Q&A with Dr. Christopher Carrigan on Regulation

To kick off the 2018 spring semester, this segment talks with Trachtenberg Assistant Professor of Public Policy and Public Administration Dr. Christopher Carrigan about his new book, Structured to Fail? Regulatory Performance under Competing Mandates (Cambridge University Press, 2017). Below, Dr. Carrigan speaks to the importance of regulation, the challenges federal agencies face when their mandates compete with each other, and the need to fight the urge to reorganize an agency after a disaster occurs.

carriganQ: What makes regulation important?

A: Fundamentally, regulation has the force of law. Regulations don’t stop being promulgated just because laws are not being passed. Regulations that are affecting our everyday activities, both for firms and individuals, are constantly being promulgated. I think it’s certainly an understudied, underappreciated area given its importance in our everyday lives. Even if you’re not going to work for a regulatory agency or one that predominantly creates policy through rulemaking, it’s critical that you understand the regulatory process.

I remember when I first became interested in regulation. I was pursuing my PhD. Before I began writing my dissertation, my classmates and I were discussing our dissertation focus. I told them I was interested in regulatory politics, and their response was, “Why?” Yet, while I was in school, we had the housing meltdown, the Gulf oil spill, and the nuclear crisis in Japan. These same classmates came back said, “Okay, this is important. We get it.” It’s underappreciated how critical regulation is. Underneath the surface, there’s a lot of action happening in the regulatory sphere.

Q: What’s the link between disasters and regulation?structured to fail

A: The spark for the book is the three disasters that I mentioned. In each case, those critiquing the regulator made the same claim. The agency combined regulatory and non-regulatory missions, and as a result, it looked like it was conflicted. It had a function that was regulatory, which suggests it restricts industry in some way, but on the other hand, it was promoting industry in some other way through another mission. So, how could the agency do both?

For example, in oil and gas, the agency in charge was asked to make sure offshore drilling was conducted safely, but at the same time, it was also leasing federal government property to promote oil and gas production. The book studies whether, how, and why this organizational design is important in understanding regulatory outcomes.

Q: What was your key finding in the book?

A: The key finding is that all regulatory designs have problems. Simply because we separate regulatory and competing non-regulatory missions doesn’t mean that all of the sudden everything is going to go wonderfully well. Oftentimes, there are reasons why agencies are designed in the ways that they are. There are tradeoffs for agencies in combining these functions or separating them. One thing that we have to recognize as officials who are running these organizations is that no matter how our agency is designed, we’re going to have issues driven by organizational structure that we’re going to have to deal with. But, as long as we’re aware of what those issues are, we have a better chance of mitigating any consequences associated with them.

Connected to this theme, the book highlights the cycle that we go through with organizational structure. We see regulatory agencies broken up after some sort of disaster occurs in their industry. Then, 20 years later, something else happens, and the agency is put back together. Then it’s broken up again. Then it’s put back together. Each one of these reorganizations costs a lot of money. Yet, when we reorganize, we solve one set of problems but unlock another set of problems. We need to clearly recognize that whatever design we choose, we’re going to have hidden issues. If we recognize this up front, maybe that will stem our natural reaction to want to make a major change in the wake of disaster.

A lot of this is obviously politically driven. When there’s a disaster or an Inspector General report comes out that’s very critical of an agency, lawmakers and leaders of agencies feel like they have to do something about it. It’s a shame in some ways because this knee-jerk response may solve some problems but will likely introduce others. The book finds organization really does matter, it matters in systematic ways, and it matters in ways that if we’re paying attention, we can predict and thus be able to reduce the probability that the bad thing actually happens.

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