A Review of "Structured to Fail? Regulatory Performance under Competing Mandates"

Zhoudan Xie
by Zhoudan Xie, Policy Analyst
October 10, 2017

Christopher Carrigan, Structured to Fail? Regulatory Performance under Competing Mandates (New York: Cambridge University Press, 2017). 326 pp. $34.99 [paper], ISBN: 9781316632802.

In his new book, Structured to Fail? Regulatory Performance under Competing Mandates, Christopher Carrigan tackles a critical question for regulatory scholars and practitioners alike: how does organizational design matter for regulatory agency behavior and performance? To answer it, Carrigan employs a diverse combination of research methods including statistical analysis, case study, and theoretical modeling.

The book begins by recounting three memorable disasters that occurred during the past decade—the financial crisis, Gulf oil spill, and Japanese nuclear meltdown at Fukushima—from the perspective of the organizational reforms that each of the tragedies inspired. Carrigan draws specific attention to the structure shared by the agencies charged with overseeing the associated industries, a design which required the organization to balance regulatory and competing non-regulatory missions. Beginning from these disasters, Carrigan seeks to provide clarity on how these agencies, which he refers to as multiple-purpose regulators, behave and perform. In doing so, he ultimately debunks the popular claim that such agencies fail simply because of the conflict of interests inherent in their competing mandates.

In Part I of the book, Carrigan offers a statistical exploration of a large set of US federal agencies, finding empirical evidence that multiple-purpose regulators generally perform worse in terms of the extent to which they achieve their performance goals. Moreover, he shows that these agencies struggle in part because their employees are less apt to know how their work connects to the agency’s numerous goals. Still, in contrast to the existing scholarship which envisions employee ambiguity as the primary driver of the problems of agencies balancing multiple goals, Carrigan shows that this cause is not the only or even the most important factor explaining the difficulties of multiple-purpose regulators.

To explore the “hidden” factors that help illuminate how such agencies operate, in Part II, Carrigan takes a close look at the now-defunct agency that oversaw offshore oil and gas drilling prior to the Gulf oil spill, the Minerals Management Service (MMS). He considers whether and how two goals, revenue collection and energy development, affected regulatory oversight at MMS and contributed to the spill. Carrigan articulates multiple flaws in a widely-cited theory that MMS’s structure encouraged it to subvert its regulatory goals for the betterment of its efforts to facilitate oil and gas production and collect associated revenue from private producers.

Importantly, although officially one agency, he notes that MMS was specifically structured, through both formal and informal means, to ensure its missions to regulate offshore operations and collect royalties operated independently of each other. This organizational design, which separated the two missions, was a deliberate response to the widely held view when it was created that the close functioning of these two missions had previously caused revenue collection to be neglected. He observes that rather than goal subversion, a problem inherent in MMS’s design was its inability to synchronize implementation of the tasks associated with the competing goals, which actually had the greatest negative impact on MMS’s ability to be an effective government revenue collector.

In contrast, through his examination of MMS’s second set of competing goals, Carrigan finds greater potential for subversion of safety regulation in order to promote offshore energy development. Still, he shows that to the extent offshore oversight was overlooked, it was a direct result of the political and social pressure the agency was facing during its last fifteen years. This pressure to facilitate oil and gas exploration was effective largely because MMS’s structure tightly linked the two missions such that those responsible for oversight were positioned to work closely with those charged with leasing federal property to oil and gas companies.

By reexamining MMS’s historical organizational and political development, Carrigan identifies a repetitive, costly cycle whereby multiple-purpose agencies are created to improve coordination, broken up to avoid goal subversion, and possibly created again at some point in the future when synchronization problems again bubble up to the surface. He then moves to explore this cycle using a more complete, conceptual framework in Part III. In his theoretical model, Carrigan incorporates another factor that shapes multiple-purpose regulatory behavior—ecological, social, and industry conditions which influence the degree to which the competing goals actually conflict. He explains how those conditions interface with politics to define whether regulatory agencies are better or worse off balancing associated non-regulatory missions in any particular case.

In this book, Carrigan challenges several popular theories about the connections between organizational design and regulatory failures through deeply thoughtful, widely-researched analysis. As noted at the end of the book, a disaster may change popular views about organizational design, augmenting one issue while obscuring others. Simply breaking up or merging agencies may not be a cure but may instead introduce other problems inherent in the reform chosen. This book brings remarkable practical value to policymakers, and especially leaders in regulatory agencies, as an aid to helping them recognize the shortcomings associated with any organizational design, thereby illuminating any organization’s potential “blind spots.”

Still, perhaps this book’s most important contribution is that it holistically examines the plethora of forces that shape the way in which organizational design ultimately affects regulatory agency behavior. While an extensive literature has separately studied goal ambiguity, capture, bureaucratic autonomy, and political control, these earlier works focus specifically on just one facet, and so do not offer a comprehensive picture of the factors affecting regulatory agencies. For that reason, readers who are interested in any of these themes will find the book a particularly helpful resource. By combining a diverse set of methodological approaches and a variety of academic perspectives, Structured to Fail? represents an invaluable resource for scholars and practitioners of political science, public policy, and public administration alike.

See also: October 24, 2017 Book Discussion: Structured to Fail? Regulatory Performance under Competing Mandates, with the author, Professor Chris Carrigan, PhD