The Politics of Agency Entrepreneurialism: Statutory Reinterpretation and the Durability of American Policy

The Constitution was designed to guard against what Madison called “mutable policy,” because constant change in law strips citizens of the stability they need to plan their lives and hold government accountable. Through separating the power of enacting law across a bicameral legislature and requiring broad coalitions to overcome a presidential veto, the framers made policy difficult to enact but durable once passed. Yet across domains from environmental protection to labor standards, American public policy has become more volatile. Why does a constitutional system built to produce durable policy generate widespread volatility?

My book argues that the instability of American policy is the result of a shift in the venue where policy gets made. While the super-majoritarian requirement to pass legislation makes policy durable once enacted, the resulting gridlock leaves legislators unable to pass new laws. I argue that agencies have responded through entrepreneurial policy-making, which is the practice of reinterpreting old grants of statutory authority to address emerging problems. Policy enacted through entrepreneurialism is more volatile than policy made through legislation because it relies on agency reinterpretation, which is subject to the preferences of the president. As policy development shifts to administrative channels, a growing share of national policy is set by the narrow electoral coalition that controls the presidency.

Using a new dataset linking 185,300 regulations to their authorizing statutes, I measure agency entrepreneurialism as rules issued more than two Congresses after their authorizing statute was enacted and that extend that statute to parts of the Code of Federal Regulations it had not previously governed. I demonstrate that entrepreneurial policy-making is the dominant form of regulatory activity in the federal bureaucracy, exceeding rulemaking based on recently enacted legislation in nearly every issue area. Next, I develop a strategic account in which agencies weigh the reputational costs of inaction against the risk of reversal by their political and judicial principals. I find that agencies are more likely to rely on old statutory authority when Congress has failed to address publicly salient problems, but that this behavior is constrained by executive oversight and judicial review. Finally, I show that entrepreneurial rules are less durable than rules created in response to new legislation. I illustrate these dynamics through case studies of environmental, labor, and public health regulation, and discuss their relevance to the emerging problem of artificial intelligence. The findings imply that the instability of American policy is a consequence of where policy now gets made.