“To Promote the General Welfare”: Addressing Political Corruption in America
Article Category: Research Article
Published Online: May 26, 2016
Page range: 3 - 55
DOI: https://doi.org/10.1515/bjals-2016-0001
© 2016 Bruce M. Owen, licensee De Gruyter Open
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.
THE FEDERALIST NO. 10 (James Madison)
Systemic, institutional, or “type 2” lawful political corruption is a serious problem. It misallocates resources, undermines trust in government, and contributes to the growing gap between the rich and the poor. Systemic corruption occurs when political representatives routinely face options that advance their own interests at the expense of the public, and for which there is little or no personal or political risk. Many Americans are contemptuous of politicians because they appear to be for sale. People distrust Congress in particular. Why is this and what can we do about it?
It is difficult to avoid the suspicion that there is something wrong with the structure of government. After all, the constitutional design ratified in 1788 is largely unchanged. The natural inclination of elected officials to serve their own interests at the expense of the public interest probably has changed little over the years. Politicians have always been seen as rascals. The Madisonian system was once widely admired but now seems to be failing us. If corruption is a more serious problem today than in the past, perhaps it is because Madisonian democracy is less effective at containing it.
James Madison and his colleagues were well aware of the problem of corruption. They understood that elected officials face an unavoidable conflict of interest between the public welfare and their own careers. The Framers also had a realistic view of how interest groups affect government policy. It was, and remains, perfectly obvious that if there is an organization that has the power to grant benefits to one group of citizens at the expense of others, members of each group will want to influence that organization’s policies. It is not shocking that interest groups matter in policy making. Any form of government, when compared with the alternative of Hobbesian dystopia, requires the support of elite interests to which the Hobbesian alternative appears only somewhat less attractive. Such elites require ongoing favorable treatment by the government.
Madison addressed the problem of “faction” (interest groups) in The Federalist No. 10. He recognized that powerful factions could influence political outcomes in unhealthy ways, including repression of the interests of less powerful or less well organized, but possibly more numerous, citizens. He argued that a strong central government would be better able to control such factions (as compared to individual states) because the number of competing interests would be greater at the national level. Madison also held that the separation of powers, the ability of citizens to discipline political misbehavior through frequent elections, and the limited scope of government itself would help to suppress corruption.
Successful candidates for congressional seats have some combination of the following characteristics: expertise in campaign strategy and operations, high levels of name recognition, sufficient funding to purchase advertising and other campaign resources, local support groups (e.g., parties or interests) willing to help with canvassing, and positions on high-salience issues that are consistent with those of a majority of voters in the primary and general elections. Equally important, of course, is the failure of rival candidate(s) to have these same characteristics in greater measure. Discussions of the importance of money in politics often seem to assume that money is the only thing that matters. Not true. However, it is useful to assume, for the sake of discussion, that all the candidates do the best they can to run an effective campaign, given the money and related support that they command. In that context, money and the resources it can buy makes all the difference between winning and losing.
Campaign donors (or “independent” supporters) can help a candidate by giving or spending money for the candidate, or by
Unfortunately, in practice, elections do not effectively discipline systemic corruption. Candidates require several attributes to succeed, but one is indispensable: money. Voters are not inclined to try to assess candidates’ contributions to public well-being. The task is beyond the capability of any voter, however well-informed or diligent. Moreover, elections are biased in favor of the same powerful interests that corrupt legislation because these interests also finance campaign advertising.
It is good that elected officials are responsive to interest groups. That is why the First Amendment has its Petition Clause. However, both legislation and the administration of interventions are vulnerable to corruption because important interests are unable to participate in the process; those interests are diffused, difficult to organize, or lack the resources to invest in political action. Further, neither the judiciary nor the President is in the business of blocking corrupted, welfare-reducing legislation. Finally, most corrupted legislation is obscure, hidden in important unrelated bills, and devoid of interest to the media and media audiences. The canonical checks and balances simply do not work in stemming non-salient, welfare-reducing, and redistributive legislation and regulation.
A major purpose of any democratic government is to provide an arena in which interest groups can reach peaceful solutions to conflicts. The constitutional regulation of this struggle in a Madisonian democracy consists in defining and protecting certain minority rights that the government may not sacrifice to majority demands. Madisonian minority protections are general purpose: they protect not only disadvantaged or unpopular interests but also very powerful minorities with ample resources to influence government policy. Because of these protections, we cannot regulate interest groups and their influence on legislation except through elections or pushback from the other two branches. Regulation that is more direct tends to invade foundational rights that serve important general constitutional purposes.
Systemic political corruption is costlier today than in 1788 because the substantive jurisdiction of the federal government is no longer limited. Washington now regulates nearly every form of human interaction, economic and social. This provides a virtually unlimited menu of opportunities for elite interests and political representatives to design mutually beneficial interventions, the cost of which is borne mostly by the non-elite. Consequently, government often sacrifices the welfare of the poor, the middle class, and perhaps even the elite as a class, to individual elite interests. Not only is the elite share of the pie increased, but also the process shrinks the size of the pie. In the end,
The usual suggestions for reform of the system include tinkering with election or lobbying practices. These are not likely to be successful because they do little to redress the imbalance of interests that contributes to corruption. As the epigraphic quotation from Madison’s
When the frequent effect of legislation or regulation is to make the people as a whole worse off, or to make each faction of the elite better off at the expense of everyone else, the democratic process has either erred or failed. See Richard B. Stewart,
Many political philosophers (with such notable exceptions as Plato) have endorsed democracy as a superior method of governance. Winston Churchill rather glibly characterized democracy as a terrible system but better than the alternatives. “Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time …” 444 Parl Deb HC (5th ser.) (1947) col. 206-07.
“All political systems are prone to decay over time.” F Jefferson at one point apparently favored a revolution and a consequent new constitution for each generation: “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure.” Letter from Thomas Jefferson to William Smith (Nov. 13, 1787),
One reason to modify a democratic constitution is to reduce the costs of political corruption. Corrupt law, including administrative rules and procedures, reduces aggregate well-being, or produces regressive redistribution, or both. Political corruption encompasses far more than criminal acts of bribery or extortion. P
Systemic political corruption is widely acknowledged as a serious problem. Such corruption often impairs efficient production and allocation of goods and services, shrinking the pie. Corruption also often violates consensus principles of equity. Reduced economic efficiency shrinks (or fails to expand) aggregate well-being. Aggregate well-being as used here corresponds to the conceptions of general welfare and happiness, as used in the Preamble and Declaration, including well-being derived from the satisfaction of preferences for public goods, environmental amenities, and social justice.
Dominant interests that achieve and preserve advantages through corrupting influence each have narrow objectives involving a single political or policy issue. A particular interest may seek a tax concession, an import duty, a regulation increasing rivals’ costs, or a national defense project for which they hope to supply goods and services. Each successful elite interest may affect aggregate well-being only slightly. Nevertheless, the process is ongoing and the aggregate effect is cumulative, and potentially very large.
Even a successful, dominant interest group must protect itself from rivals through continuing expenditures on lobbyists and campaign support. The process is dynamic—a banquet for politicians, lobbyists, and contributors that goes on 24/365, like a free buffet at a Las Vegas casino. In addition, even though each successful interest increases its share of the pie at the expense of other interests, the political process as a whole may result in
Bribery of public officials is commonplace around the world and not uncommon in America. See u. s. D As discussed below, I treat political representatives as agents of the voters in a standard principal/agent framework. Suzanne Dovi described other and more complex characterizations. Suzanne Dovi,
Corruption costs also arise from the adverse impact of hundreds of regulatory interventions that impair the efficiency of production and of markets. Many reflect agency compromises among warring elites, reached without regard for the cost imposed on the public. Major costs result from pervasive distortions in the tax system, Dean Neu, Jeff Everett & Abu Shiraz. Rahaman,
The more extensive the reach of government regulation of private economic activity, the greater the burden of corruption on the economy as a whole. Madison did not create a structure with this danger in mind. As a result, there is no institution in today’s government that effectively restrains impositions on economic efficiency or distributional equity resulting from Congress’s and agencies’ responsiveness to well-organized interests—and their neglect of adverse effects on ill-organized interests. Within Washington, the process is taken for granted: it is business as usual, the way things are done.
Madison defended the new Constitution in By limited government, I mean limited in its jurisdiction or scope, measured, for example, by the percent of all economic and social interactions subject to government regulation.
It is clear that the increased number and variety of competing factions, which the Federalists insisted would result from a stronger national government, have not forestalled corrupting factionalism. J
A republican or representative structure is a key feature of Madisonian democracy. This feature relies on an “agency” relationship between elected representatives and the voters. James E. Alt & David D. Lassen, This may include protecting the People from their own sometimes welfare-reducing impulses, which is the central point of
“Agency” in economics refers to the relationship between a supplier of services and users of those services. Individuals and firms deal with suppliers of goods and services when it is not efficient to produce their own. Although all suppliers can be thought of as agents, suppliers assume an important agency character when, due to information or skill asymmetry, supplier performance cannot easily be monitored by those who rely on the service. This condition may prevail even when users regularly consume the product or service if, for example, readily comparable alternatives do not exist, or some effects on happiness (or profit, in the case of firms) are delayed, occult, or situational. The production of law has this character.
Agency in this economic sense is fundamental to the division of labor that permits scarce resources to be employed more efficiently than would be the case in a world of autonomous individuals. Absent reliance on specialists, which is avoided when agents are seen as untrustworthy; humans would not have progressed much beyond hunting and gathering in small family groups. The economic growth literature from the time of Adam Smith has laid great emphasis on the roles of economies of scale, the division of labor (specialization), and the sharing of knowledge and expertise amongst a growing population. I. Jones & Paul M. Romer,
In fact, there exists what may be a metaphor, an analogy, or perhaps even a deep biological connection between this agency tension and the tensions among the specialized cells of all multicellular livings things, including humans. Specialized cells sacrifice themselves to the benefit of the organism because doing so provides benefits from the division of labor and economies of scope, more than repaying the sacrifice. This achievement requires multiple dimensions of protection from cells that would cheat or “free ride” on the cooperative behavior of others, damaging the organism in the process. When these protections fail, the organism suffers from cancer. C. Athena Aktipis et al., Competition and cooperation each play key roles in our culture. In many contexts, competition contributes to the general welfare, most often by selecting and promoting the fittest individuals or organizations for a particular role. However, competition can also reduce welfare by diverting resources to zero-sum struggles. In other contexts, cooperation is more effective in promoting welfare, often through economies of scale and specialization. Antisocial cooperation can reduce the gains available from competition, as in cartels, cabals, and oligarchies. In contrast to the generally prosocial effects of competition in economic markets, however, competition in other “markets” lack any a priori expectation of superiority over other decision-making methods.
Legislators who advance the interests of those who, even tacitly, are necessary to reelection or career advancement are in essence soliciting and accepting bribes, even though the form of the exchange is lawful. It is an indictment of the system as a whole that modern public officials may have no choice. That is, support from one or more powerful interest usually is necessary to election and reelection. As Senator Robert Byrd explained on the Senate floor, “[I]t is money! Money! Money! Not ideas, nor principles, but money that reigns supreme in American politics.” 143 Cong. ReC. 3998 (1997) (statement of Sen. Byrd).
Although elections are competitions, they would not guarantee the performance of elected representatives even if the campaign finance system did not corrupt the contests. Voters are “rationally ignorant” of most aspects of their political agents’ performance, especially non-salient legislation and administrative rule making. A great deal of empirical evidence supports the rational ignorance hypothesis presented in A Stephen Ansolabehere & Eitan Hersh,
electioneering and voting are not exercises in public policy analysis. Voting certainly is not based, and these days could not possibly be based, on well-informed voter assessment of the contribution of incumbents either to local or national well-being. Relative advertising expenditures and simple name recognition strongly influence election outcomes, along with the attitudes predominant in each voter’s immediate social network. A handful of high-salience policy issues dominate the media and influence debate. Changes in attitudes among political elites precede corresponding changes in the electorate. The process that produces elected officials is in many respects identical to the process that produces legislation—that is, a struggle among interest groups—and both are subject to political corruption by elite interests. The major virtue of elections is the absence of superior alternatives, just as Churchill suggested.
The existing Madisonian separation of powers and checks and balances are not effective safeguards against corruption because both the President and the judiciary are disinclined to oppose welfare-reducing legislation. We need not accept, however, low-salience outcomes favoring elite interest groups at the expense of the people. Such outcomes should not be accepted because they are not legitimatized by any expression of or appeal to the popular will. The United States Court of Appeals for the D.C. Circuit, which hears many appeals from administrative agencies, has occasionally moved to discipline substantively corrupt regulatory policies. Such holdings are not routine, and generally rely at least in part on a procedural or other legal error by the agency. The courts are limited further by the Supreme Court’s so-called
Current practice relies on a corrupted institution (elections) and ineffective intramural branch rivalry to discipline a corrupted legislative system. This is rather like relying on the deterrent effect of the criminal law of arson as the sole remedy for house fires. Smoke alarms and firefighters are useful supplements to arson laws. A central theme of this Essay is that mechanisms to reduce the costs of political corruption should focus on examination of the welfare impact of legislation itself rather than on the political, or electoral processes, or motives that led to enactment. In addition to interdicting welfare- or equity-reducing laws directly, interdiction of welfare-reducing law will tend to reduce the incentive for interests and legislators to engage in political corruption.
Corruption is seldom addressed today from a Madisonian perspective. By “Madisonian” I mean the idea of using organizational structure to discipline political action—for example, dividing constitutional responsibilities among rivalrous institutions to achieve a “separation of powers” T
There has been a century-long expansion of central government jurisdiction in the United States. Changing political and policy preferences on the demand side and changing technologies, economic conditions, and political incentives on the supply side, may help to explain the expansion. In any event, I take the expansion as given in order to explore from an economic perspective the roots of political corruption and potential remedies for the modern proliferation of corrupt legislation and regulation. The objective is to explore possible Madisonian structural remedies as alternatives to, or at least as ways to postpone, a potentially radical Jeffersonian reboot.
Parts 2-6 of this Essay chiefly summarize existing literature and understanding. Part 3 describes the problem of
Part 6 explores the concept of quality control in organizations and specifically the role of “umpires” in sports and politics. I conclude that the addition of a quality-control umpire to the Madisonian branches would improve the performance of government by reducing the impact of lawful corruption both directly and through changed incentives. I also explore historical precedents and practical impediments. Part 7 provides some illustrative details of an umpire function, formulated as an Amendment, and Part 8 comments briefly on feasibility of the proposed approach to stemming welfare-reducing corruption.
Congress and much of the federal bureaucracy are now thoroughly corrupt in the sense that officials routinely service well-represented elites without regard to adverse effects on the well-being of the People. “[P]olitical decay … is evident in the capture of large parts of the U.S. government by well-organized interest groups. The old nineteenth-century problem … [of political patronage] … has been replaced today by a system of legalized gift exchange, in which politicians respond to organized interest groups that are collectively unrepresentative of the public as a whole.” F Just two weeks after pleading guilty in a major federal fraud case, Amgen, the world’s largest biotechnology firm, scored a largely unnoticed coup on Capitol Hill: Lawmakers inserted a paragraph into the “fiscal cliff” bill that did not mention the company by name but strongly favored one of its drugs. The language buried in Section 632 of the law delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients. Eric Lipton & Kevin Sack,
Similarly, Igan and Mishra trace much of the blame for the 2008 financial collapse on political corruption in Washington. Deniz Igan & Prachi Mishra, L K Another line of empirical research attempts to use surveys of policy preferences in conjunction with data on incomes and policy outcomes to test various
Proof that lawful corruption is rife in Washington relies largely on remembered personal experiences of former officials, lobbyists, and lawyers, and often takes the form of anecdotes. However, scholars using modern empirical methods have begun to trace such bad effects of corruption as trade barriers to their sources in corrupting interest group influences.
The most straightforward way to document political corruption is in connection with international trade barriers. Tariffs and quotas imposed on imported goods nearly always reduce welfare; they increase prices and restrict supply, reducing the well-being of both commercial customers and consumers. This is true whether or not foreign governments subsidize the imported goods. The beneficiaries of trade barriers are domestic suppliers of goods that face import competition. To illustrate, consider solar panels, which convert sunshine into clean electricity.
The price of solar panels helps determine how much we can reduce air pollution emitted by conventional coal-fired power plants. In addition to contributing to the problem of global warming, conventional power plants have serious adverse effects on human health. Lower prices for solar panels means less air pollution, as consumers and businesses adopt solar power for their daytime needs. United States policy has been to encourage use of alternative (non-coal) power sources. The federal government and many states subsidize investments in solar power installations. So why would the federal government impose tariffs on solar panels imported from China, which has the world’s largest and most efficient solar panel factories?
Late in 2014, the U.S. government imposed heavy tariffs on Chinese solar panels and their components. Diane Cardwell,
Trade barriers in general are unambiguous injuries to the general welfare; they result from political corruption. Domestic industries (and their labor unions) seek trade barriers by making campaign donations or independent expenditures to benefit Members of Congress. They also spend money to hire effective lobbyists, often former Members and senior committee staff. Protection of domestic industries is almost literally for sale. So-called “big data” and advanced econometric methods have documented these links.
Corruption has always been a camp follower of political power. Its modern form is imbalanced pluralism. Schattschneider called modern governance “pluralist” because legislative outcomes reflect the interplay of various interest groups. K
Politics is useful because it addresses conflicts among contending interests without resort to costly and risky violence. Under benign political leadership, these conflicts can be resolved peacefully and often in a way that increases aggregate welfare. But especially now that the scope of government extends to every aspect of our daily lives, corruption has become a more serious threat to prosperity and political stability. The pluralist competition is imbalanced and so are its outcomes. Unless a Madisonian check or balance intervenes, welfare-reducing outcomes are likely to prevail. This undermines in the most fundamental way not merely the performance but also the legitimacy “Democratic legitimation occurs when persons believe that the government is potentially responsive to their views … Democratic legitimation therefore depends upon what people actually believe.” R
The “public choice” literature in economics and political science explores the supply and demand for legislative action and related subjects.
Public choice models predict that Madisonian democracy will be corrupted through the influence of powerful interest groups on the electoral process, just as the Framers feared. Zywicki provides a succinct recent summary of the argument, including several real world examples of such political corruption. Todd Zywicki,
A common criticism of public choice theory is its neglect of “irrational” behavior. Attributes of honor, morality, and self-regard seem to contradict, or at least undermine, the narrowly defined concept of rationality that forms the basis for the theory. This criticism is vulnerable to empirical evidence that the political system in fact behaves as if its participants were rational actors in the sense relevant to public choice predictions. Such evidence is rife.
A less common criticism is that public choice theory generally neglects solutions other than reducing the size of government. That the extent of government will grow and continue to grow is a prediction of public choice theory itself, making it unlikely that even a heroic one-time rollback of government programs and regulations would create a permanent solution to the problem. A different and more effective solution is to change the structure of the political process that produces welfare losses as unintended byproducts of successful elite influence. It may not be practical to eliminate the political process in which interests compete for shares of the pie. But not all increases in elite shares necessarily come at the expense of the poor or have the effect of reducing the size of the pie. Public choice theory would serve us better if it focused on reforms that have the effect of restricting the set of permitted redistributions to those that do not reduce the welfare of the least well off. This Essay offers an example of such a reform.
Significant expansion of central government jurisdictions and interventions in America began in the Progressive era (roughly 1880-1920), partly in response to demands by organized interests and official desire to create and protect continuing streams of political support. The latter seems to have been an awakening of political entrepreneurship and innovation. National elites found it convenient to substitute federal for state-by-state political influence. Expansions also arose from popular—often populist—demands for protection against “unfair” behavior by others or from various perceived risks to well-being. It was in this era that the modern party system emerged in an ultimately futile attempt to increase electoral accountability. The Great Depression later cemented Americans’ sense of reliance on big government.
Expansion of the federal jurisdiction produces “interventions”—most often, regulatory regimes. Interventions of course can mitigate market and other imperfections in human interactions and thus increase aggregate wellbeing. That is the point, for example, of criminal and civil justice systems.
Nevertheless, interventions intended to remedy even undisputed imperfections (air pollution, to take one example) are subject to corrupt design and implementation. Popular interventions often evolve to serve elite interests by distorting markets and behavior, usually at the expense of ill-organized interests. The greater the number and reach of regulatory interventions, the greater the range of continuing opportunities for political corruption, in which one or more elite interest is serviced at the expense of other, less effective interests. Eventually these effects accumulate to slow or stop the improvement in well-being that results from economic growth and technological change.
When progress slows or stops, public discontent is inevitable. Americans have expectations of increasing prosperity. Such expectations may be out of reach in any case, but today widespread discussion of substantial and growing inequality The connections among actual or perceived inequality, expectations, and political upheaval are complex. For a recent review and discussion, see Vladimir Gimpelson & Daniel Treisman,
“The dramatic rise in U.S. wage inequality since the 1970s has been well documented.” Jae Song et al., Joseph E. Stiglitz,
There can hardly be a tavern in America where one can provoke an argument by claiming that all politicians are crooks. Violent revolution in America may be a long shot, but not for lack of impassioned despair at political corruption from both ends of the political spectrum.
The Framers of the American Constitution were familiar with corruption, which permeated the 18th century British parliament and the monarchy. Partly in response, the Framers designed a small federal government with limited powers, which necessarily operated with the available technologies of 1787. That design is no longer adequate to constrain corruption of public officials or to make their incentives reasonably compatible with the interests of the People. What has changed is not necessarily the inclination of a typical elected official to seek private objectives at the expense of aggregate well-being. Instead, that inclination is now presented with a much wider set of opportunities, often embedded in politically legitimate responses to public needs or demands. Specifically, ongoing regulation of any economic or social activity by an administrative bureaucracy creates a fulcrum of interest group leverage. Leverage is exercised directly on the political appointees that head the agency and on career bureaucrats and is traceable in most cases to members of congressional committees. The delegation of legislative, judicial and executive power to administrative units established a linkage between individual members of Congress and administrative agencies, creating not only an immense expansion of opportunities for elite interests to influence policy, but also undermining the Madisonian separation of powers. See Neomi Rao,
Before discussing remedies for these problems we need to agree on the purposes of government and to understand James Madison’s constitutional design and its objectives. In considering remedies for systemic corruption our focus must be on the
The delegates to the 1787 constitutional convention in Philadelphia shared overlapping views of the proper role of government.The Framers’ views were derived largely from John Locke and other Enlightenment philosophers, the delegates’ own educations in the Greek and Roman classics, their observations of British institutions, and their experience with colonial governance. Many had participated in drafting new postcolonial constitutions in their home states. Some were practical men who appreciated as constraints the economic and political interests of prospective ratifiers in the several states. We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America. U.S. C
Jefferson’s politically popular and pithy statement of the proper role of government, adopted and published a decade earlier by many of the same men who returned to Philadelphia in 1787, offers another excellent guide to the Founders’ intent.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. —That T Much of the Constitution consists of “negative rights.” These are limitations on what the government may do to individuals. These rights also create a remedy—a positive right—enabling the individual to call on the judiciary, the legislature, or the People to restrain government abuse of individual rights. Similarly, a traditional liberty can be seen as an entitlement and an entitlement can often be viewed as a liberty. For example, freedom from expropriation of property, a traditional liberty with roots in Magna Carta, entitles citizens to state enforcement of a right. Health care in old age (Medicare) is an entitlement that confers liberty from a particular category of suffering and dependency on others.
The Framers accepted the necessity of government itself as protection from Hobbesian dangers and as provider of essential collective services, such as national defense and justice, and for the peaceful resolution of conflicts. While these functions advance the purposes of government, the Framers also saw two related threats—those of tyranny and of corruption. The larger and more powerful the government, and the broader its scope, the greater the extent or threat of tyranny. Moreover, given the inherent self-interest of public officials—even if only for their own careers—government that is more extensive implies a greater burden of corruption.
The Federalists’ Constitution relies on limited government (now abandoned) and on elections to control corruption. The Framers were well aware of the potential shortcomings of voters and elections, but saw no superior alternative. Indeed, it was Federalist doctrine that the People themselves were the only legitimate source of political power. The Constitution produced by the Philadelphia Convention of 1787 relied on ratification by the People for its own legitimacy. Rakove,
This objective helps explain Madison’s creation of a central government structure that permits or even encourages “gridlock.” Madisonian gridlock results from intramural rivalry among the branches. Modern gridlock is, admittedly, in large part a product of partisan extremism. Another variety of gridlock results from the Senate’s tradition permitting a single Senator to hold up a bill or confirmation without explanation. The House has traditions and rules with similar effect. Single-member holds can facilitate lawful corruption. The Article III courts did not become a full-fledged Madisonian branch until the Supreme Court made clear that it claimed the right of judicial review of legislation in
Madison designed federal government structure to minimize the potential cost, in corruption and tyranny, of supplying what were in 1787 considered the essential services of government. He also designed the Constitution to appeal to a majority of ratifiers. By the early twentieth century the Madisonian structure had come under enormous strain. The ratifiers of 1788 were no longer representative of the popular will. Agricultural, industrial, labor, and other easily organized supply-side interests began to demand added central government protections and compensations in adjusting to the new age of mass production and mass media. By the time of the New Deal, such demands had been greatly magnified.
Simultaneously, the federal government became freer to respond to demands for political solutions to economic discontents. Big business had pioneered the development of scientific management and large organizational hierarchies. A professional and reformed civil service, freed of patronage appointments by early in the twentieth century, faster and cheaper communication and transportation, and national media enabled Congress to offer solutions to the problems of organized interests who could produce votes, directly or indirectly. Simply put, central government services could now expand to meet the demand. As the Supreme Court has noted, the federal government today, a century after the Progressive movement, “wields vast power and touches almost every aspect of daily life …” Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 499 (2010).
Broadly speaking, the expansion of government that began in the Progressive era has been associated not with provision of more effective or extensive liberties, but with the creation and administration of new entitlements. Both liberties and entitlements require administration, as do taxation and procurement. Administration of each of these functions unavoidably implies policies, rules, regulations, and adjudications that directly or indirectly marshal and reallocate resources within the private economy. Administration, whether assigned to independent or executive branch agencies, entails the exercise of discretion. Both agency officials and members of congressional appropriations and oversight committees must choose among options that create and destroy income and wealth.
Participants in the economy and other interests today therefore have enormous incentives and opportunities to influence government policy. Well-funded interest groups wield much of their leverage by influencing policy options selected. Their objectives, broadly, are to advance their own agendas without regard to the impact on other interests or on the economy as a whole. The public choice term for this is “rent seeking.” Anne O. Krueger, According to Professor Reich, “In the 1970s only 3 percent of retiring members of Congress went on to become Washington lobbyists. Now, half of all retiring senators and 42 percent of retiring representatives become lobbyists.” Robert Reich, Opinion,
The Framers likely perceived the consequences of corruption in a small and limited government as a tolerable cost of doing business. To put it the other way around, limited government meant limited opportunities for corruption. Further, many potentially effective anticorruption measures conflict with constitutional freedoms;
It is instructive to consider how an effective constraint on political corruption could fit into the Madisonian structural framework, lacking limited government. The more urgent point is that, if we do not find a less dangerous solution to the corrupt consequences of modern demands for an unlimited administrative state, we may be faced with the messy Jeffersonian default:
[I]t is the Right of the People to alter or to abolish [government], and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. T
It is useful to begin with proposals to control political corruption that are not especially Madisonian. These are mostly well known and often advocated, but unsatisfactory in various respects.
It is tempting to suggest that authors of welfare-reducing legislation, and perhaps even those who vote for such laws, should face criminal penalties. However, the criminal law would be of little help in controlling currently lawful corruption. Alex Stein,
mixed motives and complex interactions with other legislators as well as imperfect information about the effects of the law itself. For this reason, constraints on legislative behavior intended to deter corruption can easily generate false positive or negative errors and adverse welfare consequences. Classifying currently lawful influences and their consequences as crimes is also inadvisable because of the difficulty of proving intent.
There is a widespread appreciation that campaign contributions, in cash or kind, are a way to buy influence with elected officials or, when offered to a candidate’s opponent, a way to punish officials who oppose the contributor’s aims. Most officials will admit that large contributions buy access— significant contributors typically can easily communicate their views to an elected official, and those views are likely to receive respect. Even legislators not up for reelection benefit from contributions that flow through to party coffers or other candidates because these contributions buy advancement within the party leadership hierarchy. Membership of legislators on relevant appropriation and oversight committees creates channels of influence to executive and agency officials. Access also accompanies the “revolving door” of congressional staff alumni appointed to regulatory commissions and executive agency positions.
This exchange—money for access—is very much like a bribe. Of course, the official generally does not explicitly agree to vote or otherwise act in the donor’s interest. The agreement is tacit. If the official would prefer to act in a way that is at odds with the contributor’s interests, she will take pains to explain why she cannot support the donor’s position. She will strive to find concessions, compromises, or perhaps side payments on unrelated matters. This interaction is very much like explicit bargaining over the price of (continued) political support. However, because the interaction between officials and supporters is a “repeated game,” there is no need for explicit agreement. The large special interest contributor, unlike the typical voter, is able to monitor the representative’s performance of the tacit agreement. The contributor can punish a reneging official by withdrawing support or by supporting the official’s rivals. Threats to do so are highly credible.
Campaign finance is such an obvious source of corruption that many popular reform proposals focus on limiting contributions from special interests. Examples include the reforms associated with Professor Larry Lessig’s brief 2015 campaign for the Democratic presidential nomination and the related “Honest election Seattle” voucher reforms approved by voters on November 3, 2015. Bob Young,
Unfortunately, reforms aimed at campaign finance are unlikely to be effective in limiting lawful corruption. First, the reforms enacted so far have been easily evaded by parties, donors and candidates. The most effective work around is the “independent” organizer of campaign support and expenditure. So long as the independent supporter (individual or corporation) does not coordinate directly with the candidate, the First Amendment provides complete protection for unlimited expenditures.
Second, campaign contributions and independent expenditures, while important, are less significant than the relationships between lobbyists and officials. Lobbyists, often alumni of Congress and congressional staffs, are effective because they earn, or have earned, the gratitude and trust of officials. Officials in need of data or arguments in support of their positions often turn to lobbyists for support, including on matters unrelated to a lobbyist’s immediate interests. Nicholas W. Allard, The Center for Responsive Politics compiles data on contributions and lobbying expenditures based on reports mandated by federal laws and Congressional rules. Even small favors can generate powerful feelings of gratitude. Ulrike Malmendier & Klaus Schmidt,
On the other hand, the logic of representative government relies on representatives having accurate information about the problems and preferences of the electorate. Direct communication between citizens, their organizations, and representatives is an important means of acquiring such information. Indeed, the Petition Clause of the First Amendment protects such communication. Yet such protected communications, accompanied by support of the candidate for election or re-election, appears to have the same consequence as a cash bribe.
The Supreme Court faced one facet of the problem in
The Court’s exceedingly narrow definition of corruption as common bribery informed its decision. The Court evaded the real question posed by corporate expenditure in the context of systemic faction-based political corruption.
Notoriously, candidates and contributors have evaded or avoided a succession of attempts to limit direct campaign contributions. There is usually a lawful way around any regulatory constraint, albeit generally at some cost. Given that the very politicians targeted by the regulations draft the regulations, any other result would be surprising. In recent developments, the Supreme Court struck down limits on aggregate individual contributions,
Campaign finance reform, even if it “succeeded,” would not solve the problem posed by political representatives whose incentives are at odds with the interests of the People. Well-organized and well-financed interests would still be able to influence officials. Given the Framers’ choice to promote access to legislators and their reliance on elections, combined with the inherent ambiguity of political motivation, campaign finance reform appears futile as a remedy for systemic corruption.
Although statutes require Washington lobbyists to register, identify clients, and report contributions, there is little chance that such regulation has or will reduce corrupted legislation. After all, the First Amendment encourages lobbying. If lobbying were effectively ended, isolated elected officials would have less information about legitimate (welfare-enhancing) legislation and legislative debate would be less well informed. Moreover, restrictions on access by current lobbyists do not address the underlying problem, which is that important unorganized interests lack the means to hire professional lobbyists. In other words, lobbying is not the problem; the problem is
Congressional reform could be a path to mitigate corrupt legislation. On several occasions, Congress has found the means to impose discipline upon itself and its members. For example, a legislative branch agency, the Congressional Budget Office (CBO), “scores” proposed legislation with respect to impact on budget deficits. Members of Congress generally accept the result as an authoritative bipartisan constraint on deficit spending. Another reform permits a suspension of normal procedure for trade bills, the so-called “fasttrack” for ratification of trade agreements. Similarly, the Base Closing Commission (BCC) reviews proposed retirements of domestic military facilities. The BCC produces a list of recommended closings, and the Congress votes on the package as a whole, rather than on individual closings.
Finally, both houses of Congress have rules restricting non germane amendments to bills on the floor and restrictions on so-called “earmarked” bills proposed by individual legislators. Nevertheless, these rules are not effective. Corrupt bills often become law by riding the coattails of “vetoproof” spending bills in the form of non-germane amendments or line items inserted in committee or in conference.
The problem with many, perhaps all, congressional reforms is that Congress cannot bind itself to follow its own rules next week, much less bind future Congresses. The most recent law on a given matter always trumps preceding laws. Moreover, majority party leaders can decide with impunity to ignore congressional rules simply by suspending them. No branch, court, or police agency can intervene; for example, party leaders are in continuing negotiations with members of their caucuses to gain support for legislation that advances party objectives. A crucial bargaining tool in the negotiations is the leaders’ ability to include bills favored by particular members (and the interests supporting that member) in the portfolio of must-pass party legislation. This mechanism is necessary to party discipline and congressional leaders are unlikely to let procedural rules prevent its use.
One of the remarkable features of Madisonian democracy is its competing independent but inter-dependent branches. Most democracies use a parliamentary system. In the Westminster system, the prime minister is both head of government and the leader of the majority party or coalition in the legislature. The prime minister’s party controls the legislative agenda and executes the resulting law, directing a permanent professional civil service. Gridlock normally is absent from such a system, or has been since the monarch and the House of Lords have been effectively taken out of the picture.
When it comes to the role of well-organized interests and lobbyists, the situation in Britain and other parliamentary democracies is no different from the United States. Draca,
The chief relevant difference between Washington and Westminster is that in Britain there is no ambiguity about assigning responsibility for policy and performance to the current majority party, which may give voters a clearer basis for their decisions in the next parliamentary election. While a parliamentary system might alleviate the frustrations associated with Washington “gridlock,” it is far from clear that it would significantly reduce corrupt laws or corrupt law enforcement by administrative agencies in non-salient matters. The party in power and sometimes the minority, in general, would retain incentives and numerous opportunities to cater to elite interests without regard to the public welfare. Finally, pursuit of a parliamentary structure in the United States would almost certainly require a massive constitutional amendment or a constitutional convention under Article V, perhaps a dangerous undertaking. Article V offers two methods: congressional legislation ratified by a supermajority of the states, or a constitutional convention, for which the only precedent is the Philadelphia Convention of 1787. Although beyond the scope of this Essay, constitutional reform in the U.S. is thought to be hampered by the grave difficulty of amending the Constitution.
Why does the President not simply veto corrupt welfare-reducing legislation? Most Presidents have wielded their veto power sparingly. This is not difficult to understand. First, the Supreme Court has denied the President line item veto power. Clinton v. City of New York, 524 U.S. 417, 448 – 49 (1998). The line item veto is politically as well as constitutionally controversial, implicating the separation of powers as well as the legislative process. One point of departure is to note that the governors of most states enjoy line item veto power, in varying forms, and that the Supreme Court has long enjoyed and exercised a line item veto in reviewing the constitutionality of federal legislation. Whatever theoretical changes in the relative powers of the branches or in legislative logrolling may result from line item veto authority, it does not seem to have engendered cataclysmic consequences.
A realistic appreciation of the political constraints facing any President also undermines a proposed reform aimed at malfeasance in the federal administrative bureaucracy, which includes cabinet departments as well as independent agencies. Justice Elena Kagan, then a Harvard law professor, discusses the idea in a 2001 law review article. Elena Kagan,
The premise of the unitary executive (which Kagan calls Presidential Administration) is that most so-called “independent agencies” such as the Federal Communications Commission (FCC) or the Securities and exchange Commission (SEC) are in thrall to the interests they regulate, producing rules and regulations harmful to public well-being. The Ford and Carter administrations abolished or greatly pared back many regulatory agencies. This was due in part to activism by the Senate Judiciary Committee, then chaired by Senator Ted Kennedy. In almost every case, the result of deregulation was to improve consumer welfare through lower prices, better service or both. Winston surveys studies of the effects of deregulation.
The evidence from this episode is consistent with the premise for abolition of the independent administrative agency system more generally. Kagan’s suggestion is for the President simply to assume the duties of the independent agencies under Article II of the Constitution. For this to succeed, the Supreme Court would have to reverse or distinguish its holding in 295 U.S. 602, 628, 631-32 (1935) (finding that Congress could limit the President’s ability to remove the Chairman of the Federal Trade Commission to removal “for cause,” because the FTC’s authority mixed executive, legislative, and judicial functions, and thus “cannot in any proper sense be characterized as an arm or an eye of the executive … and “must be free from executive control”).
However, giving the President responsibility for the work of the independent administrative agencies runs into the same difficulty as relying on the President to veto corrupt legislation. The President has political reasons to permit some corrupt activity that a disinterested monitor would lack. Further, there are many agencies, parts of the executive branch, where congressional influence exercised through oversight and appropriations dominates presidential control.
For surveys of the literature on direct democracy, especially the cognitive challenges associated with voting in complex referenda,
The golden age of Athenian democracy relied on direct government by the people. All citizens could vote on matters of policy. Functionaries, including military leaders, were either directly elected or selected at random from the citizenry for very brief terms. This system was—and still is—much admired by political philosophers. It eliminates or at least reduces to an irreducible minimum the problem of agent corruption. However, the Athenian system was flawed in several ways. It was not inclusive—noncitizen residents, women, and slaves could not participate. The Assembly suffered from the natural defects of “crowd-sourcing”—a weakness for impulsivity and a tendency to be guided by emotion and demagoguery rather than logic and knowledge. A standard example is the Athenian Assembly’s disastrous decision, described by Thucydides, to invade Sicily in 415 B.C. A
Direct democracy has avid advocates even today. Modern technology offers potential solutions to the problem of voter numerosity. Political scientists such as Fishkin have offered methods (and some evidence from experiments with a “deliberative” decision process) designed to overcome voter ignorance, emotional motivations, and free rider incentives. J
McCormick, channeling some of Machiavelli’s lesser-known work, Niccolo Machiavelli, Discourses on the First Ten Books of Titus Livius, John P. McC
A traditional conservative or libertarian perspective is that political corruption is an inevitable consequence of big government, with an obvious remedy: less government. However, that does not solve the problem of corruption. This remedy ignores the likelihood that the People simply prefer many or most of the entitlement and regulatory programs that inhabit the expanded sphere of federal jurisdiction. If so, reducing the scope of the federal jurisdiction would likely require devolution of these programs to the individual states. State governments face many of the same problems with political corruption as the federal jurisdiction. Pushing the problem down one level does little or nothing to solve it. Nevertheless, effective remedies on a state-by-state level could include those considered here.
The growth of the Internet has greatly reduced the cost of communicating specialized information to large audiences. One result has been the creation of numerous “watchdog” organizations, both partisan and nonpartisan, publicizing lapses by legislators and agencies. The category overlaps with investigative journalism and with individual government employees (“whistleblowers”) who leak and publicize agency misdeeds, especially those that officials attempt to conceal. The most famous recent whistle-blower, and certainly the most effective in bringing about change, is Edward J. Snowden, who passed secret U.S. government documents to web sites and newspapers. The documents revealed extensive, and arguably unlawful, government monitoring of private communication of U.S. citizens. Julia Angwin et al.,
Watchdogs and whistleblowers have a potentially important role, like all media, in making the public aware of dubious government policies and procedures. Several factors, however, reduce their effectiveness in combating welfare-reducing corruption. First, partisan sources or public donations typically fund these organizations; in either case, the nature of the funding source and any watchdog’s need for continued funding introduces a source of bias that limits its credibility. Second, watchdog organizations seldom are staffed with the skilled analysts equipped to assess the impact of highly technical legislation and regulatory policies on the welfare of those affected. Third, watchdog groups have no direct power to intercede because they cannot end the harm caused by corrupted legislation and regulation.
The preceding discussion of popular remedies for political corruption focuses on the selection and regulation of elected representatives and factions. None of these remedies have been (or would appear to be) effective or, in some cases, practicable. It is useful to step back at this point and ask how nongovernment organizations mitigate principal-agent corruption (or equivalently, increase principal-agent incentive compatibility). Leaving aside formal civil and criminal legal remedies, such measures include relational contracts with suppliers and employee compensation designs mostly inappropriate to political representation. For discussions on economic models of intraorganizational incentive structures compatible with improved or optimal organizational performance, see generally, Philippe Aghion & Richard Holden,
A more general approach in commercial contexts is quality control. Quality control (of products and services) includes the incentive-related measures just mentioned but is grounded on direct measurement and evaluation of outcomes. Firms inspect and test finished products and services for adherence to design specifications and customer satisfaction. A feedback loop adjusts organizational practices and incentive structures.
Law in its various forms is a major “output” of the administrative state. (Increasingly, the federal government outsources or delegates to the states the actual delivery of government services. One scholar has noted the trend toward outsourcing or “privatizing” government services, analogizing that trend to the creation of the administrative state in the middle of the last century, and speculating on the implications for, among other constitutional matters, the separation of powers. S
Quality filters such as presidential vetoes and judicial review attend only to a small subset of legislation and seldom address the general welfare objective of the Preamble. The filtering role of the media is confined to issues of high salience that do not correspond systematically to issues that most deeply impugn welfare. The media seek to produce audiences, chiefly by appeal to emotion, especially fear. By reporting on criminal corruption and high-visibility boondoggles (such as the Alaskan “bridge to nowhere” Carl Hulse,
In a Madisonian government the most natural way to interdict corrupted law (and thereby to deter its instigation) in one branch is to assign another branch the responsibility and power to monitor and constrain the
The American people are familiar with the roles of umpires, referees, and kindred officials in sports contests. In addition, while umpires strive to score pitches and runs accurately, their task is to look at plays, not the recruitment of players. The focus generally is on output or performance, not inputs or form. Partisans do often question the rulings of umpires and refs, and sports officials sometimes accept bribes or bet on the outcome of contests, but for the most part sports officiating is credible. Teams and leagues aim to make profits for their owners, an objective that requires, among other things, credible officiating of games. In a sense, sports teams and leagues are analogous to the People in a democracy in needing to monitor and maintain the credibility of officiating and competition by the players on the field. This is not accomplished by asking baseball fans to elect umpires.
Madisonian democracy recognizes the People themselves as the only legitimate source of political power. However, Madisonian democracy also recognizes that the People are unreliable—even dangerous—as a source of day-to-day legislative action. Instead, the People entrust their power to elected representatives. As noted above, this makes elected officials the agents, in an important sense, of the People.
All agents are unreliable to some degree because of self-interest, particularly if their performance is difficult to monitor or evaluate. Madison relied on competitive elections to control this conflict of interest. We can assume that Madison understood that elections would be biased if the partisan influences on voter choices are biased, but saw no better option. In the modern world, voters are woefully bad judges of the performance of their political agents. Voters generally are incapable of monitoring the performance of legislators, at least on non-salient issues.
Unlike private businesses, legislators are not vulnerable to product liability lawsuits. It would be an improvement to rely on disinterested professional umpires to decide which legislative “plays” are welfare-enhancing and which are not, particularly if the umpires themselves could be insulated from the political processes that lead to corrupt laws and policies.
The judicial branch is the sort of umpire that qualifies as a Madisonian element of government. The courts have many roles, but their umpire role is to protect citizens from infringements of constitutional or other rights by other branches of government. Article III courts, while not immune from human failings, are generally trusted by the public—at least more so than the other Madisonian branches.
As with the canonical branches of government, no one should expect perfection from a new “officiating” branch. Welfare-oriented umpires will not perfect or “optimize” the output of law, but at least welfare and equity issues will have a place, and an institutional advocate, in the debate. No less important, insulated umpires will reduce the elite bias that infects current lawmaking. As for legitimacy, what matters in the end is whether people trust the government to act in their interests. Despite being thoroughly undemocratic, the judiciary is seen as far more trustworthy than Congress, and an umpiring branch may usefully rely on similar organization features.
This Essay does not explore the technical means by which to assess the welfare and distributional effects of law. Modern benefit-cost-risk-distribution analysis seeks to include assessments of the significant values citizens place on environmental amenities (such as clean air and water), public services, and policy preferences, including preferences for distributional equity. The literature is enormous.
Ultimately, of course, the question is whether a given law or policy increases happiness, compared to the status quo or some counterfactual, and of what relevant categories of the population. Suffice it to say for present purposes that the practice of benefit-cost-risk-distribution analysis applied to legislative impact is no less objective, reliable, or accurate than the constitutional and statutory analysis carried out by the Supreme Court. We accept the Court’s decisions not because its reasoning is convincing—obviously it is not convincing to the dissenters—but because we accept the legitimacy of the rule of law, imperfect as it is, and the necessity for finality.
How could we include umpires in the current Madisonian system? Several possibilities suggest themselves.
The United States lacks a constitutional court separate from its judicial court of last resort. According to Article III of the Constitution, the Supreme Court was to be a court of last resort for the resolution of disputes. John Marshall, Chief Justice of the Supreme Court from 1801 to 1835, believed that his Court should also be a constitutional court with the power to strike down federal legislation that was inconsistent with the Constitution. In There is debate whether the power of judicial review of legislation was inherent in the British common law imported to America.
Article III does not require any judge to have legal training, but the Supreme Court has always been made up of lawyers. The Court’s appellate role makes the appointment of lawyers natural. Other countries, however, often have separate constitutional courts, to which non-lawyers are appointed. France, for example, has the
Because it is made up of lawyers, the U.S. Supreme Court approaches constitutional questions much as it approaches appellate review of cases: focusing chiefly on “matters of law” which are either procedural or involve statutory interpretation, giving much emphasis to precedent, and mostly ignoring substantive effects on welfare. Perhaps worse, for present purposes, it is constrained by “legal reasoning,” a mode of justification for changes in law in which several factors are alleged to motivate or limit some prior action or doctrine, with respect to which the Court may now assign different subjective weights.
A 2015 Supreme Court decision dealing with environmental Protection Agency (ePA) regulation of mercury emissions from coal-burning power plants illustrates the problem. “The plain intent of Congress in enacting this statute was to halt and reverse the trend toward species extinction, whatever the cost.” Tenn. Valley Auth. v. Hill, 437 U.S. 153, 184 (1978) (interpreting the Endangered Species Act of 1973).
A more catholic constitutional court would consider substantive analysis of effects and treat “facts” as within its competence. What this suggests, unfortunately, is that the U.S. Supreme Court is unlikely to be comfortable asserting a position that would be perfectly natural for the French
Whether the U.S. courts would accept economic well-being and collective action pathology as a new dimension of the nebulous concept of due process may be the key to tacit acceptance of an umpire role. Richard Hasen, advocating such a development, admits that “[d]espite longstanding public and scholarly concern about rent-seeking, I am aware of no court that has ever considered whether national economic welfare could be considered a sufficiently important (even compelling) government interest that could justify [anti-]lobbying (or other) laws.” Hasen, When large numbers of citizens have a common stake in a measure that is under consideration, it may be very difficult for them to coordinate resources on behalf of their position. The corporate form, by contrast, “provides a simple way to channel rents to only those who have paid their dues, as it were. If you do not own stock, you do not benefit from the larger dividends or appreciation in the stock price caused by the passage of private interest legislation.” … Corporations, that is, are uniquely equipped to seek laws that favor their owners, not simply because they have a lot of money but because of their legal and organizational structure. Remove all restrictions on their electioneering, and the door may be opened to a type of rent seeking that is “far more destructive” than what noncorporations are capable of.
The relatively narrow traditional perspective of the U.S. Supreme Court is unfortunate because the Court represents the least controversial of the possible means to establish a credible umpire function within the existing Madisonian system. As John Marshall demonstrated, no formal amendment is required for the Court to assert such a power, although a modern Court would doubtless move with greater diffidence than did Marshall. One way to begin might be for a President to appoint a distinguished nonlawyer to the Court. For a summary (and negative assessment) of proposals to subject regulatory decision making to stricter judicial review, see F
Other solutions to the problem of creating a legitimate and credible umpire to serve as a substantive filter for legislative and administrative corruption seem to require a constitutional amendment. Anything at all can be done, of course, without an amendment if none of the branches opposes it. See Ginsberg & Melton, “The prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law.” Oliver Wendell Holmes,
The grand jury is a potential model for an umpiring institution. The most obvious advantage is that the traditional federal grand jury already can be characterized as a fourth branch of government, and one designed to check abuse of government power.
“[R]ooted in long centuries of Anglo-American history,” … the grand jury is mentioned in the Bill of Rights, but not in the body of the Constitution. It has not been textually assigned, therefore, to any of the branches described in the first three Articles. It “is a constitutional fixture in its own right.” … In fact the whole theory of its function is that it belongs to no branch of the institutional Government, serving as a kind of buffer or referee between the Government and the people. United States v. Williams, 504 U.S. 36, 47 (1992).
The grand jury is, at least in theory, independent of the executive branch, the legislative branch and even the judiciary, though it interacts with each. In centuries past the grand jury has from time to time bravely interceded to resist excesses of the executive,
With a membership between sixteen and twenty-three citizens subject to the same qualifications as members of a petit jury panel, the federal grand jury is supposed to protect potential criminal defendants from abuse by politically appointed prosecutors. The grand jury votes on the sufficiency of the prosecutor’s evidence to justify an indictment, a majority but no fewer than twelve votes being the minimum required to indict. Proceedings are conducted pursuant to Title III, Rule 6 of the
The essential elements of the traditional grand jury for present purposes are its common law role of protecting citizens from the power of the state, its status as an agency outside the formal Madisonian framework, its composition of up to twenty-three ordinary citizens chosen at random, and its reliance on a professional staff to coordinate investigations. The work of the grand jury is defined by common law and statute. Arguably, the Congress could create a grand jury tasked with discovering and “indicting” corrupt law, bypassing the need for a constitutional amendment.
There are some obvious problems with relying on repurposed grand juries to serve as umpires. The power of a grand jury lies in denying permission for the state to prosecute an alleged criminal when the prosecutor has insufficient basis to justify a trial. Even “civil” grand juries are limited to making reports and recommendations. Congress would have to give an umpire grand jury the power to veto a law or regulation on the basis that the law reduced the “general welfare.” That is a lot of weight for the grand jury institution to bear—a change from protecting individual citizens from abuse of state power to protecting the People as a whole from abuses of state power.
There are at least two precedents for an umpire role in a republican form of government. One is the “Council of Revision” I am indebted to Jack Rakove for pointing me to this episode. T
The other and more substantial example of an official umpire charged to protect the interests of the People from the self-interest of the legislature and the executive is the “Tribune of the Plebs,” an elective office under the Roman Republic (c. 500-27 The
Briefly, the socioeconomic class called the “plebs” became restive under the tyranny of the aristocratic families that collectively ruled the Roman Republic and staged a credible boycott. The aristocracy and the plebs negotiated a lasting settlement that granted substantial political power to the elected representatives of the plebs. The Plebeian Assembly held these Tribunes of the Plebs to nonrenewable one-year terms. The Tribunes do seem to have sought generally to protect the interests of the plebeian class for several hundred years. The earliest surviving account of the Tribunate, by Polybius (c. 160 b.c.), likely paints too rosy a picture of the tribunes’ effectiveness.
Our understanding of the political operation of the early Roman Republic is limited; most surviving materials were created centuries after the fact. Still, what we do know of the Plebeian Tribunate offers a useful model for a modern umpire that might reduce the social cost of political corruption, using the veto power. The relevance of the Tribunes to mitigation of modern systemic corruption is twofold: the Tribunes protected the people (or at least the plebs) from executive and legislative actions adverse to plebian interests, and they did so ex post—after the legislation or action was enacted or ordered.
Of all the remedies discussed above, the establishment of an effective umpire function seems most likely to succeed in mitigating lawful corruption. The major difficulty is not the necessity to find consensus on some very important details (illustrated in Part 7), but rather the barrier of formal constitutional amendment, assuming that hurdle proved unavoidable.
no one thinks that either method of amendment under Article V is easy or riskless. Indeed, the prospect of a convention is positively scary, given the 1787 precedent. As noted above, the Constitution is usually amended tacitly by the Supreme Court in the course of interpretation. Something like that likely will have to precede full realization of an umpire institution willing and able to call strikes on lawful political corruption. For example, perhaps a President could delegate “advisory” veto authority to a new organization within the executive branch, made up of umpires. This in itself would do little if anything to reduce corrupt legislation, but it might evolve into a more effective force, without the need for a formal amendment.
even a common understanding of “human nature” as given to us by a complicated mixture of nature and civil nurture should leave no one surprised at manifestations of antisocial tendencies in principal-agent relations, including political representation. That is why we have so many mechanisms to contain it: audit trails, supervision, morality, religion, civil, criminal and reputational penalties, conscience, and so on. Political corruption in America is far from costly to its authors—it is a near requirement of holding a congressional seat, and it is boring to voters and media audiences. We need something more effective than dreams of direct democracy, a return to limited government, or easily evaded controls on interest group activity. If we are to retain the bones of Madisonian democracy and still avoid the growing economic and equitable costs of corruption, we must tweak the Madisonian system. That calls for a branch whose only business it is to monitor and edit Washington’s massive output of corrupt law.
For the sake of concreteness, and in emulation of McCormick, For clarity, although the poor merit special attention and succor, they are not the rational targets of elite corruption; the poor have little worth stealing, and the harm done to them by corruption is the result of systemic efficiency losses. The middle class still has a collective share of half or more of the pie—an amount worth stealing through, for example, corrupted tax, trade, and regulatory policies.
The Constitution and its amendments leave most details up to future implementers. If we are to follow this tradition, only the most important provisions should be included in the “umpire amendment.” Which ones are most important? Not necessarily those I have chosen to include in this illustration.
Republican members of the House and Senate introduced a bill in 2015 that bears some procedural and substantive similarities to the umpire proposal described below.
The anodyne term “Council of Review” may dampen emotional reactions both for and against the proposal.
Promotion of the general welfare of the People being chief among the purposes of government, there is established a Council of Review, which shall not be within the branches established by Articles I, II or III of the Constitution. The Council’s jurisdiction is limited to the “general welfare” clause, excluding the remaining enumerated goals in the Preamble, in order to keep its mission focused and its power within bounds. Lawful corruption affects official behavior on many issues, not just those that reduce well-being. Weisman and Confessore describe a recent example in a front-page article in the The Council may veto any Law or provision thereof judged likely to reduce the well-being of the People or that of the poorest citizens. Such phrases as “general welfare,” “well-being,” and the like are not well defined. Within the founding documents the term whose meaning best serves as a bridge between the terminologies of 1788 and today is “happiness.” Happiness is something that people “pursue;” according to the Declaration it is one of the purposes of government to facilitate that pursuit. Current social science and neuroscience shed a great deal of light on what that means as a practical matter and how to measure it. The science of happiness is not settled in the same way that we think (incorrectly) of physics as “settled” science, but it is certainly no less settled than the application of law to disputed matters. Perhaps “the general welfare” should be formally defined in the Umpire Amendment in terms of the average or aggregate happiness of the people, with the possible addition of other characteristics of its distribution, such as variance and skewness. The suggested anti-regressive redistribution clause could be left implicit in the general welfare purpose, because happiness includes components of altruism and policy preferences for living in a just society. But clearly from a moral perspective this component of happiness is particularly important. For purposes of this Amendment, Law shall mean any provision or related provisions This provides for line item vetoes. In dealing with enacted bills, it may be preferable to limit line item veto power to nongermane provisions. See There are many important timing and other issues associated with this broad definition of “Law.” Perhaps Statutes at Large (or other codes) should be specified instead of or in addition to the United States Code. The Council’s action shall take effect when Congress next adjourns, except that a two-thirds majority in each House of Congress may override the Council’s action. Some enacted bills may require emergency action if the effect on well-being is immediate.
Any citizen of the United States, having voted in six of the last seven federal elections and meeting other standards, established by law, of character, education, and mental fitness may apply to join the Council. I am grateful to Peter Owen for this suggestion. While it may be helpful to include a cap on applicants’ prior year(s) earnings or wealth in order to exclude members of the elite, the restriction on lifetime income makes it very costly for those with high private sector incomes from wealth or employment to serve. A new Member shall be selected by lot from among qualified applicants within 45 days of a vacancy, for a term to begin no later than 90 days after selection. Members shall serve a term of 15 years. The composition of the Council, method of selection, and number of Members are each critical to issues of political independence, public trust, and competence. Having Members elected invites political corruption. Having Members appointed by, say, the President with Senate confirmation invites partisanship. Having only a few Members provides potential pressure points for influence; having many Members complicates discourse and may unduly potentiate the Council’s professional staff. The particular method described in 7.1.2 produces a Council of fifteen Members, with new appointments each year to fill vacancies. If new appointments were made four times a year the Council would have sixty Members; three appointments per year yields a membership of forty-five, and so on. Sixty or forty-five Members seems unwieldy for en banc discourse and decisions; fifteen may be the lower end of the range needed to discourage corrupting influences, particularly if all decisions to veto are required to be en banc. Perhaps the number and method of selection of grand jurors is a useful precedent. Choosing Members by lot from a very large panel invokes the legitimacy of modern petit juries as well as Athenian direct democracy. Imposing qualifications requirements (such as education) on the population of the panel tends to undermine legitimacy by suggesting elite bias. One middle ground might be random selection from a panel of middle-income or middle-wealth citizens, perhaps with moderate educational requirements such as at least two years of postsecondary schooling. The particular suggestion in 7.1.2(a) would likely produce Members relatively well informed about public affairs, engaged, and reasonably well educated, because such people are more likely to vote. Existing studies of voting patterns by age, education, and the like will shed light on these issues.
Members must swear or affirm an oath of office prescribed by law. For life upon their assumption of office, Members must renounce and divest to the Treasury all income from any source other than as described in this Article. Implementers will need to deal with issues involving incomes of other family members, partially vested retirement savings and the like. Members shall receive a salary, not less than twice the salary received by the highest-paid Member of Congress, which Congress may not vary during their term of office. Salaries for Members of the Council must be set taking into account the effect of the restriction in clause 7.1.3(b) and the need to attract professional and other citizens away from careers that cannot be rejoined after service. Unlike elected officials, Council Members cannot expect income from post-service employment. Congress shall by law provide for Members’ salaries to be increased or decreased annually after the conclusion of their service in accordance with the increase or decrease in the per capita income of citizens of the United States, after adjustment for inflation. Members may receive limited and incidental income from appreciation in value of personal and residential real property, gifts unrelated to their office, and interest on loans made to the United States, as Congress may by law provide. Members may be removed by a two-thirds majority of the Council or by impeachment, and Congress may by law provide for the dissolution of such Members’ rights or obligations under this Article.
This bracketed article is a placeholder for provisions whose merit or wording is less obvious, or which perhaps belong in implementing legislation rather than in the Amendment. A related issue is the extent to which existing law and procedures, currently affecting other agencies, are applicable to the Council, which is not part of any branch. It may be useful to establish a default status of non-applicability in the absence of congressional action.
The Council shall publish the reasons for its decisions. Congress shall by law provide for the Council to compel testimony. The Council may, if it deems necessary, deliberate in secret. The Council shall elect, and may remove, its Chair, whose term shall last until the addition of a new Member. The Council and its Members shall be protected with judicial immunity. The Council may not override, or nullify a congressional override, of a presidential veto. The Council may, for purposes of its review, consider what alternative(s) would prevail if the subject matter of the review were vetoed. This is an important but easily overlooked issue. A law or regulation cannot be evaluated in isolation; its positive and negative effects on well-being must be assessed compared to something else, generally either the status quo ante enactment or some alternative law or regulation. The Council in some cases may have to make a political judgment as to the likely reaction of the government in the event of a veto. The Council may decline to undertake any review requested of it. Without control of its own docket, the Council could be overwhelmed with cases requiring review. Moreover, the Council should have the ability to pick and choose cases in a way consistent with guarding its credibility and establishing expectations that it will exercise its “prosecutorial discretion” strategically. For example, arguably the Council should avoid overturning Laws that, even if perhaps welfare-reducing, were enacted accompanied by extensive public awareness and debate, thus invoking Madisonian political legitimacy. See note 26, A stay pending a decision whether to review a new Law may not exceed 45days. Any Law in effect upon ratification of this Amendment shall be subject to review by the Council for 10 years and thereafter for one year at 10-year anniversaries of the Law’s enactment. Older laws should not be exempt from review, but to make all older laws immediately subject to review may be unduly disruptive. From the point of view of the well-being of the People, the sensible thing would be to target first those Laws, old or new, that most significantly and directly reduce welfare. Of course, vetoing nearly any law requires careful analysis of its connections with a whole network of related laws and institutions. One cannot extract one building block, however flawed, from the base of a tower with considering the effect on the rest of the tower. The Council should be guided by the medical maxim, The Council may not veto a Law based solely on any provision of the Constitution except this Amendment, This is perhaps useful to distinguish the jurisdiction of the Council from that of the judiciary. Trade barriers and corruption in procurement are major sources of reduced well-being. Other areas of foreign and military policy often involve complexities that the Council may be ill suited to consider. The Council may consider the principles of stare decisis in its decisions. One mechanism by which the Council protects welfare is by changing the incentives of elite interests and legislators. This requires that the actions of the Council be reasonably predictable. The Council may not stay or veto appointments to federal executive or judicial offices made by the President with the advice and consent of the Senate. This avoids excessive power in the Council and removes any temptation to speculate on the possible consequences of appointments. The Chair shall appoint, with the consent of the Council, a Staff Director with a renewable 5-year term. This and the next two items may be useful in protecting the quality, independence, and integrity of the Council’s staff. The Council is required to make decisions based on sometimes-complex quantitative analyses and economic reasoning. It is very important that the Council acquire and retain a competent staff of experts, analysts, and communicators, especially given the Members’ amateur status. Professional employees of the Council shall serve “at will” and without tenure. Notwithstanding any provision of law to the contrary, the Council may offer staff compensation commensurate with that in the private sector. neither a former Staff Director nor any former professional Council employee may earn income from representing or advising clients with business before the Council before five years after leaving employment.
Congress shall authorize and appropriate such sums as are necessary to provide the Council with staff support and facilities sufficient to perform its duties, and may otherwise provide by law for the implementation of this Amendment. If Congress wished to punish or intimidate the Council, cutting or eliminating its budget might be a temptation. A similar issue could arise with the Supreme Court, although there is little or no indication that it ever has. One way to guard against such a threat is to set a minimum level of appropriation—in effect, an entitlement—that does not have to pass through the usual annual appropriations process. The minimum could be set by linking to the budget of the Congress itself.
Proposing the creation of a fourth branch of government will produce snickers in any knowledgeable audience and puzzled frowns elsewhere. Many Americans have heard about the branches, checks, and balances from an early age, even if they do not have a very clear idea of the specifics. Even people with no exposure to “civics” are quick to agree that politicians are corrupt—but what they imagine is bribery: trash bags filled with cash, delivered in dark alleys, or vacation condos on exotic islands. Explaining the problem and costs of “lawful corruption,” how it arises despite the Madisonian checks and balances, how it ensnares well-meaning elected officials, and why interdiction of its effects is likely more effective than reforms aimed at causation, requires a multidisciplinary educational process. However, economic analysis yields the most convincing argument for the feasibility of reform.
Elites engage in costly efforts to influence policy to advance their own interests and to defend against encroachments from rival elites. The result is an escalating spiral of expenditure by each elite interest and consequent corrupt reductions in the general welfare, affecting not just those without influence but also other, unrelated, elite interests. Elected officials are trapped in this gyre no less than the elites. If government were immune to such influence, fewer of these expenditures would be necessary or worthwhile, and the extent of corrupt influence would decline. It is not possible, or even desirable, to make elected officials immune to elite influence because that could be done only by making them immune to all influences. However, it is possible to reduce the cumulative and escalating adverse impact of this process on everyone, elites and non-elites alike. The key is to rule out elite-favored ends that reduce the size of the pie. This leaves elites free to use government to steal from each other, subject to the constraint that the pie as a whole may not be reduced by the policies they promote. Only shares of the pie, and not the size of the pie, are then at risk. Other elites have resources worth stealing, while the poor have little to steal. The share of the middle class remains vulnerable, through tax policy for example, but it can fight back with its greater numbers and passionate causes.
Given the difficulty faced by elites collectively in containing their potentially destabilizing and pie-shrinking greed, it seems likely that an Umpire Amendment also is in the collective interest of the elite.