Ideological Distance and Regulatory Complexity: Evidence from the US Federal Bureaucracy

PERICLES (Political Economics of Reforms, Institutional Complexity, and Legislative Evaluation Studies) is pleased to announce its next seminar, which will take place in a hybrid format.

Please find below the abstract of the paper.

Ideological Distance and Regulatory Complexity: Evidence from the US Federal Bureaucracy

We study the political determinants of regulatory complexity, arguing that when a bureaucratic agency is ideologically apart from its political principal, unnecessarily complex regulation increases. We test this prediction in the context of the US federal bureaucracy, applying natural language processing (NLP) techniques to an original dataset of more than 70,000 rules issued by 122 federal agencies from 2000 to 2022. Using a two-way fixed effects estimator, we find that the ideological distance between the President and the federal agency increases regulatory complexity, measured as the share of contingent statements in the rules. In line with the theory, this effect is driven by non-independent agencies, which are more subject to political oversight.