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Rethinking Regulatory Democracy

  • Author(s): Cuellar, Mariano-Florentino
  • et al.
Abstract

This Article presents a critique of democratic participation in the modern administrative state, and provides an affirmative proposal for reforming public participation in shaping regulatory policy. According to several different strands of thinking about law and democracy, the legitimacy of the administrative state depends on the claim that it provides opportunities for public engagement as well as a mechanism for expert decisionmaking. A typical rulemaking proceeding lets experts make technical judgments about terrorism, transportation, or telecommunications subject to court review guarding against arbitrariness. The whole process is then enmeshed in a system that is supposed to provide engagement – and therefore democratic accountability -- through presidential appointments and control, congressional oversight, and the public notice-and-comment process. This existing approach is legitimated by “administrative pluralism,” a way of thinking that emphasizes the value of interest-group competition in shaping regulatory policy. While administrative pluralism helps legitimate regulatory policy in the eyes of jurists, scholars, and the public, it also suppresses implicit questions about how much expert judgment is required in regulatory decisions, and whether the extent of participatory democracy and responsiveness is sufficient. The problems are not abstract. They are easily demonstrated in the course of a specific regulatory rulemaking proceeding, involving Section 314 of the USA Patriot Act (governing law enforcement’s access to financial information). The task of balancing privacy concerns and law enforcement objectives hardly seems like the exclusive province of experts. Individuals and interest groups did have a chance to submit comments in the rulemaking proceeding, but virtually all the comments taken seriously by the regulatory agency were sophisticated statements made by financial institutions and their lawyers. While over 70% of comments came from individuals concerned about privacy, the agency did not even address these in its final rule, nor does it appear to have deployed any alternative mechanism to assess public reactions to its regulation. Despite the administrative pluralism model’s tenacious hold, at least two alternatives exist to involve the public in rulemaking proceedings such as those governing Section 314. Both involve constituting a small group of people whose discussions can inform the regulatory process. Participants can be either selected by lot from the entire population (a “majoritarian deliberation” approach), or chosen from among constituencies (such as outside experts) who may be especially impacted by the regulation but are essentially unrepresented (a “corrective” approach). Given that neither the public’s sophistication nor its interest in an issue are fixed, the new approaches can generate valuable information about what informed citizens think of regulatory proposals. Many of the technical challenges could be solved by creating a separate agency to implement the alternatives, though questions arise about selecting deliberation groups, framing the issue, and providing representation to the views of the group. Instead, two larger challenges remain. First is the challenge of choosing among different concepts of “administrative democracy” to combine expertise and participation. Second is the challenge of overcoming a political economy that strongly favors the status quo.

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