Edited by Susan Rose-Ackerman and Peter L. Lindseth
Chapter 18: A Comparison of US and European Independent Agencies
Martin Shapiro A comparison of ‘independent’ agencies in the United States and Europe inevitably must address two questions. First, what do we mean by independence and from whom? Second, why do we want some agencies to be independent? I consider each issue in turn for the United States and the European Union. 1. The United States No doubt a review of the whole history of public administration would reveal hundreds of administrative units in many times and places that correspond to whatever definition of ‘independent’ we choose to adopt. A comparison of contemporary US-European independent agencies safely may begin, however, with the US Interstate Commerce Commission (ICC) established in 1887. US agency independence begins in the context of government regulation of private business enterprise in a resolutely capitalist economy. 1.1. What is independence? The case of the ICC The ICC is the very model of, and indeed a principal source of, the more or less standard ‘law and economics’ model of capitalist regulation.1 The proliferation of rail lines owned by a host of separate private entrepreneurs led to a curious paradox. From the point of view of agricultural shippers, each rail line constituted a natural monopoly for the second nearest line would be too far away from any given farm to offer an economically feasible shipping alternative. From the railroads’ point of view, however, two, or often many more, lines that were indeed far apart in the agricultural hinterlands converged at the big city terminals, resulting in ruinous, rate-cutting competition....
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