some regularity in the legislative domain. That is reviewable in some sense by courts. And so those proposals have been around for a long time. But my view is that courts actually can’t really, can’t really engage in that formal review. That is the courts are simply too weak to really do that on a systematic and regular basis. And so one of the interesting things is that agencies have this form of credibility by exposing themselves to forms of judicial review, precisely because they kind of fit a little bit awkwardly in our system of government. That is, if courts routinely challenged the factual basis of pieces of legislation, that they would be in a sense playing with with fire, because they are engaging with in a critical way, another institution which has, which has a firm constitutional basis in our system that has, that has a form of legitimacy that it achieves through popular elections, and the like. And I think that that is not a sustainable model of interaction between constitutional actors. And so you know, this, this harkens to Hamilton’s famous idea that, you know, courts are actually pretty weak institutions in our system, they have neither personal or sort. And so they’re really just, they have the power of their judgment and moral suasion. And that’s about it. So these weak institutions cannot review on a systematic or regular basis, congressional actions on any kind of arbitrariness like grounds. It’s not, it’s not something that would exist in a political equilibrium, I think. But again, agencies, by contrast, are these kinds of funny institutions in our system of government, they’re not sort of, obviously founded in the same way in our Constitution. And so many people suspect them, and it’s, in the end, it’s this suspect-nature that actually makes them more credible policymakers, because courts are now in a great position to engage with them in a critical, systematic and regular way, on the foundations of their actions. And so now we say, agencies, you have to actually tell us what you’re going to do. You have to give us reasons for what you’re going to do. You have to have sound factual foundations for what you’re going to do. And there’s going to be this third party that comes in and looks at everything. And that commitment is actually credible in the agency context, whereas I think it would not be in the legislative context.
Michael Livermore 14:15
So then, you know, it’s kind of a funny, ironic resolution to the question I asked earlier, which is, you know, what, what explains the love-hate relationship? It sounds like what you’re saying, essentially, is that we love them because we hate them, right, because of their uncomfortable position in the constitutional order and the suspicion that we have towards them because of issues like the attenuated relationship to electoral accountability. That’s exactly the reason why we keep giving them more and more power, which is ironic.
Jed Stiglitz 14:44
Right, there is a there is a there’s a there is an element of irony there that exactly it’s precisely their suspect nature, the fact that they’re not exposed to elections that they’re not, you know, envisioned in the Constitution in the same way that say the legislative branches and I’m or the like, that makes them eight that makes them credible policymakers that allows us to, to commit to them to forms irregularity, and third party review.
Michael Livermore 15:13
So, one of the things I really liked about this account, and is that it kind of brings together two threads and administrative law scholarship that have been around for the past several decades. So there’s, you know, when you talk about kind of reason giving, and judicial review, and oversight, these are really kind of core normative concepts that drive administrative law. These are the things that administrative lawyers think about, these are things that judges talk about, in cases having to do with administrative agencies. So it’s very kind of traditional legal. These are very traditional legal ideas that have been around, you know, since you know, for many decades part of the administrative state and discussed as part of the administrative state. And they’re very normative. They’re very kind of doctrinal ideas. And then so that’s kind of on the one hand, one branch of legal scholarship, that it’s interested in ministry of agencies, the other branch was a little bit newer, but still at this point has been around for, you know, 30 years, uses tools from the social sciences, political theory, to think about administrative agencies in a more descriptive fashion, kind of, how do they come about, like administrative procedure, just, you know, what explains administrative procedure or kind of a classic account, by a group of political scientists, they go by McNollgast, is that procedure is kind of the Ministry of procedure is at least partially a way for Congress to kind of promote its power forward and facilitate oversight of agencies and the like. So it’s kind of a political story having to do with the incentives of various political actors, and they’re kind of acting irrationally. And it’s the rational interaction of these actors with in their environment that leads to the institutions that we have, and you bring that together in a really interesting way where, you know, these the kind of provide a positive descriptive foundation for these normative principles that people have been talking about for a very long time. And so one question that I think is, you know, kind of naturally comes out of the account that you give is, like, how did we arrive at this state? You know, was there, were there some kind of smart kind of founder framer types around the, you know, the growth of these institutions in the 19th and 20th century, that we’re thinking along the lines that you describe, or was it just kind of a random process? Yeah, how did we get to this kind of happy state, where the institutions that we have kind of make sense almost as though they were rationally designed for the purposes that you describe?
Jed Stiglitz 18:01
Yeah. So. So I think thank you for pointing that out. That’s I mean, this is one of the ambitions of the book is to try to provide a new positive theory of administrative law. And you’re right that the, you know, McNollgasts have a theory, a positive theory of Administrative Law, which, again, is trying to come up with a an explanation that is not normative, but instead is more descriptive in nature, about why administrative law takes the form it does. And they’ll do things they do things like they say, Well, what, you know, what’s the role of notice? Normally we think about that as sounding ideas of due process are notions of fairness. McDonald’s would say, No, that’s actually, those are normative ideas. What’s the actual role of notice in our system? Well, it’s to promote legislative control over agencies, now agencies have to give notice about what the breath they’re about to do. And that gives time to members of Congress to mobilize opposition or the like to pay for regulatory actions. And the theory that I have in this book provides a positive theory of administrative law, that sounds in the normative commitments that would be very familiar to lawyers. So the ideas of fairness, deliberation, rationality, these are all core ideas that really are in the scenes of administrative law. And my part of the argument of the book is that these actually serve actually an important political role to well, and why well, because it’s precisely these forms of these norms of fairness, regularity, and the like that, that promote the political value of agencies that serve a critical role in developing trust that justifies the delegation of authority to them, which again, has a political role because we don’t trust Congress itself or legislatures themselves to make these choices. So where did these virtuous institutions come from? I think that the critical period to think about here is less than the New Deal when we had sort of an explosion of agencies, but again, but a period that was slightly before that, the progressive era, where we had another explosion of agencies, arguably like the initial or original explosion of agencies. And in the book, I argue that there’s a couple critical components that came into, that converged in the Progressive Era. One is that the economy became much more complex. And so now, again, if we’re thinking about policy A versus policy B, suddenly that becomes a harder thing for us to assess. Another thing that happened is that we have, for the first time in really massive companies, firms so that the scale of production increases dramatically in this period. And that is important, because now we worry more about the activities of these scaled up firms. What exactly are they doing in the legislature, and so that, again, builds distrust. And so it’s no accident that it’s at this time that we have the emergence of words, like lobbyists in our vocabulary. There had always been corruption in our system, but it became professionalized, in a way at this period. And so that helped to build distrust in our legislative institutions. And so generating an incentive to, to find some way around this problem of trust. And the third factor is related, and that is the admin and this is normally often a sort of alighted in the literature, but I think is quite important if there’s a really fundamental change in the information environment. So now we have a much more professionalized journalist class. And so here we have the muckrakers magazines like the Corps and the like, what you’re doing investigative journalism for really the first time in our, in our republican in shining light on all these abuses that existed in the legislative sphere. So again, building distrust in legislative institutions and providing an incentive for elected members to find some way around this problem of trust. And so, so what did they do, but the argument is that they were kind of just trying to muddle their way through it, to figure out ways that that relieves some of the distrust, that relieves some of the problems that the problems of distrust we’re creating, for them electorally, in terms of their careers. And so I don’t envision these members as having any, you know, I don’t see them as deities, I don’t see them as being clairvoyant, or, or the like. And so the metaphor that I think about in this context is less of them as being an engineer is trying to solve this problem. And more it’s being explorers. This feeling around for different possibilities. And figuring out like, what actually works in these to resolve these relieved the problems that we’re facing as politicians. And so it’s a much more exploratory kind of evolutionary perspective. And so the early forms of delegation did not have all the procedural forms of regularity that we later came to see in, for example, the EPA, although you often see early variants of the same procedural forms. And so one act they talk about in the book, at some length is is the Hepburn Act of 1906, where the Interstate Commerce Commission was given prospective ratemaking authority, and the kinds of procedures that are integrated there, that forms of judicial review, which are very preliminary, in a lot of ways, they’re just prototypes. But you can see members starting to figure out what might work to resolve problems of distrust, what kind of procedure should we attach to these investments in authority that we’re giving to agencies. And so you see, for example, judicial review being the agency that has been exposed to forms of judicial review, but the standards of review that courts would review the actions of agencies being poorly specified or unspecified. So that’s just one. One example. And I think, you know, railroads, I think are an interesting place to think about because they’re both a, you know, a potent symbol of modernity, that is so characteristic of this increasing complexity around the turn of the last century, that was building distrust in the system. And here, we also have some of the first administrative agencies trying to resolve these problems with prototypes of the kinds of procedures that later we became familiar with as administrative law specialists.
Michael Livermore 24:48
Yeah, you know, it’s this kind of the story that you’re telling and that this question of, you know, how do the, you know, these institutions come about how do they relate to kind of, you know, design versus equity duration. So it’s a very interesting analogy, or a metaphor maybe is, it’s almost kind of as a question about, like, what counts is good social science theory, or theorizing in a context like this where, you know, one of the things is kind of particular about the situation is, of course, there’s just one US government and it changes over time. But it’s not like there’s lots, lots of different examples that we could try to draw lessons from, we’re really studying one institution as it unfolds over time. And, you know, I could kind of imagine two different ways of trying to proceed in a sense with theorizing about the situation and it sounds like maybe what you’re doing is kind of a mixture of the two. So one is, like a rational choice kind of, kind of approach where we’d like a good theory is one that is consistent with, with rational choice. And, you know, we’re maybe put aside the details of how institutions kind of come about and through historically contingent processes, but rather, we just say, Look, you know, if we can provide, you know, in as much as we can understand these institutions as reflecting, you know, the rational choice of various actors, you know, that that’s a good way of of proceeding, you know, theoretically, this same way with, like, with respect to ignore gas was we were talking about earlier as understand these institutions is reflecting a response or rational response to the incentives of various actors, right, it’s just kind of a parsimonious way of explaining things. Another that it sounds more like what you’re describing is, you know, we can think of what actors are doing is engaged, as you said, in an exploration, there’s a search space, that they’re moving over of possible institutions that they might design, as you said, there’s kind of an evolutionary element to this, which we could say, another way of stating that is, maybe small changes are more likely than really big changes, right. And so the same way in your genome, you know, it’s not like 100 of your genes simultaneously, are going to, to mutate to create some new trait, right, all of our traits came about through very small mutations, right? That then accumulates over time. And so in a situation like that, you know, what, what I think we’re looking for is more like an, like an equilibrium, or a kind of, you know, a local settling place where we kind of find our way to, you know, a spot in this landscape, that, you know, any small step doesn’t kind of make sense. So we, you know, it’s like a gradient, we kind of walk along the gradient, we find ourselves in an area where it doesn’t make sense to move out. So. So if we think of those kinds of two ways of proceeding through as we theorize about these kinds of institutions and how they come about, do you have a? Do you see what you’re kind of engaged in as a combination of the two? Are you really firmly in the Explore camp versus the rational, the rational choice camp?
Jed Stiglitz 28:03
So I think I’ve, I mean, this is a great and a really rich, rich question. I think of the theory as being fundamentally rational choice theory, but in the sense that I’m describing how somebody might design the, you know, a system of policymaking. That is, that is consistent with the incentives and threats to their well being that they face. But I view that theory as kind of a shorthand or a summary of the forces at play. And when you zoom in, on, on, on the behavior that generates these institutions, I don’t think you see people really, you know, thinking designing something as an architect, or as an engineer, by again, I think it’s, I think that they’re facing these pressures, that, that they respond to in an evolutionary and kind of unknowing or almost unaware of kind of kind of way. And so, you know, why have this rational choice perspective? Well, I think it serves this role of explanation in parsimony, which I think are really critical roles, features of a theory. So we want to have a parsimonious theory of, of institutions. That explains why they look as they do, but we zoom in on individual actors. I don’t think that I don’t think we’re. I don’t think it’s right to think about them as behaving as designers or architects. So if we, you know, by analogy, I think there’s an analogy to market behavior here. If we think about somebody who makes cupcakes for instance, and there they turn out to be the market leader and in cupcakes you interview them, like why did you know, like, why did you make this bid? Since the decision, why did you invest in this plant to make so many cupcakes? You asked that person, they might say, Well, I was making the best cupcakes that I like that tasted much better than the cupcakes of all the competitors, without thinking through like, oh, like how exactly do we fit into the market? What? You know, how are we going to make a profit? How do we justify this investment? And the like? Often, I think, when you hear business leaders talk, it’s more than I just make good cupcakes, right. And I wanted to make more of them. And so what you’re seeing there is, is really, somebody who is similarly just feeling things out. And behaving in this evolutionary way, who we don’t hear from are the cupcake people who were making delicious cupcakes, but the market timing or their, you know, their cost structure was not quite right. And so, so they go out of business. And so we don’t hear about the failed cupcake makers. And I think there’s something like that for politicians to where we, we see the institutions that serve a function, but we don’t see so much the failed efforts, that is the people who don’t quite feel their way to the, to the right institutional setup, why we because well, they lose their jobs there. They tend not to survive in the political system. And so, it’s a shorthand, I think about, I think about the positive theory of rational choice kind of theory, where we set up the structure and explain behavior and in terms of design or architecture. But when we think about human behavior, I think they’re, I think the more evolutionary perspective is often the one that is that feels more accurate to me.
Michael Livermore 31:43
Yeah, that all that makes a lot of sense. And it’s an interesting project to envision that kind of coming to historical record for the institutional ideas that didn’t go anywhere, or that were tried out and limited form and, and failed. And as he said, we kind of observe that there’s a huge survivor bias and what we observe. So it would be interesting to do that, though, a difficult kind of undertaking. One, one question that kind of comes to mind, just going back to the, you know, the kind of core claim of the of the book about, about these norms and procedures that we have in the administrative state as a way of facilitating trust and creating a platform for credible policymaking is, you know, how much do does it does it matter if people know about this? Or how much do we think that people know about this? So, you know, if I walk up to the average person on the street, and I asked them about administrative procedure, and you know, what, you know, EPA is required to do in order to issue rulemakings. And, you know, the role of courts and, you know, notice and comment and the like, obviously, they’re gonna look at me sideways. And they’ll have, you know, most people are gonna have no idea just the same way, they wouldn’t have any idea about any other kind of specialized, you know, they’ll know something about what they know about their specialized knowledge, but they may be making cupcakes, but but not necessarily about administrative procedures. So is that a problem for your theory? I mean, there’s a huge and really interesting part of the book. Again, I should just note, you know, one of the fun things about the book is that you draw on different fields. And it’s kind of some historical narrative, and there’s a bunch of social science, modeling, but also actual experiments that you did. And so you kind of show in through this, the experimental setups, that when people kind of know about decision making set kind of context or set up, things like reason giving and review, do affect how they view outcomes, or, you know, with kind of what we might call the, their, their, the legitimacy of the decision making. But, you know, a lot of people aren’t they don’t have, you know, they don’t know anything about the administrative state and its procedures. And so I guess the question is, you know, is that a problem? Or, if not, you know, how is it that this trust function of these procedures works? If it’s kind of in the background, and people aren’t really keyed into what’s going on?
Jed Stiglitz 34:19
Yeah, so it’s a good question and a good challenge. I think that there are a couple responses. I mean, there there are, there are cases, if you look at the history of the APA, there were, there were a number of articles in the New York Times, for instance, around the founding of the APA in the late 30s and early 40s, that dealt with administrative actions and really focused on the administrative procedures that were that were used there. So I think it’s not quite right to say that like, you know, these things are totally invisible to the public, that is that procedures in a direct way are invisible to the public. And I’m And, and the like. It’s also true, as you point out that like, if people are aware of the procedures that it actually does affect their views of the legitimacy or satisfaction with the decision, and I think that that finding is quite, is quite regular. That is, it’s, it’s in my, it’s in my experiments, and it’s also present in the literature more, more broadly. So one thing is yes, they do, you know, newspapers and the like, do report on procedures, and the public seems to be responsive to this. That’s, that’s one response. Another response, though, is the there’s just happens in a more diffuse way. So that even if the New York Times is not reporting on it, that on the particular procedures that are employed, that there’s a diffuse sort of legitimacy that occurs over time. So somewhere like the New York Times, the reporters themselves, for instance, New York Times may be observing the regulatory action. And the reporters will, you know, even if they’re not articulating in their stories, the procedures that are used, they are aware themselves of the procedures. So they know, for example, that there is a notice and comment process. In fact, many of the articles will cite to the comments that are issued in the course of regulatory proceedings as a foundation for the article itself as a substantive foundation for the article itself. So the authors of the articles are aware of the procedures, and they just like, you know, just like the respondents my experiments, or that you see referred to in the literature, more broadly, the just like, the response, my experiments are positively affected by the procedures, the authors to have the New York Times stories, and other journalists will be affected by the, by their knowledge of the procedures. And, and that will transmit in subtle and diffuse ways that build over time into the stories that they write. So I think it’s a good challenge. And I don’t, you know, I think that it’s, it’s, it’s a little bit hard to pin down like, well, you know, what exactly, is the the connection between the procedures and beliefs, because in many times, the beliefs about legitimacy are not connected directly to procedures, but instead, transmit through the sort of diffuse networks. But I think that that’s, I think that that’s kind of how it operates.
Michael Livermore 37:33
Yeah, it’s interesting, and, you know, kind of puts me in mind of another situation. So there’s, you know, in, in rulemakings, these days, at least, some of the time not most of the time, not for most rulemakings, but occasionally, you know, agencies will do a high profile rulemaking, the Obama administration’s Clean Power Plan to control greenhouse gas emissions from, from the electricity sector, the various iterations of rules to deal with, with internet governance and net neutrality that we’ve seen over the years. Sometimes those kind of catch the public eye, and we see what are sometimes referred to as mass comment campaigns, where advocacy organizations go out, and, you know, try to get people to write submit comments into the EPA or to the, to the FCC, and, you know, so So, so some people actually are very, you know, skeptical about these campaigns, they kind of, they worry that it creates a false impression amongst the public that you know, that there’s like a vote that’s happening. You know, and there’s a question about what agencies should do with these comments, which are mostly kind of not of the technical, the sophisticated variety. And so, you know, it’s done honestly presenting the agency with new information or anything like that, which is the debate that you’re familiar with, in administrative amongst administrative law scholars about what to do with these comments. But there’s another story here, which is, you know, maybe they’re doing the work of the administrative state by going out and just informing people that they can submit comments, and then just by alerting people to this kind of feature of the, of the procedure for administrative decision making, they’re actually kind of inadvertently shoring up the legitimacy of the institutions, even if they disagree with the substantive content. So they don’t like the SEC rulemaking. They go out. They tried to get comments, but it actually turns out that by even soliciting comments, and alerting people to the procedure, they’re actually increasing the legitimacy of the final decision.
Jed Stiglitz 39:42
Yeah, I like that. I like that quite a lot. That’s a that’s a really interesting take on mass commenting which you’re right. The literature is pretty skeptical of, you know, viewing it as either useless or distraction waste of time, or just like a basically cynical effort by interest groups to raise money. ate through these campaigns. But I think you’re right, there’s this, this, this aspect of just raising awareness of the procedures that are available through agencies. I mean, the other thing I should have added to the last comment was that even though the procedures that are used by agencies may not be well known by members of the public, the fact that agencies are subjected to judicial review is pretty well known. And so we’re constantly hearing stories about agency actions being being set aside for one reason or another, and flawed reasoning, inadequate foundations, factually, for their, for their efforts, or the like. And the public will have, I think, a sense of that. And judicial review itself is really supported in a fundamental way by the procedural regularity that exists at the agency level. So if we imagine removing the procedures, judicial review itself would become much more difficult. And the public, I think, would have a, you know, detect that over time in a diffuse kind of way.
Michael Livermore 41:06
So one of the kind of implications of the story that you’re telling is, man, it’s really kind of straightforward implications that there’s a lot of value that we’re getting with the administrative state gets out of procedure. And, and that not just the Minister of State, but just our democracy, in some sense, that would just be very difficult for anyone to engage in policymaking if there weren’t some way to create these kind of procedurally constrained agency actors, not to the agencies, I guess, but some actor out there in the environment that’s constrained in this way. And that, you know, facilitates democratic action in some in some sense. But that doesn’t necessarily mean more procedure is good. Always right. And so I think, and right now, of course, there’s a pretty substantial debate both amongst legal academics but also within the broader public public policy circles as well, about exactly this, that we’ve over proceduralized administrative decision making, it’s too hard to do anything we have the National Environmental Policy Act makes it impossible to cite anything we can no one can ever build anything because, you know, there’s just so many hoops to jump through, you know, agencies can’t can’t make any decisions, or presidents come into office, and they can’t get anything done. Because it takes so long. And you know, that’s a problem because it, you know, makes it impossible for the electorate to have its wishes vindicated. And then people, frankly, I think, a little silly, but people still nevertheless do kind of look to outside the United States, to states like China, and will argue, well look at isn’t that wonderful, they can create a high speed rail, and you know, so easily, and if they want to build the city, they build the city, and if they want to tear down a neighborhood, they tear down a neighborhood, and, and then they look with some envy at these at these states. In you know, compared to the US where, you know, we’ve been building the, you know, the new subway line on the East Side of Manhattan for the last 50 years. And, you know, we can’t build anything in San Francisco. So there’s tremendous, or at the state of California, so there’s tremendous housing crunch and limited supply, leading to high prices. And so, you know, how do we, you know, how do we get to that? How do we get to the Goldilocks level? How do we know, you know, is it just a question of an amount of procedure? Is it some procedures are more important or better than others? And, you know, where are we are we are we at the too much point, are we, you know, or, you know, again, in light of the critiques of the regulatory state, you know, do we not have enough procedure? Or do we have the wrong procedures?
Jed Stiglitz 43:58
Yes, I think you’re pointing to a really rich, again, set of the set of issues here. So I think you’re right to say that part of the theme of the book is that, that agencies, even though they’re not democratic, fit into our democratic system of government in a in a in a way that we shouldn’t necessarily be. Be sorry about that is like we shouldn’t worry too much about the fact in my view that agencies are not Democratic that or not, at least in the sense that they’re not, you know, that we don’t elect that we don’t elect the people who are making decisions agency level, because again, they’re fitting into our larger democratic system of government in a really critical in distinctively useful way that promotes representative government, large, you know, broadly understood. I also think that you’re right that there’s a procedure is political in a fundamental kind of way that the procedure, I tell my students the procedure substance barrier is very permeable. And, and, and I think that’s, that’s quite right. And so you can certainly have too much procedure or too little procedure. But one thing we shouldn’t do is also on the other side of things is, is apologize or worry too much about the fact of procedure because precisely is to the procedural regularity that the really, that is distinctive about administrative agencies that makes them special in our system of government. And that allows them to fill out their the role in our representative system. So we have to have, in my view, some procedure, and we shouldn’t apologize for having some procedure. There’s an effort to radically deep procedural eyes things along the lines you’re suggesting. And my argument is that that actually may be beneficial in the short term for people’s for your objectives. But in the long term is not going to be there’s not going to support your objectives, because that will undermine what is fundamentally distinctive about the administrative state and its political value in our system. So procedures arise, then over time, we end up with less delegation of authority to those agencies. So the procedure was really critical to the foundation of the administrative state. That said, you can certainly have too much procedure and, and so precisely because procedure has implications for, for substance, there are going to be people who and we have many instances of people advocating forms of procedure in a kind of cynical way where it’s not designed to resolve the problems of distrust that are the foundation of the project that I worked on. But instead of really, the objective of injecting these procedures and into the administrative process is, again, not to not to resolve problems of trust, but instead to gum up the works in a sense and to prevent the agency from doing anything. And so that is something one has to has to guard against. And, you know, I think that over time we’ll have a political response, if that is the dominant mode of procedurals ation. Right now, I think we’re in the we’re in a kind of funny place where we have too much procedure in some ways, that is the the the forms of the, you know, judicial review has, in some cases, produced such strenuous analytical requirements, that agencies have a really hard time getting much done. On the other hand, we have too little procedure in some ways, too. So that agencies as they’re responding to these requirements to, to, to amplify their analytical apparatus and the like, they’re shifting out, there’s trying to shift into modes of policymaking that are less exposed to judicial review. So for, you know, one of the, one of the forms of policymaking that has become really quite salient recently, has been the use of guidance documents by agencies, these guidance documents are not formally understood. They’re not formally understood, creating new legal rights or obligations, they’re, instead of just telling the public, you know, here’s some pre-existing legal right or obligation, here’s how we interpret it, think about it, plan to enforce it, etc, in a non binding kind of way. But the reality is that these guidance documents are often effectively, kind of creating new policy, and that is creating the legal rights or obligations. And, and so that’s an adaptation that agencies have made to the fact that, that, that they’re being over proceduralized on on some other dimensions. And, and so in a sense, we have put too much procedure and too little procedure at the same time, right now. And so it’s a and these are both messy political responses to the fact that procedure is that the procedure substance barrier is very permeable.
Michael Livermore 49:12
I think this is kind of a, you know, related, you know, kind of, from the last point, but certainly with respect to that kind of procedure substance barrier, is, I’m curious your thoughts on the relationship between procedure and politics. So, you know, a classic distinction in administrative law is between politics and administration. Right. And there was a time when, you know, that was thought to be a divide that was meaningful. And, you know, on one side was kind of political decision making that should be left to electoral, you know, officials in Congress. And then, you know, what got delegated over to agencies was just kind of purely administrative decisions that were technical or expertise driven and not political. And of course, we now have known for decades that that does that divide doesn’t really make sense in the sense that, you know, administrative decisions on questions like, you know, how to whether and how to regulate greenhouse gas emissions, or, you know, even something like whether a vaccine should be approved or not. There’s gonna be values, choices that are embedded in them. They’re not purely empirical questions. And so. So do you see? So one way that someone could imagine would tell the story would be well, procedure is how we protect that administrative does we protect administrative decision making from politics, but through proceduralization. And that’s why we can trust agencies to make decisions credibly, because we’ve created a mechanism to insulate agencies from political influence. That would be kind of one version of the story, you know, and complete alternative version would be, we’ve made a big mistake by trying to keep this distinction and and defend the border between politics and administration. And we actually just should recognize that agencies are subject to political oversight. In fact, agencies should be able to make reference to their political directives. I mean, that’s a good idea that’s been circulated to agencies to say that President told me to do it, that’s why I’m doing it and that courts should accept that as a kind of reason. So yeah, so So these are all kind of debates that we’ve been having for a long time administrative law. I guess the question is, you know, do you see that your book and your project is as shedding light on what’s going on in the administrative procedure? You know, sorry, administrative politics distinction, or, you know, the administrative administration, politics procedure Nexus, you know, what, why is there a reconfiguration there? How should we think about those things?
Jed Stiglitz 51:51
Yeah. So I mean, I just, I guess I’m, perhaps somewhere in between these two polar possibilities? In the sense that I don’t see the book. You know, I see the book is arguing against the idea that it should just be politics all the way down, or that we should accept that or think about that as a viable possibility. I also, though, want to argue against the idea that it’s just a sort of technocratic endeavor to. And so, you know, I see the critical role of agencies in our system is to effectuate statutory objectives. And, and so it is critical for me is that is that positive act of enactment? That is, the positive law plays a huge role in the normative structure of the thesis. That is, this is the way in which we should, you know, orient our arguments around this are the statutory objectives that are articulated through these enactments. And that is going to be you know, the creation of those statutory objectives is an admittedly purely political kind of enterprise. But it is one, I want to argue that that is relatively well regulated by the political system, because statutory objectives, if they’re done in the right way, you’re going to be formulated at a pretty high level. That is, that is parsable by the public, and for which members can be held accountable. at the agency level, then there’s also a role for politics, but it’s a form of politics, that is, that is regulated by the statutory objectives. That is, it’s not just a freewheeling kind of throw society into some kind of administrative process with, you know, all the different stakeholders having some input in an open ended way and coming up with a policy decision. Instead, it’s a, it’s a process that is governed by limited statutory objectives. And so there’s going to be a lot of fighting and disagreement. And you might say, politics, about what the statutory objectives mean, and how they apply to various contexts and the like, but again, it’s all limited and regulated by the fact that those objectives exist. And so the legitimacy or the appropriateness of an agency action should not be read against the idea of a right against the benchmark of, you know, was it a democratic process, but instead, how good was the normative question or query of interest should be instead, how well did the agency effectuate the objectives that it was given under the statute with under what and there’s certainly a role for politics there, but it’s it’s it’s not a democracy first kind of perspective. Democracy happens but it’s more in the objectives. Orientation.
Michael Livermore 54:52
So I guess what my one question I would have as a kind of follow up to that. is there’s gonna be cases where the statutory objectives. I mean, they’re often very broad, as you know, right. So, you know, the SEC, just to take, you know, some concrete examples, the, the SEC is, you know, ongoing rulemaking on the kind of information that it was going to require about about climate change risk and how something like that fits up with, you know, the broader statutory objectives that the SEC is, is trying to vindicate or, you know, the Environmental Protection Agency’s deciding, you know, how to implement the national ambient air quality standards and whether to update them, you know, in light of new information about particulate matter pollution, and the statutory objective there is to set the standards in such a way as to protect public health with an adequate margin of safety. And, you know, what does that mean about whether PM 2.5 should be set at you know, X, Y, or Z parts per million? So in light and, you know, these says the centuries actually can themselves just be incredibly contestable and in fact contested, you know, regulating greenhouse gas emissions under the Clean Air Act, whether the Clean Water Action, you know, what the jurisdictional boundaries around the Clean Water Act should be? I mean, just, you know, we can come up with 1000 examples to us if you gave us enough time, right. So. So then I guess, to how does that reality fit in with the model that you’re describing? So yes, there are these statutory objectives. But they often require in order to vindicate them, values, choices to be made on the details of implementation, how to set where to set the next web, you know, how to set the jurisdictional boundaries around the Clean Water Act, you know, whether to require disclosure of climate risks, you know, how to deal with internet governance, and whether there should be a net neutrality rule for wireless as well as what you know, whatever. So. So then, yeah, so So, so in light of that, right, and then the place that you want to put on the, how much help is the positive while giving you there? I guess, is the question in light of the open nature, or the open textured nature of the question that the agencies are often dealing with the questions that they’re dealing with.
Jed Stiglitz 57:18
So it’s gonna, it’s going to place some constraints on it, there’s gonna be a huge range of discretion through a unit and that range of discretion is defined by the set of policy particulars that are justifiable, in light of the relevant facts and statutory objectives. And that is going to, then there’s gonna be a huge range of discretion there, often, and, but it is a, it is a limited range of discretion. And if we think about the book is called The Reasoning State, if we think about the unreasoning president, President Trump, you know, he ran into continuously the fact that, you know, this is actually limited range of discretion. And so, if we look, historically, the rate at which agencies are affirmed in the courts is something like, you know, two thirds to perhaps three fourths of the time, agencies want their actions affirmed when they’re challenged. And for him, it was basically the reverse. That is President Trump would try to do something through an agency. The agency would do it terribly in some way. That is, it would, it would have the, you know, the foundations that the factual foundations of the proposed the rule that they were trying to implement, or the action they were trying to take, were flawed, or they were outside of their statutory objectives, the meaning of the statute, or the like, and, and so for Trump, the aren’t reasoning, President, the the ratio was basically flipped, and so roughly three quarters of the time he was losing in court actually, and, and so that I think, demonstrates that this is not an unbounded range of discretion, that there are real limits that are imposed by the reasoning state and they bind in a in a meaningful place.
Michael Livermore 59:10
Yeah, really interesting. And it’s this, you know, it’s I’ve made some kind of similar arguments in other in a totally different context. But you know, this notion that what the administrative state doesn’t some Broadway’s provide guardrails or constraints, and then that there is a legitimate role for values or politics, but then but it’s not it’s not unbounded, as you said.
Jed Stiglitz 59:32
Yeah. It’s within the, the politics the and the like, these debates occur within the bounds that are created by statutory meaning and and there’s a lot of room there for legitimate debate. There’s, there’s not a mechanical exercise, but they’re all but it’s a bounded exercise. Great.
Michael Livermore 59:50
All right. Well, you know, we could obviously keep chatting about these these issues, when you’re probably indefinitely but we’re basically at a time so Um, you know, thanks. Thanks for joining me today has been a really interesting conversation. It’s a great book. People should definitely read it, pick it up and read it. It is. It’s really fascinating and an important contribution. So, so thanks. Thanks again. Chet.
Jed Stiglitz 1:00:13
Thank you so much for having me Mike. Really, really enjoyed the conversation. And listeners
Michael Livermore 1:00:17
if you enjoyed this episode, let us know. You can give us a like a rating subscribe to the podcast and follow us on social media. It’d be great to hear from you till next time
Free Range Podcast 