Presidents want public institutions that give them ample control of bureaucracy. Conversely, members of Congress purposefully choose to place new agencies outside presidents’ control as a way of shielding those agencies from presidential influence. These claims are two well-known assumptions in the literature on agency design. In this contribution I argue that despite the fact that presidents rarely placed agencies in distant sections of the bureaucracy, presidential preferences depend upon the kind of political support, dual or single, that has been achieved. Drawing on a dataset of public agencies in Costa Rica I claim that if the president's party controls the majority of seats in Congress, and if it has obtained high support in the electoral contest, named dual support, it is very likely for new agencies to be placed inside the executive branch. In contrast, when presidents confront an opposition partisan majority in Congress, a condition denominated single support, they anticipate that legislators prefer to create insulated agencies as a mechanism to moderate presidents’ powers, thus reducing the likelihood of fully controlled presidential agencies.
Costa Rica is a good case study to examine the determinants of agency design for several reasons. First, the nation is the oldest and most stable democracy in Latin America. This means that the formal processes of agency design are highly institutionalized. Second, the country has an extended and diverse system of public agencies that includes more than 250 public agencies. Historical data about agency design are available for all agencies created after becoming an independent nation in 1821. Third, unlike other political systems, the Executive branch is able to propose and initiate the legislative process for agency foundation. Finally, consecutive reelection is not allowed at both the presidential and congressional level. As a result, this situation rules out the president’s personal ambition as one of the forces shaping agency design. Therefore, the main concerns of the political actors regarding agency design, the president among them, are policy based.
Agency design has important consequences in politics for multiple reasons. Bureaucratic agencies are pivotal in the realm of public policy implementation. Although Congress and the Executive Branch are the institutional mechanisms for designing and approving laws, the last word about regarding their implementation and most importantly, the success or failure of public policies is ultimately determined by agency characteristics. Also, a significant amount of budget is allocated in public agencies every year with the aim of providing public goods to the society. Therefore, analyzing the processes by which agencies are created is relevant because it allows us to better understand two salient themes. First, the conditions under which presidents are able to get what they want, and second, the extent to which political factors shape agency formation.
The figure below plots the predicted probabilities of different types of agency for the scenario when the president's’ party controls the majority in Congress as vote share increases from 38.5 (=lowest support in the dataset) to 64.7 (=highest support). A visual inspection of this pattern reveals that when presidents controls Congress, their preferences for fully controlled agencies increase significantly. In this graph the gap between the predicted probabilities of insulated agencies and fully controlled agencies is considerably smaller. There is difference of about 10 percentage points of vote share when both estimations intersect. This can lead us to conclude that under the congressional control scenario, Costa Rican presidents are more interested in promoting the establishment of fully controlled agencies. These results provide evidence that suggests that having dual political support, popular and congressional, presidential preferences regarding new agencies are more likely to succeed. In substantive terms, this means that, from the presidential perspective, the optimal scenario for accomplishing what the president wants is one that combines both support from the electorate and from Parliament.
The evidence gathered for this contribution shows that presidential ambition to create and control new agencies is contingent upon the kind of political support the president has, dual or single. Accordingly, the best case scenario for presidential interests regarding agency design is one in which both support from the electorate and majority control within Congress has been achieved.
This article (a brief summary of a paper that is under review and available soon) contributes to the literature on agency design in three important ways. First, it confirms that, as it has been stated in the literature recently, presidents and their interests are key factors in explaining agency formation. Second, it provides evidence suggesting that in spite of the fact that presidents are naturally biased toward the strong executive model, the prevailing contextual conditions impose constraints on their political ambitions. I show that although presidents intend to exert a lot of discretion and power when proposing the creation of new agencies, they evaluate and react according to political contexts. More concretely, if the party controls the majority of seats in Congress and if it has gathered high support in the polls in the electoral contests, one can expect an increase in presidential preferences for new agencies to be placed inside executive branch controlled bureaucracy. In contrast, when presidents lack of majority in Congress they anticipate that members of Congress would prefer to create insulated agencies as a mechanism to reduce presidents’ powers, reducing the likelihood of fully controlled agencies. Third, a vast majority of the literature in this field refers exclusively to the United States. In this article I examine whether this body of literature regarding presidential preferences in agency design travels to other political contexts. Data confirm that presidents other than those in the US have a strong desire for executive controlled agencies.