Conflict among Regulators and the Hypothesis of Congressional Dominance

A number of "new institutional" scholars have proposed, contrary to conventional analysis, that Congress has available to it all the means necessary to insure that agencies make policy in a fashion consistent with congressional preferences. This has come to be known as the congressional dominance hypothesis. This line of theorizing suggests that we should not expect to find evidence of substantial and persisting disagreements between regulators. The research presented here reexamines the theoretical underpinnings of the congressional dominance hypothesis and concludes that the original theoretical formulation in fact anticipated a significant degree of regulatory discretion. The modified hypothesis is evaluated by examining a particularly apt case, a protracted controversy over so-called nonbank banks.