Agency Agency: Bureaucratic Discretion in EPA Litigation

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Cain, Lucas
- College of Arts and Sciences, Department of Economics
- College of Arts and Sciences, Department of Political Science

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This paper examines the outcomes of the EPA’s main regulatory tool, lawsuits. Using a unique and custom-made dataset of lawsuit outcomes and other explanatory variables, this analysis first describes the practice. The paper then uses Kaufman’s description of “Bureaucratic Discretion” to predict whether lawsuit outcomes will be susceptible to the preferences of a principle. This research includes a novel theoretical model describing a bureaucracy’s actions under discretion. It then investigates the concept via political influence, specifically through the Presidential administration in office contemporaneous to the suit. The findings strongly suggest that the EPA responds to political preferences – obtaining significantly lower penalties under Republican administrations than Democratic ones, and preferring regions and industries associated with the administration in power. Finally, these findings are confirmed via a robustness check that uses “lame duck” sessions to show that the EPA is responsive to changing political circumstances. Together, these findings indicate that the EPA exhibits low levels of bureaucratic discretion and is therefore highly influenced by the preferences of the administration in power.

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