What Public Comments During Rulemaking Do (and Why)

• Published date: 01 November 2023
• DOI: http://doi.org/10.1177/1532673X231175686
• Author: Brian Libgober,Steven Rashin
• Date: 01 November 2023
• Subject Matter: Articles

Article

American Politics Research

2023, Vol. 51(6) 715–730

© The Author(s) 2023

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DOI: 10.1177/1532673X231175686

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What Public Comments During Rulemaking

Do (and Why)

Brian Libgober

1

and Steven Rashin

2

Abstract

Public comments on proposed federal regulations are thought to inf‌luence bureaucratic policy choices, but why? While

reelection incentives give politicians straightforward reasons for catering to public preferences, regulators lack similarly direct

incentives to accede to demands from stake-holders. We argue commenters may adopt several different tactics to try and

persuade regulators. Broadly, they may either describe policy consequences or threaten the regulator with sanctions, especially

by the Courts or Congress. But which tactics do members of the public –especially f‌irms and interest groups –use during

commenting, and why? We explore this question by extensive manual coding of comments submitted by strategic actors during

high-stakes f‌inancial rulemaking. We f‌ind that the vast majority of comments have purely informational content, with very

limited threats to involve political principals. These f‌indings should be surprising to a literature that often presumes a model

where interest group commenting is a form of bargaining in the shadow of the Courts or Congress. To assess whether this

behavior is driven by the benef‌its of information versus the costs of threatening, we explore how the strategy of outside

interests changes across the resource distribution, and analyze the litigation records of f‌irms against these agencies. We

conclude with a case study of a high-stakes policy where different kinds of interests used different strategies.

Keywords

interest groups, bureaucratic politics, money and politics, rulemaking, regulation, lobbying, notice and comment

Corporations and interest groups make signif‌icant investments

in inf‌luencing the regulations issued by executive agencies

(Carpenter et al., 2020). It is estimated that about one half of

reported lobbying expenditures are aimed at inf‌luencing a law’s

implementation phase (You, 2017). Organized interests and

individual corporations can spend hundreds of thousands of

dollars on professional comments because they believe that

comments may lead to policy concessions (Stoll, 2011). This

belief is certainly reasonable. When agencies issue a f‌inal rule,

they must include an explanation of their decisions and process.

This explanatory material sometimes identif‌ies particular letters

or collections of letters that inf‌luenced their decision.

1

While

some have wondered if these shows of responsiveness are mere

window-dressing (Elliott, 1992), more recent scholarship has

shown that comments frequently change the content of regu-

lations (Golden, 1998;Bertrand et al., 2021). Indeed, systematic

evidence of comment inf‌luence has been found at the Federal

Reserve Board (Libgober, 2020), the Environmental Protection

Agency (Wagner et al., 2011), the Department of Transportation

(Balla & Daniels, 2007), the Department of Labor (Yackee &

Yackee, 2006), and OIRA (Haeder & Yackee, 2015).

While the scholarly literature has moved past doubts about

whether comments ever matter, it has paid less attention

empirically and theoretically to the mechanisms of

commenter inf‌luence. Under what conditions do comments

change policy? The question has both theoretical and em-

pirical dimensions. Theoretically, what are the transactional

goods that organizations’comment letters can provide the

regulator to obtain benef‌icial policy changes? Empirically,

what organizations can give is a separate question from what

they do give. Why do organizations prefer to share some

transactional goods with regulators and not others? By

synthesizing prior theoretical work and carefully reading a

large number of comment letters, we develop a conceptual

scheme describing two broad categories of goods that

comments can provide regulators: information and threats. Of

course, in a certain ordinary language sense, threats are a kind

of information and information might be a kind of threat. Yet

as we argue, comments communicating hard scientif‌icor

1

Department of Political Science, Northwestern University, Evanston, IL,

USA

2

Salem Center, McCombs School of Business, University of Texas, Austin,

TX, USA

Corresponding Author:

Brian Libgober, Department of Political Science, Northwestern University,

Scott Hall, 601 University Place, Evanston, IL 60208-0001, USA.

Email: brian.libgober@northwestern.edu

technical data or descriptions of group preferences and at-

titudes give regulators very different reasons for making

policy changes than warnings that an interest group will take

the agency to Court or raise a f‌ire-alarm to which Con-

gressional allies may respond. The former kinds of com-

munication are certainly more factual and informative and the

latter more clearly threatening.

While our conceptual scheme for thinking about the

mechanisms of comment inf‌luence is new to the literature, it

nevertheless ties closely to longstanding debates about the

nature of the regulatory process, and especially an important

tension between earlier and later thinking about the design of

administrative institutions. Notice-and-comment was devel-

oped in the United States initially as a procedural device for

allowing agencies to learn about the unintended conse-

quences of their proposed policies (Chen & Libgober, 2023;

Davis, 1969). Earlier authors who were closer to the passage

of the Administrative Procedure Act (“APA”) often implicitly

assumed that informational mechanisms would dominate.

They expected that comments sharing hard data, revealing

preferences, or staking positions would naturally inf‌luence

agencies who were broadly public interest minded. More

recent scholars of administrative policymaking have painted

a considerably bleaker picture. In the view of some,

notice-and-comment has devolved into a proving ground for

future litigation, with meaningful information carrying far

less currency with regulators than it should. The way

commentingissupposedtoworkinthisviewisthat

agencies who fail to accede to commenter demands f‌ind

themselves at the business end of a civil injunction

(Stephenson, 2006;Gailmard & Patty,2007). Add to the mix

important narratives about notice-and-comment solving

political principal’s problems of monitoring rulemaking

agencies (McNollgast, 1999), and it is no longer clear who

the primary audience for these communications usually are,

or how comment authors are trying to persuade. Ironically,

notice-and-comment is one of the few signif‌icant policy fora

in which “direct measures of informational f‌lows”are ac-

tually observable (Bertrand et al., 2021). At least during

commenting, the informational content in lobbying is pre-

served in writing in the public record. Yet relatively little

work in political science or cognate disciplines has tried to

systematically describe how the content of these letters f‌its

with theories of lobbying or administrative policymaking.

Using a detailed and nuanced scheme for the various kinds

of information and threats that interest groups may provide,

we coded 300 representative comments on 30 rules from six

federal agencies.

2

We focus on agencies that regulate the

f‌inancial sector for a few reasons. First, we are interested in

looking at variation in use of tactics across agencies that

oversee similar policy areas and have similar stakeholders.

Post 2008 f‌inancial crisis, the rulemaking of these agencies

are even more related than they usually would be, because of

their joint responsibility for implementing the Dodd-Frank

Act. Second, understanding the tactics of f‌irms in the f‌inancial

sector is important in its own right as the f‌inancial sector

represents over 7% of the US GDP ($1.4 trillion). The f‌i-

nancial sector is also thought to have particular sophistication

and expertise in lobbying as compared with other industrial

sectors (Hacker & Pierson, 2010). At the same time, the

f‌inancial regulators may receive a degree of deference from

Courts and Congress that other agencies do not, with

downstream consequences for the tactics interest groups

decide to use in commenting. Therefore we will adopt a

cautious approach to questions about the universality of our

f‌indings across all regulatory agencies and policy domains.

Using our coding scheme, we describe the distribution of

tactics in commenting on post-crisis f‌inancial regulation by

organized interest groups. We f‌ind that purely informational

comments are the most common, encompassing 80% of all

comments submitted to the agencies. Threats of any kind are

rare. They are similarly rare across all agencies we study.

Richer organizations are no more likely to threaten than

poorer ones.

3

Interestingly, we f‌ind some evidence that

particular rules have an increased propensity to receive legal

threats. Using a case study, we suggest several rule-specif‌ic

traits that increase the risk that organized interests will

threaten the agency over the rule. While we do not exclude the

plausibility of other explanations for why some rules have a

high propensity to draw threats, we note that it is concerning

that the key features our case raises were actually baked into

the policy problem that Congress delegated to the agency.

This is problematic from the standpoint of bureaucratic ac-

countability. As a mechanism check for our f‌indings, we

analyze the comments from organizations that ultimately

sued these agencies. Virtually every legal case was preceded

by a comment, and every case that was preceded by a

comment was preceded by a legal threat according to our

scheme. Based on our exploration of the case law, it appears

that a very small fraction of legal threats actually result in

litigation.

Our f‌indings describe variation in tactical use across

agencies and across rules within agencies, as well as how that

variation in tactical use relates to variation in interest group

resources and textual change in rules. In turn, these facts

suggest several puzzles, most notably the predominant use of

“informational mechanisms”over “threat mechanisms.”We

also offer some discussion about how these facts contribute to

understanding of regulatory processes more generally and

how and why our f‌indings might differ in other regulatory

contexts, such as environmental regulation.

Comments as Transactional Goods

Theories of comment inf‌luence over regulatory policy choice

depend crucially on assumptions about the regulators that

receive these comments. If regulators lack discretion in the

making of public policy, for example, then they will make the

same policy choice regardless of what any particular com-

ment says or does. Commenting on regulations in cases where

716 American Politics Research 51(6)