Debiasing regulators

Abstract

Behavioral economics has revolutionized American legal scholarship in many areas of law, but not in administrative law, the law that regulates the regulators. This article theorizes that the administrative law doctrines developed by the Supreme Court of the United States strikingly resemble a system of ‘debiasing’ devices developed to counteract bureaucratic and judicial behavioral failures in just the areas that they matter most. A strong, alternative, justification may thus exist for the enduring paradox of American administrative law that administrators should be prepared to have their substantive decisions scrutinized by ‘hard look’ reviewing courts, while judges should be ready to defer to agencies on questions of statutory interpretation.

Behavioural insight and regulatory governance

“…This can happen when there is a system in which civil servants leave during political power shifts, voluntary or required rotation between different government posts, or when there is simply high turn-over due to the relatively low desirability of public employment in certain contexts -whose desirability has been falling in many cases. In the United States there is an increase in regulatory staff turn-over after changes in presidential administrations (Doherty, Lewis and Limbocker, 2016 [106]) and an increasingly high level of turnover more generally (Hur and Hawley, 2020 [107]). In the United Kingdom, the Financial Conduct Authority faced an annualised staff turn-over of 12 percent in 2013 with speculation that this increase in turnover was related in part to the division of a single regulatory agency (the Financial Services Authority) into two (the Financial Conduct Authority and the Prudential Regulation Authority) (Slater, 2013[108]).…”