Agent discretion, regulatory policymaking, and different institutional arrangements

Abstract

This paper examines agent discretion that is a result of the structure of the legislative process. Based on several distributions of lawmaking powers, different games are analyzed in which players decide on regulatory policies. The analysis shows that agent discretion increases as lawmaking powers are differentiated and assigned to specialized players. Particularly, monopoly initiation power, which allows a player to act as a gatekeeper, has a substantial impact on discretion. Agent discretion will be even larger when these players also have heterogenous preferences. The framework that is developed in this paper permits comparisons across different political systems with regard to agent discretion and legislative control on policymaking.