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Presidential Resource Support for IRCS and DRAS: A Principal-Agent Explanation

PFM, Vol. 3 No. 2, (2003)

This article examines whether Independent Regulatory
Commissions (IRCs) received less presidential resource support
(employment and outlays) than Dependent Regulatory Agencies
(DRAs). The principal-agent theory was used to explain why DRAs
fare better in the hands of presidents than IRCs in terms of resource
allocation. It also examines whether there were differences in
spending priorities between social and economic regulation. The
database for this study was composed of 31 federal regulatory
agencies, during the period between 1980 and 2000, broken down into
social regulation and economic regulation. This study has used
Feasible Generalized Least Squares (FGLS) pool time series cross
sectional analysis on agency budget outlays and employment, along
with several political and economic control variables. The findings
indicated that IRCs received less resource support than DRAs, due to
the uncertainty presidents face monitoring the performance of these

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