Administrative Agencies (Update)

AuthorMichael Asimow
Pages38-40

Page 38

Administrative agencies make government work. A statute that calls for government to provide benefits or to regulate the private sector will not achieve its goals unless a unit of government is given responsibility for implementing the statute. Such units are called administrative agencies. There are thousands of them in federal, state, and local governments.

Before undertaking to regulate the private sector, Congress or a state legislature must first determine that the

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problem is not being dealt with adequately by the market or through COMMON LAW litigation. Sometimes, regulation is the right answer?the private sector cannot handle certain problems (like deciding which of several applicants can telecast over Channel 4 or making sure that new drugs actually work or that doctors are qualified to practice medicine). But in other cases, private sector solutions work better than does government. Government bureaucracy can stifle initiative, and agencies can be captured by the bodies they are supposed to regulate. In those situations, we have recently seen a good deal of deregulation (for example, of railroad, trucking, and airline fares or stock brokerage fees).

A hypothetical regulatory statute will illustrate some of the choices that are available to policymakers. Suppose that Congress decides to regulate the naming of INTERNET sites because it finds that the problem is not being handled adequately by the private sector. It might enact a statute ("The Internet Act") containing various vague provisions on the problem of internet site names. Most important, the Internet Act will create the Internet Board to administer the statute and will define the board's powers.

The Internet Board might have a single agency head (as does the Food and Drug Administration (FDA)) or it might have several agency heads who must act collegially (as does the Securities and Exchange Commission (SEC)). The board would probably be organizationally located within an executive branch cabinet department, as the FDA is situated within the Department of Health and Human Services. A few agencies, such as the SEC, are independent, meaning that they are not within an executive branch department. Generally, the president cannot discharge the head of an independent agency without good cause.

What will the Internet Board actually do? The board might have several powers. It might be especially concerned with cybersquatters?people who register...

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