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Regulation and the Theory of Legislative Choice: The Interstate Commerce Act of 1887

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Type: Working Paper
Author: Gilligan, Thomas W.; Marshall, William J.; Weingast, Barry R.
Date: 1987
Agency: California Institute of Technology, Pasadena, CA
Series: Social Science Working Papers, no. 628
URI: https://hdl.handle.net/10535/5847
Sector: History
Social Organization
Subject(s): legislature
Interstate Commerce Act, 1887
U.S. Congress
Abstract: "In this paper, we argue that federal regulatory outcomes cannot be explained apart from congressional institutions. The specific pattern of benefits is directly tied to these institutions and is determined by two factors. The first concerns how the interests are represented within the Congress, and especially on the relevant committees with policy responsibility or jurisdiction. Committees are important because they enfranchise their members with important powers, notably, veto power over the proposals made by others. The second factor is bicameralism, the need to build majority support in two separate chambers. This is relevant to the extent that interest groups are not distributed identically across both houses of Congress, for example, if different groups hold veto power in different houses. Put simply, our thesis is that specific interests are advantaged in the legislative process, not because of some 'organic' bias in favor of groups, but because of the representation of these groups within the political institutions. In order to make this point, we provide a model of political choice and demonstrate its applicability to the choice of complex regulatory legislation. Our method is constructive. We show how our model helps explain why one out of a range of policies becomes the final legislation."

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