We Live in an Interagency World

Interagency coordination has become a central preoccupation of administrative lawyers, scholars, and regulators.  Why is it such a hot topic?  Because the most important regulatory problems of our time span multiple agencies’ expertise and agendas.  Our solutions to complex problems necessarily involve interagency efforts and procedures.  As a result, it is crucial that we have an accurate understanding of how and why agencies interact with each other.

So, what do we know about interagency behavior?  Many scholars who have looked at the issue have asked why and how Congress and the President manipulate interagency interactions to achieve their ends.  They have come to two basic conclusions.  First, agencies compete with each other to please their principals in Congress and the White House.  Second, the more agencies working on a regulatory problem, the more difficult it is for the President, who must work harder to monitor the efforts of multiple agencies.

If our most pressing regulatory problems require interagency cooperation and effective presidential oversight, these conclusions suggest we might be in serious trouble.  Thankfully, both of these conclusions are based on substantially incomplete perspectives.  If we look at the issue not just from the top-down views of Congress and the White House but also from the perspectives of the agencies themselves, we get a more accurate, and I believe rosier, picture about our fate in the interagency world.

First, from this broader perspective, it is clear that agencies have a lot to gain from cooperating with each other instead of competing. One key reason why agencies cooperate is that agencies provide secondary sources of power for each other (after the primary sources of Congress and the White House).  Agencies today must perform a variety of tasks, some of which require expertise the agencies do not have. Agencies often outsource these tasks to other agencies that do have the relevant expertise. These expert agencies then gain the power to influence actions made outside their own purview.  In other words, agencies that contribute to other agencies’ regulatory problems gain sway over those regulatory outcomes.  Because agencies want access to other sources of power and authority, they cooperate and compromise with other agencies.  This is one reason why today’s interagency world looks nothing like the stereotypical portrait of agencies locked in constant turf battles.

Second, although interagency procedures do hamstring the President, they nevertheless produce key benefits for presidential management.  To understand why, consider the distinction between two administrative concepts: centralization and departmentalization. Centralization is the concentration of decision-making authority at a single point. Departmentalization, by contrast, refers to the structuring of an agency so that it influences the set of tasks that relate to its purpose, even when the agency may not have absolute control over each of these tasks.  Interagency arrangements can hurt the President by sacrificing centralization, but they benefit the President by preserving departmentalization.

To illustrate, imagine two agencies, Agency A and Agency B. Agency A’s general purpose is to advance administrative goals in policy field A. It performs all of the tasks that affect policy field A by itself. Meanwhile, Agency B’s general purpose is to advance administrative goals in policy field B, and it has a monopoly on the tasks that affect policy field B. At this stage, we can say that policy field A and policy field B are perfectly departmentalized in Agency A and Agency B, respectively, because all tasks related to each of those policy fields are controlled by the relevant agency. Moreover, we can say that for any given task that affects policy field A or B, that task is perfectly centralized in Agency A or Agency B, respectively, because only the single relevant agency performs that task.

Now imagine that this neat arrangement comes crashing to a halt when the agencies discover a regulatory problem that falls into both of their policy fields. This complexity creates an agency design dilemma.

One option is for either Agency A or Agency B to take sole authority over the problem. Call this the solo option. Another option is for the agencies to share authority in some way. Call this the interagency option.

The solo option centralizes power in a single agency because it leaves one and only one agency to address the regulatory problem.  Conventional wisdom suggests that this option is better for the President.

However, the solo option sacrifices coherent departmentalization.  Assume that Agency A is given sole authority over at least one regulatory problem that falls into Agency B’s policy field. Policy field B is no longer perfectly departmentalized in Agency B.  As a result, if the President wants to steer policy in policy field B, he can no longer do so just by issuing directives to the head of Agency B because not all tasks in the field fall under Agency B’s purview.

In essence, when faced with regulatory problems that implicate multiple agencies’ policy fields, agency designers can: (1) preserve centralization of power for the regulatory problem at hand by assigning authority to a single agency; or (2) share authority among the multiple agencies and thus retain a form of departmentalization in which an agency can influence all tasks related to its general purpose.  Presidents may often prefer the latter option because it enables them to more easily steer policy in broad policy fields.

We live in an age that requires vigorous interagency efforts to combat our major regulatory problems.  Thankfully, agencies are better at cooperating than is often assumed, and interagency arrangements are not the bane to presidential management that many have thought.

This essay draws from the author’s recent article in the Arizona State Law Journal, “Interagency Administration.”