Competitive Policy Development

TL;DR: In this paper, the authors present a model of policy development in which competing factions have different ideologies, yet agree on certain common objectives, and argue that policy developers can appeal to a decision maker by making productive investments to improve the quality of their proposals.

Abstract: We present a model of policy development in which competing factions have different ideologies, yet agree on certain common objectives. Policy developers can appeal to a decision maker by making productive investments to improve the quality of their proposals. These investments are specific to a given proposal, which means that policy developers can potentially obtain informal agenda power. Competition undermines this agenda power, forcing policy developers to craft policies that are better for the decision maker. This beneficial effect is strongest if policy developers have divergent ideological preferences, because their intense desire to affect policy motivates them to develop higher quality proposals. (JEL D72, D73, D78, E61) During the early years of the New Deal, President Franklin Delano Roosevelt faced an enormous challenge. He believed that dramatic policy innovation was urgently needed on a wide range of issues, including agriculture, trade, banking, employment, and social insurance. However, although Roosevelt was well versed in policy, crafting workable proposals for such a far-reaching agenda was well beyond his capacity, or that of his immediate advisors. Instead, the president had to rely on a broader array of politicians and bureaucrats to develop new policies. Although these individuals shared some common goals (e.g., ending the Great Depression), they also had deep-seated ideological disagreements among themselves, and with the president, about what policies the federal government should pursue. Classic and contemporary theories of bureaucratic politics would suggest that this situation was ripe for exploitation and inefficiency. Weber (1991) famously argued that the typical ruler of a modern state is reduced to being a “mere dilettante” when dealing with institutionalized bureaucratic actors. More recently, scholars