Congressional Decision-Making and the Rise of Delegation: An Application to Trade Policy

We examine the importance of delegation for Congressional policy-making, focusing particularly on U.S. trade policy. We present a model of decision-making where legislators use trade policy to maximize their districts' welfare. We show that this simple model does a remarkable job explaining trade policy until the mid-1930s. We argue that the breakdown of the model and current trends in trade policy formation are largely due to the international constraints imposed by GATT. We then show how delegated protection allows Congress to meet their constituents' pleas for protection without fear of retaliation. While uncertainty in the bureaucratic process imposes costs on constituents, we show that this risk is worth bearing since delegated protection often falls outside international constraints. Moreover, Congress can reduce the uncertainty through legislative changes.