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Article

Abstract

The “public choice” model of the administrative state posits a federal regulatory structure that is dominated by the private entities subject to its policy proscriptions. The formidable advantages in resources and focus enjoyed by the these private entities leave governmental units, like agencies and legislatures, with little realistic chance to resist agency capture and avoid implementing the policy objectives of the parties whom they are charged with regulating.

As theoretically powerful and practically descriptive as this model is, there is one significant question for which it fails to provide a satisfying answer—why, if regulated entities enjoy a strangle-hold on the federal policy making process, do new and rigorous statutory and regulatory requirements, which are contrary to the interests of powerful regulated entities, ever appear? This article answers this question by analogizing this model with the theory of biological evolutions presented by Niles Eldredge and Stephen Jay Gould in their work The Dynamics of Evolution: The Punctuated Equilibrium Debate in the Natural and Social Sciences. Eldredge and Gould challenged Darwin’s theory that biological evolution happened gradually, and regularly, over long periods of time, concluding instead that the great majority of species appear suddenly in the fossil record and then persist mostly unchanged until their extinction. Species evolution is much more often the product of dramatic quantum shifts over relatively short periods of time than the kind of gradualism envisioned by Darwin. They referred to this evolutionary dynamic as “punctuated equilibrium”—long periods of relative stasis (“equilibrium”) interrupted and re-defined (“punctuated”) by rare but dramatic instances of evolutionary change.

The kind of status quo reinforcing stasis envisioned by the public choice theorists is quite real, but applying Eldredge and Gould’s model to an assessment of the evolutionary mechanisms at play in the administrative state, demonstrates that it can be broken, and genuine policy innovation can occur in the wake of dramatic public events. These dramatic events, or “punctuations,” alter the factors that produce private interest dominance of policy-making, if only briefly and confined to specific policy areas. Some dramatic events, commonly observed and productive of the right kind of public narrative, serve to alter, if only briefly, the static dynamics which allow for private interest “capture” of legislative and regulatory entities. This occurs when dramatic events intensify public focus on particular policy questions and enhance the possibility that the inherent advantages enjoyed by private regulated entities in the process of policy-generation can be reduced. Regulatory innovation is most likely to occur and to have a lasting impact under this model when a cohesive yet nascent political movement advocating for a particular change is already in place, poised to take advantage of the circumstances.

Part II of this article provides a survey of major theoretical approaches to the administrative state and its development including the “public interest” theory and the subsequent critique offered by public choice theorists. The public choice theory is conceptually powerful, but lacks of a readily apparent explanation for regulatory change in the stasis-predicting model.

Part III offers an explanation for the phenomenon of significant regulatory change over time employing the punctuated equilibrium theory as a model, arguing that dramatic events, under the right circumstances, can serve to energize and focus the political will of enough of the general population (and enhance top political power of advocates for the “public interest”) to undermine the advantages usually enjoyed by regulated entities and relieve their strangle hold on regulatory agencies enough to allow for genuine regulatory change.

In Part IV, the Article focuses on just two of these evolutionary events: the Triangle Shirtwaist Factory fire in New York in 1911, and the Mississippi River flood of 1927, in order to flesh out a punctuated equilibrium model for regulatory change. It compares these events and their impact to another dramatic disaster during the same period, the explosion and fire in the coal mine at Monongah, West Virginia in 1907, that did not foster a measurable change in the status quo for regulation. The comparison sheds light of the factors and circumstances that can turn dramatic events into lasting regulatory and policy evolution.

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