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How does the informational role of interest groups interact with institutions when politicians seek to control the bureaucracy? In 1992, Banks and Weingast argued that bureaucrats hold an informational advantage vis-à-vis political principals concerning policyrelevant variables, and that when it is prohibitively costly to audit, the agency may over- or understate the extent of a public problem. This is less likely to happen if there is a low-cost monitoring technology and if interest groups can monitor the agency's choices. I test this hypothesis using data on bureaucratic statements that estimate the importance of a number of hazardous waste problems from a group of state-level environmental agencies. The results provide evidence for the Banks-Weingast hypothesis. [ABSTRACT FROM AUTHOR]

This study defines and compares three broad theories that seek to explain bureaucratic preferences. I first argue that each of these explanations is complex -- that no single measurable attribute encapsulates the entire theory. Second, I argue that these explanations are non-nested -- that al least one attribute representing a given theory cannot be expressed as resulting from attributes that representing one of the other theories. Based on the theory of comparisons of non-nested models, I assess these three competing explanations with the Likelihood Dominance Criterion, an approach for assessing the total explanatory power of a given theory relative to that offered by other theories. The comparisons take place in the context of the bureaucratic implementation of policies governing the remediation of hazardous waste at the state level in the United States. The comparisons show that bureaucratic preferences are best explained by the organizational capacity and constraints explanation rather than more proximate political and task environment theories. In total, the agency's rules, capacity, and characteristics form a better total explanation of the observed variance in bureaucratic preferences than either proximate state politics or the agency's task environment. [ABSTRACT FROM AUTHOR]

In contrast to principal--agency theory, the possibility of the political control of the bureaucracy depends on bureaucratic structure. In this article, I argue that the functional decentralization of responsibility and authority for policy formulation and implementation involves a net loss of political control. I show that the choice by the Nuclear Regulatory Commission (NRC) to transfer responsibility to its Regional Offices changed the ability of national political superiors to intervene in policy implementation in the field. Examining Regional Office data on the enforcement of reactor regulations from 1975 to 1996, I present statistical tests of the changing influence of national political institutions, local policy preferences, and the Regions' task environment. I find that decentralization insulated the NRC from national political oversight, and that the Regions were more responsive to local oversight post-devolution and deviated from a 'natural rate' of enforcement. [ABSTRACT FROM AUTHOR]

The canonical principal--agent problem involves a risk-neutral principal who must use incentives to motivate a risk-averse agent to take a costly, unobservable action that improves the principal's payoff. The standard solution requires an inefficient shifting of risk to the agent. This article, however, summarizes experimental research that throws doubt on the validity of this conclusion. Experimental subjects were routinely able to achieve efficiency in agent effort levels without inefficient risk-sharing. These experimental outcomes, while anomalous from the standpoint of principal--agency theory, are quite consistent with other experimental data testing notions of trust-based implicit contracting. Such contracting within a hierarchy may allow an outcome preferred, by both principal and agent, to that deemed possible by principal--agency theory. If this is true, then the lessons to be learned from principal--agency theory are all the wrong ones. Concentrating on incentives can crowd out the very qualities in a relationship that make social efficiency possible. [ABSTRACT FROM AUTHOR]