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Moe. 1987. Interests, institutions, and positive theory: The politics of the NLRB. APD.
Two independently-developed theoretical approaches--economic (pluralism) and positive theory of institutions--have attempted to explain regulatory outcomes. Both have deficiencies, though both move us considerably in the right direction. However, we must avoid the temptation to find a single body (e.g. Congress) that controls regulatory outcomes. By looking at the NLRB, Moe shows that multiple principles influence regulatory outcomes.
Part I is empirical--a history of the National Labor Relations Board. Part II discusses the lit's two theories in light of the NLRB experience.
Political actors have many goals but scarce resources. Business groups would love to have an anti-labor government, but they are also interested in tariffs, taxes, environmental regulation, and so on. Similarly, labor groups would love to have a pro-union government, but they also are interested in other things. Congress and the President also have ideas about what labor policy should look like, but they will not spend time on labor policy unless they foresee political consequences for failing to do so. Thus, the most common state of policy conflict is peace--or cold war--but not active conflict. The NLRB's history reflects this observation.
The NLRB was born of the pro-labor Wagner Act (1935), then amended by the pro-business Taft-Hartley Act (1947). The period between these two laws was one of active political conflict between business and labor. However, business and labor got along quite well--despite continual efforts to advance their interests--for the next thirty years. Why? After Taft-Hartley, business and labor faced legislative stalemate. Neither side had the political power to push a major legislative initiative. Thus, they consigned themselves to working within the NLRB. They busied themselves mostly with influencing presidential appointment of NLRB board members (one appointment each year to a five-year term).
The president, meanwhile, did almost nothing to influence NLRB processes. He made an annual appointment, but then let the Board act independently. Similarly, the Senate had bigger fish to fry, so it would have blocked only an obviously unqualified candidate--which never happened (until Reagan--see below). When it was time for an appointment, (if the president was Republican) business would submit its list of ideal candidates. (If the president was Democrat, substitute "labor" for "business" and vice versa.) This list was vetted. The candidates were moderates, albeit moderates who leaned toward business. Why moderates? Because business knew it lacked the resources for a major legislative fight, so it resigned itself to trying to get along with labor. Labor, meanwhile, would vet the list, and object only if business recommended an unusually extreme candidate; after all, labor didn't want to cry "wolf" too many times. Having received the list, the president's people chose the one that seemed to fit the White House's political goals the best. This pattern became the normal way of making appointments.
Meanwhile, the NLRB became quite moderate and professional, for two reasons. First, both business and labor interests were interested in nominating moderate board members (see above). Second, the NLRB quickly became the place that young lawyers wishing to specialize in law would work for a few years to establish a reputation. Professional, legalistic work became a stepping stone to a good law career. Thus, the NLRB became professional, efficient, and generally equitable.
There are two sources that can threaten this equilibrium. Both occurred in rapid succession.
Moe uses the NLRB story to evalute two competing theories, and argue that they need to be combined and reformulated.
The economic theory is based on the Stigler-Peltzman model, and is heavily premised on Coase's theory and Olson's model of collective action. Political institutions are a black box. Economists want to know how resources are related with outputs--and they don't look at the "black box" of institutions in the middle of this process (until recently). If Coase's theorem holds (and there are no transaction costs), then it doesn't matter what goes on in the black box.
PTI developed from problems of social choice, to explain how political outcomes can be so stable. Because the approach begin with studies of Congress (agenda setting, legislative rules, etc), it has remained quite Congress-centric. Since transaction costs are rampant, institutions matter.
PTI has a much stronger logical basis; ET is seriously undermined by a couple major logical contradictions. Nevertheless, PTI could also use improvement. We need a more systemic theory--one that looks at how actors/institutions influence on another reciprocally, how they change over time, how their institutional relations are both formal and informal (i.e. norms), and so on. PTI leads us to overlook these factors.
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