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Congressional Control
McCubbins, Noll, and
In Brief Weingast
McCubbins and Schwartz
Moe
Stigler's model of regulation gave a demand-side Weingast and Moran
explanation of regulatory politics--that is, an explanation
based on Olson's logic of collective action, showing that the Presidential Control
largest firms will lobby most effectively, resulting in Heclo
regulation that almost always favors producers over Moe
consumers. Neustadt
Peltzman seeks to update Stigler's theory to give it equal Outside the U.S.
attention to supply-side factors--that is, factors that might Eaton
motivate regulators to produce regulations that benefit Geddes
consumers even though producers lobby better. Peltzman's Huber and Shipan
Ramseyer and Rosenbluth
primary motivation is to replace Stigler's vague concept of a
"regulator" with the more concrete idea of a "legislator,"
with all the electoral motivations that implies. Regulatory Politics
Peltzman
Stigler
Peltzman's theory, then, presents a balanced theory of both
supply and demand of regulation. This theory specifies a
political equilibrium for a regulator (i.e. how much he
should bend to producers' demands).
Main Argument
Stigler's theory had problems. It would not explain why Congress passes regulations that hurt
file:///C|/...mmary of Peltzman Toward a more general theory of regulation - From WikiSummary, free summaries of academic books and articles.htm[21.10.2015 10:09:00]
Summary of Peltzman: Toward a more general theory of regulation - From WikiSummary, free summaries of academic books and articles
Note that "political support" might mean either money or votes. So if a proposed regulation
would increase prices, it has two effects on political support. Producers (at least those
affected by the regulation) would gain profits, so the legislators gain interest group support.
And consumers would have to pay more, so the legislators lose voter support. Winning takes
both money and votes, so legislators will balance these two types of support at an
equilibrium point that maximizes their chances of reelection.
Equilibrium
To say the same thing in more economic language, consider this process in terms of marginal
gains and marginal costs. Regulators want to be reelected. They base their decision about a
proposed regulation on marginal political costs and marginal political gains.
When marginal gains equal marginal costs, the regulator is at political equilibrium.
In addition to the potential per-firm wealth transfer that the beneficiaries can enjoy, they
also consider the total costs of getting these regulations (costs of politically supporting the
regulator, costs of organizing to lobby). These firms may incur lobbying expenses for "voter
education" programs (to persuade voters to support their tariff or whatnot). An interest
group lobbies when the benefits exceed the costs.
Consumers rarely have an incentive to take action against the regulator (legislator); see
Olson.
file:///C|/...mmary of Peltzman Toward a more general theory of regulation - From WikiSummary, free summaries of academic books and articles.htm[21.10.2015 10:09:00]
Summary of Peltzman: Toward a more general theory of regulation - From WikiSummary, free summaries of academic books and articles
Stigler left the "regulator" in a black box. Peltzman improves on this by thinking of the
regulator as a legislator. But most regulation is done by executive agencies, not Congress.
Later research has emphasized the importance of legislative-bureaucratic interactions in
actually producing regulations--and this relationship might be just as important as the
relationships Stigler emphasizes.
Related Reading
The following summaries link (or linked) to this one:
All copyrights reserved. Maintained (but not written) by political scientist extraordinaire Adam
Brown. For discussion of Utah politics, see Utah Data Points.
What is Wikisum? As a graduate student several years ago, my friends and I would routinely share
our reading notes with one another. We all read each article, but we shared the onerous
responsibility of summarizing our readings. I collected many of these summaries and imported them
into this wiki, hoping it would take off and attract hordes of graduate students and political
scientists interested in maintaining an up-to-date knowledge base of all political science has to offer.
It turns out I was too optimistic, though. Hundreds of people read the summaries, but almost
nobody contributed new ones. Eventually, I turned the wiki into a static (non-editable) website. The
summaries are still useful, so they're still here, but the name "wikisum" has become a bit of a
misnomer. Regardless, we have discussion here of presidential campaigns, Congressional behavior,
Republicans, Democrats, political scandals, war, voting, survey methods, and political research on a
variety of other topics. Enjoy.
file:///C|/...mmary of Peltzman Toward a more general theory of regulation - From WikiSummary, free summaries of academic books and articles.htm[21.10.2015 10:09:00]
Summary of Peltzman: Toward a more general theory of regulation - From WikiSummary, free summaries of academic books and articles
file:///C|/...mmary of Peltzman Toward a more general theory of regulation - From WikiSummary, free summaries of academic books and articles.htm[21.10.2015 10:09:00]