Auer deference holds that when agencies interpret their own pre-existing regulations, they receive deference from reviewing courts. The doctrine serves a critical function in the administrative process, obviating the need for agencies to undergo costly notice-and-comment rulemaking each time interpretation of existing regulations is necessary and guaranteeing that agencies’ good faith exercise of interpretive discretion will be respected by courts. But for some leading scholars and jurists, this benign-sounding doctrine actually encourages agencies to promulgate vague rules in the first instance, augmenting agency power and violating core separation-of-powers norms in the process. This “perverse incentives thesis” has become increasingly influential, but it has never been tested.
In this article, I scrutinize the perverse incentives thesis from both an empirical and a theoretical standpoint. I first test the thesis empirically using an original and extensive dataset of federal rules from 1982 to 2016. My analysis reveals that agencies did not measurably increase the vagueness of their writing in response to Auer. If anything, rule writing arguably became more specific over time despite Auer’s increasing prominence. Seeking answers to why there is such a disconnect between theory and reality, I turn inward to the agencies themselves, contrasting the simple model of comprehensive rationality offered by Auer’s critics with a more realistic institutional account of agency officials as boundedly rational “satisficers.” In particular, I show that in the choice about whether to offer specificity now or later, agencies are driven by both their inner cognitive infrastructure and core administrative law (e.g., hard look review) to front-load specificity.
These findings not only caution against taking the fast-moving assault on Auer too far, but also draw attention to the need to test behavioral theories of administrative law against the empirical record. Because the administrative state often relaxes formalistic prescriptions that each of the powers of government be hermetically sealed, it is easy to derive predictions about perverse incentives that result from the combination of powers. But deriving a model from first principles does not prove a claim, and I argue that core administrative law doctrine should not be changed on the basis of unsubstantiated theories about its behavioral effects.
Walters, Daniel E., "The Self-Delegation False Alarm: Analyzing Auer Deference's Effect on Agency Rules" (2018). Faculty Scholarship at Penn Law. 1963.