Pawns, knights, or kings: Understanding the role of regulators in public policy

Date of Completion

January 2004


Sociology, Theory and Methods|Political Science, Public Administration|Business Administration, Banking




Research on the role of regulators in policy formation and implementation provides a wide range of views on regulatory power-from low autonomy as a captive of the political process to privileged and powerful actors in the policy domain. This dissertation addresses the questions: What is the impact of regulators and regulatory agencies' involvement in the formulation and enforcement of public policy, and how is this affected by both the internal and external organizational environment? In addition, how does the environmental context affect how regulators react to their various publics as represented by capitalist as well as consumer interests? ^ Focusing on the banking industry in the United States from 1989 to 1995 provides the opportunity to compare differences in policy influence and enforcement between four separate regulatory agencies as they act in concert to adopt interagency policy, and then independently to implement these policies. The banking industry is the only regulatory arena where four separate agencies formulate, implement, and enforce identical policy regulations—and it provides a fertile arena for examining the roles of regulators in public policy. Using two cases within the financial services arena provided an opportunity for a cross-case historical analysis; permitting me to examine the dynamic role of external and internal environments.^ I argue that regulatory power is both relational and contextual; it is contingent on internal and external institutional arrangements changing in the face of political, organizational, and economic shifts. Furthermore, these arrangements vary between agencies in the same policy realm and the differences within and between agencies are magnified in the presence of institutional contradictions and conflicting political signals. My findings suggest that accounting for both agency and structure are integral to the analysis of regulatory agencies and their role in the development and evolution of public policy. ^