26 January 2012

Rational Incompetence

At last, a theoretical explanation for why federal agency heads are so often idiots. In the January 2012 issue of Journal of Theoretical Politics, Jinhee Jo and Lawrence S. Rothenberg provide a fairly simple model that seems to provide some insight.

Of course, the journal is not available if you don't have access to SAGE, but here is the basic idea:
Our analysis provides a rationale and conditions for what we label rational incompetence. Specifically, we present a model in which a President nominates and the Senate approves or rejects an appointee. Besides choosing where in an ideological space a nomination will lie, the President also can determine whether an appointee is competent or not, with lack of competence translating into greater variance over outcomes than is faced with competence. Interestingly, while the political actors are not inherently risk seeking, there is a set of conditions which generate empirical predictions for what Goemans and Fey (2009) label institutionally-induced risk taking, by which it is in both the President’s and the relevant filibuster pivot’s best interests to propose and approve an incompetent administrator in equilibrium. This provides a rationale for incompetence beyond pure loyalty or patronage, and seems roughly in accord with notable contemporary cases of incompetent administration.
And here is their conclusion:
It is intuitive to assume that elected decision makers always want agencies, and therefore those whom they appoint to guide them, to be competent. However, when one considers a separation of powers system, such as that found in the United States, intuition does not necessarily survive more careful analysis.

Rather, we have shown that conditions do exist in which both the chief executive and the Senate will prefer to take a gamble and appoint an incumbent about whom there is less certainty about which policy outcomes they will produce. This risk-taking behavior is induced by the strategic situation in which presidents and legislators find themselves rather than an inherent tendency to be risk-seeking. It is not shocking then that, when something goes terribly wrong at an agency, and a very bad, politically costly, outcome is realized, there is often a seemingly unqualified appointment to place blame on.
If you can get to it, there are some interesting case studies in the article.


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