How Delegating Authority Biases Social Choices

I. INTRODUCTION Because social decision making takes time, energy, and money, delegating authority often seems expedient. It serves the same expedient function when "We the People" appoint a representative government as it does when principals appoint agents in a private organization. However, when decision makers delegate authority after they have been given the charge to make a social choice on an issue, they may bias the social choice. A simulation of delegation by decision makers can illustrate the tradeoff between expediency and unbiased social choice. II. DELEGATION: DIAGNOSIS AND DEFINITION The source of bias can be extracted from the definition of delegation. The key feature of delegation is the removal of decision makers from the process of decision making. Bias in social choice is likely when such delegating occurs after decision makers have been assigned responsibility to resolve an issue. Any transfer of their specific responsibility to others after they have been given the responsibility is defined here as "ad hoc delegating." The definition is deliberately chosen to be broad enough to encompass a wide range of transfers of authority that occur after responsibilities for making a social choice have been assigned. It includes delegating between separate organizations such as the imposition of federal mandates on state governments, revenue sharing, federalism, and federal ad hoc commitments - both financial and military - to world bodies like the United Nations and the International Monetary Fund. Ad hoc delegating frequently occurs within organizations when divisions transfer their responsibilities to other divisions as in congressional attempts to create independent counsels, fast-track authority, and line-item vetoes. It also occurs when divisions or committees compete with each other to resolve agenda items as congressional committees did on health care reform in the first two years of the Clinton administration. While these examples require explicit action to transfer authority, ad hoc delegating also can occur by default. When Congress excludes issues from agendas or resorts to ambiguous language to achieve agreement, the courts become the default decision maker. Riker (1993) and Matsusaka (1992) identify such maneuvers to exclude issues from agendas as strategic tools of legislators, as evidenced on issues such as busing, abortion, right-to-life, medical reform, and tobacco liability. The outcomes of many of these illustrative social issues have been influenced by criticisms of the way decisions have been delegated. These criticisms escalate to tactics such as congressional overrides and fund cutoffs, suits and injunctions, and many forms of passive resistance to final choices. Any apparent advantages from delegating must be weighed against (i) the increase in decision making costs from such tactics and (ii) the distortions or "biases" in social choices caused by delegating. A simulation can measure the advantages of delegating and weigh them against the biases and increased decision making costs from ad hoc delegating. The very simplicity of the simulation described below should alert us to the monumental scale at which the bias can work in a very complex organization such as the government. III. A POLITICAL MARKET FOR ACCESS The hypothesis that ad hoc delegating is neutral in its effect on social choices can be rejected by a counterexample. A sensitivity analysis is performed on simulations of the political market that contrasts the social choices that are made with and without the use of ad hoc delegating. The simulations are rooted in Peltzman's (1976, p. 212) model of regulation. Peltzman views coalitions as vote maximizers in a political market place which sells the right to transfer wealth. Lohmann (1995) has named this political market "the market for access," in which the buyers are the agents wishing to buy access to the right to make the final social choice. …