Volume 96, Numbers 3-4, 363-380, DOI: 10.1023/A:1004982615277

First branch, or root? the Congress, the President, and the Federal Reserve

Irwin Morris and Michael Munger

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Abstract

Much of the literature on the power of elected officials and bureaucratic agencies argues, from an empirical perspective, that bureaus appears to exercise autonomy. In this paper, a theoretical model sets out the conditions under which the Congress, the President, and one agency (we use the U.S. Federal Reserve as an extended example) can dictate policy outcomes. The results of the paper include the ldquoCongressional Dominancerdquo theorem: If more than 2/3 of House members, and more than 2/3 of Senate members, agree on something, they get it. The theorem is obvious (the ldquoproofrdquo is in the U.S. Constitution), but often forgotten in the substantive literature. More realistic results are derived for situations where the preferences of members of Congress are more diverse. Powers of the President to influence policy with, and without, appointments are also analyzed.

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