Public Choice (2013) 154:21–37
DOI 10.1007/s11127-011-9805-z
Two-tiered political entrepreneurship and
the congressional committee system
Adam Martin · Diana Thomas
Received: 26 October 2010 / Accepted: 23 May 2011 / Published online: 7 June 2011
© Springer Science+Business Media, LLC 2011
Abstract Theories of political entrepreneurship usually focus on the construction of coalitions necessary to change policy. We argue that political entrepreneurs who are unable to
secure favored policies may redirect their efforts to a “higher tier,” attempting to change
the rules of the game to enable the exploitation of future political profit opportunities. We
present a taxonomy of three levels of political rules—pre-constitutional, constitutional, and
post-constitutional—and identify the salient characteristics of institutional entrepreneurship
that targets rules at each level. The development of the congressional committee system is
explored as a case study in entrepreneurship over post-constitutional rules.
Keywords Entrepreneurship · Congressional committee system · Collective action ·
Institutions
JEL Classification L26 · D71 · D72 · D02
1 Introduction
Why do the rules of the political game change? The literature on political institutions has
typically focused on punctuated, pivotal changes in the rules. Buchanan and Tullock (1962),
in their pioneering work on constitutions, situate constitutional changes as broadly—ideally
unanimously—supported collective choices in the face of genuine uncertainty about future
interests. Riker (1964) likewise postulates that sufficiently large external threats serve as an
important catalyst for constitutional changes (Schofield 2006). More recently, such shocks
A. Martin
Development Research Institute, Economic Department, New York University, 19 W 4th St, 6th Floor,
New York, NY 10012, USA
e-mail: [email protected]
D. Thomas ()
Department of Economics and Finance, Utah State University, 3565 Old Main Hill, Logan, UT
84322-3565, USA
e-mail: [email protected]
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have come to be referred to as “constitutional moments” (Ackerman 1999). But what of the
smaller changes in political institutions that accumulate over time?
This paper argues that entrepreneurship on the margin is an important source of change
in political institutions. Targeting the rules of the political game may be a rational response
by political entrepreneurs when their efforts at policy change (or maintenance) are foiled.
The traditional political science literature discusses political entrepreneurs as acting
within the institutional constraints of the political realm. They build coalitions that support political exchange relationships between politicians and interest groups within the rules
of the game. We argue that when these plans are blocked, either by the strategic action of
other players within the current rules or by the rules themselves, entrepreneurial activity
is redirected to a “higher” level rather than eliminated. We thus distinguish between two
types of political entrepreneurs: the policy entrepreneurs of the extant literature and institutional entrepreneurs. Policy entrepreneurs operate on the lower tier, while institutional
entrepreneurs operate on the higher tier. Whereas policy entrepreneurs identify opportunities to enact policies that serve the interests of some coalition, institutional entrepreneurs
identify opportunities to change the rules of the political game in their favor. Neglecting
this possible form of political entrepreneurship ignores an important source of change in
political institutions.
The recognition that changing the rules is an important form of political entrepreneurship
likewise suggests gaps in the literature on constitutions and constitutional choice. As noted
above, this literature has traditionally focused on collective action or social choice in constitutional moments. By bridging the gap between the literature on political entrepreneurs and
that on constitutions, we make several distinct contributions. First, the rules that are “on the
table” in constitutional or institutional choice must come from somewhere. By identifying
political entrepreneurs as their source, we can examine any systematic effect of the identity
and specific circumstances of the entrepreneur on the types of rules that are likely to emerge.
Second, an entrepreneurial approach to rules change provides a framework for understanding how rules evolve gradually over time rather than changing only at crisis points. Third,
our analysis highlights the importance of pre- and post-constitutional informal rules, which
may undermine or de facto alter explicit constitutional rules. A collective action or social
choice approach is ill equipped to deal with informal rules since there is no defined decision mechanism for their adoption. An analytical approach that stresses the entrepreneurial
origin of such informal rules thus offers more traction for understanding them.
We use a historical case study to shed light on these three implications of institutional
entrepreneurship over political rules. The history of the congressional committee system exemplifies a post-constitutional order that has evolved through entrepreneurial changes at the
margin. Our evidence illustrates that changes in the rules and norms governing committees
were largely brought about by individual political entrepreneurs whose efforts to change
policy were foiled by an existing set of rules. The rules changes they instituted stuck even
after the political circumstances they were responding to changed. Various extant features of
the committee system are therefore the cumulative result of these marginal entrepreneurial
changes, not of pivotal constitutional moments.
Section 2 surveys the literature on political entrepreneurs. It also draws out the distinction
between lower tier policy entrepreneurship within the rules and higher tier institutional entrepreneurship over the rules. Section 3 discusses the relationship between the machinations
of institutional entrepreneurs and constitutional rules, providing a taxonomy of different
species of political entrepreneurship. Section 4 examines the evolution of the congressional
committee system as an example of institutional entrepreneurship at the post-constitutional
level. Section 5 points toward further potential applications and implications.
Public Choice (2013) 154:21–37
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2 Policy entrepreneurs vs. institutional entrepreneurs
2.1 Political entrepreneurship in the literature
The most widely cited definition of political entrepreneurship in the political science literature can be found in Frohlich and Oppenheimer (1978). They define the political entrepreneur as “an individual who invests his own time or other resources to coordinate and
combine factors of production to supply collective goods” (1978: 68). The literature in Political Science has focused on this policy entrepreneur who operates within the rules of the
game. A policy entrepreneur is an individual who plays a key role in identifying policy problems, mobilizing supporting coalitions, and implementing policy change (Kingdon 1984;
Majone 1988; Poslby 1984; Mintrom 1997). He can be either a political insider or a political outsider. Policy entrepreneurs discover changes in the underlying distribution of special
interests and act to bring policy into coordination with the changed interests. We classify
this type of action as part of the lower tier of entrepreneurship within the rules of the game.1
In the public choice literature, the discussion of political entrepreneurship likewise has
focused mainly on this lower tier. Holcombe (2002), for example, suggests that there are
two sources of political profits that act as incentives for political entrepreneurship. The first
source is the discovery of gains from trade or removal of inefficiencies. The second source
is the potential for rent extraction.2 In both of these cases, the political profit motive results
in policy entrepreneurship at the lower tier.
Myriad other public choice scholars also focus on policy entrepreneurship. Benson
(2002) uses the case of Interstate Trucking deregulation to illustrate that the identification
of unexploited political profit opportunities can be classified as entrepreneurial. Simmons et
al. (2011) integrate the concept of political entrepreneurship into Yandle’s (1983) bootleggers and Baptists model. They explain that a political entrepreneur is required to provide the
requisite incentives for bootleggers and Baptists to cooperate effectively. Wagner (2007),
more than any other public choice scholar, places entrepreneurship at the center of his theory of politics. He defines it abstractly as the initiation of any sort of project undertaken in a
setting of common rather than private property. Political entrepreneurs succeed by establishing connections—whether complementary or antagonistic—to other enterprises both private
and public. The political entrepreneur in these discussions, like the policy entrepreneur in
the Political Science Literature, discovers a change in the distribution of underlying special
interests and acts to bring political reality into closer correspondence with changed interests.
While these models of political entrepreneurship differ in many important respects, they all
ignore the distinction between entrepreneurship that takes the rules of the political game as
given and that, which tries to alter them.
2.2 Two tiers of political entrepreneurship
Market institutions facilitate exchange and production to varying degrees by defining and
protecting private property rights. Baumol (1996) argues that depending on the institutional
1 Roberts and King (1991) offer a more nuanced taxonomy, defining “public entrepreneurship” as the process
of introducing innovation into the public sector. They distinguish between political, executive, bureaucratic,
and policy entrepreneurs depending on the individual entrepreneur’s “base of power” (1991: 152) and describe the entrepreneurial process as consisting of idea generation, translation, and implementation. These
distinctions are orthogonal to the distinction between entrepreneurship over the rules and within the rules.
2 For this second type of political profit, Holcombe extends McChesney’s (1987, 1997) idea of the politician
who acts entrepreneurially by discovering rent extraction potential and coercing special interests into the
provision of rents.
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constraints that prevail, entrepreneurship can be productive but can also be unproductive or
even destructive. Leeson and Boettke (2009) extend Baumol’s argument. They argue that
while entrepreneurship is omnipresent and constrained by existing institutions, institutional
regimes that fail to secure property rights do not always have to lead to unproductive entrepreneurship. While bad institutions foster unproductive entrepreneurship they also foster
entrepreneurial activity at a higher tier, which is directed at altering the institutional context within which entrepreneurship occurs. Leeson and Boettke discuss this distinction in
the context of economic development and suggest that when formal property rights institutions are absent, higher-tier or protective entrepreneurs will discover alternative informal
institutions that enable lower-tier productive entrepreneurship.
Just like market institutions, political institutions are humanly devised constraints on
human action and therefore subject to entrepreneurial innovation. Moreover, just like market
entrepreneurs, political entrepreneurs can attempt to change the rules of the political game
when their efforts are frustrated. When policy makers’ efforts to secure rents at the lower
tier of policy entrepreneurship are foiled, entrepreneurial efforts are refocused to the higher
tier of institutional entrepreneurship. Higher tier political entrepreneurs, just like higher tier
market entrepreneurs, devise institutional mechanisms to strengthen their political property
rights when they are unable to discover opportunities for redistribution, rent extraction, or
other preferred policies in the existing institutional environment.
Both the political science literature and the public choice literature discussed above
largely omit this distinction between policy entrepreneurship within the rules of the political game and institutional entrepreneurship over the rules of the game. Ostrom (1965)
is a notable exception. Her work provides an important example of higher tier political entrepreneurship. In her dissertation on water basin management, Ostrom discusses the role
political entrepreneurs (or “public entrepreneurs,” in her words) play in solving commons
problems. Effective solutions require not only identifying a technical solution and financing it but also “gaining consent and support among those directly and indirectly affected”
(1965, p. 591). In the absence of a central authority that encompassed the relevant area, the
entrepreneurs in her study accomplished this by devising decision mechanisms that represented the various public and private agencies with a stake in managing California’s water
basins. Her work, drawing on the constitutional insights of Buchanan and Tullock (1962),
highlights the importance of institutional innovations as an entrepreneurial input into securing policy outcomes. We likewise utilize constitutional paradigm as a baseline for our own
framework. We thus review the salient details of the classic approach before proceeding.
2.3 Constitutional rules and higher tier entrepreneurship
The most important rules of the game in market interactions are frequently bundled under the term “property rights.” Social science can go a long way towards explaining market
activity with Hume’s simple formulation consisting of only the stability of possession, transference by consent, and the performance of promises. For this reason, Leeson and Boettke
(2009) do well to focus on property rights (as opposed to other rules) as targets of change
by institutional entrepreneurs. Rules of political games are not so simple. Except for voting rules in highly stylized electoral models, there is no shorthand equivalent to “property
rights” for the sorts of rules altered by political entrepreneurs. Rules governing bureaucracies, legislatures, executives, judiciaries, lobbying and advocacy groups, constituencies, and
the interactions between members of these groups take many different forms. Higher tier
political entrepreneurship can affect any of them.
But while political rules do not have a standard form, they do have a standard theoretical locus: constitutions. Rather than focusing on a type or typical bundle of rules, we focus
Public Choice (2013) 154:21–37
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Fig. 1 Traditional constitutional
political economy
on where the rules subject to change stand in relation to constitutional rules. Constitutional
political economy offers a clear parallel to the logic of higher and lower tier entrepreneurship. Buchanan and Tullock (1962) put forward the traditional case, which we summarize
in Fig. 1.
In this model, the determination of policy is conceptualized as a two-stage nested game.3
Players’ strategies and the rules of interaction codetermine the outcome at each stage. At the
policy level, rules are “relatively absolute absolutes” because they are taken as parameters.
At the constitutional level, however, they are variable; hence “relatively absolute” (Buchanan
1999: 448; Vanberg and Buchanan 1996: 39). Buchanan and Tullock’s two levels thus correspond exactly to the distinction between higher and lower tiers drawn by Boettke and
Leeson. The outcome of the constitutional stage is the set of rules that players confront in
the policy stage. The outcome of the policy stage is concrete government policy. For both
positive (when reform is likely to happen) and normative (how should it proceed) reasons,
Buchanan and Tullock posit a “veil of uncertainty” as the relevant and appropriate constraint
on players’ strategies at the constitutional level. Bereft of knowledge of what their particular interests will be at the policy level, the players at the constitutional level unanimously
generate constitutional rules that serve the common interest.
3 Institutional entrepreneurship and the rules of the political game
Having established the basic distinction between higher and lower tier entrepreneurship,
as well as the neglect of the latter in the literature on political entrepreneurs, this section
offers a taxonomical framework for understanding the various ways that institutional entrepreneurs might attempt to influence the course of policy. We distinguish between three
species of institutional entrepreneurship in politics: pre-constitutional, constitutional, and
post-constitutional. These species correspond to different types of rules that institutional
entrepreneurs might target. Drawing these distinctions allows us to analyze more precisely
when political entrepreneurs will attempt to innovate on the level of rules rather than policy
bundles.
Figure two, depicts our entrepreneurial perspective on constitutional rules. Our approach
differs from Buchanan and Tullock’s (1962) framework in a few important respects. We are
not concerned with the overall set of rules so much as changes to the rules. “Strategies”
3 What constitutes a strategy will depend on the model of agency being deployed. The standard approach is
utility maximization, while Buchanan emphasizes exchange and an entrepreneurial approach stresses innovation.
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will thus consist primarily in entrepreneurial innovations on the margin rather than collective bargaining over some large bundle of rules. Rather than a two-stage game, politics is a
complex network of nested games. We are concerned with those games that generate rules
for lower tier policy formation. They can be categorized as constitutional, pre-constitutional,
and post-constitutional. Pre-constitutional rules include informal linguistic and cultural institutions within which politics operates. Post-constitutional rules, both formal and informal,
are nested within the constitutional superstructure and further condition the policies enacted
by lower tier political entrepreneurs.4 Examples include legislative committee systems and
rules laid down by legislatures for how bureaus operate. The distinction between these different types of rules is intended to be functional rather than to neatly map onto the political
process; each carries with it analytic implications about the motivations and mechanisms at
work in institutional innovations. We spell out these implications below.
Pre-and post-constitutional rules do not stand in a temporal relationship to constitutional
rules, but rather a logical one. For institutional entrepreneurs operating at each level, the
rules at higher levels are taken as given. Ongoing constitutional games are nested in ongoing pre-constitutional games. Likewise, post-constitutional games are nested in ongoing preconstitutional and constitutional games. Developments in pre-constitutional cultural norms
can post-date a formal constitution, while a post-constitutional phenomenon like a political
party system (with its own attendant formal and informal rules) can pre-date a constitutional
provision or even an entire system of formal political rules. What counts is whether a political entrepreneur takes a constitutional rule as given (post-constitutional) or subject to change
either directly (constitutional) or indirectly (pre-constitutional). We also do not mean to imply that changes in pre-constitutional rules work always by way of constitutional rules; they
may influence post-constitutional rule formation or even policies directly as well. The purpose of Fig. 2 is simply to convey the multiple entry points at which a political entrepreneur
may work to secure a favored outcome.
Our framework illuminates not only the different avenues that political entrepreneurs
have for pursuing their agendas, but also the conditions under which they will pursue rules
changes. They can alter rules on a variety of different levels. Table 1 summarizes the properties of these variants of institutional entrepreneurship. We include policy entrepreneurship
for the sake of completeness. The properties are as follows. “Level” indicates whether the
target of entrepreneurial innovation is rules (higher tier) or policies (lower tier), while “Target of Change” further specifies the types of rules that might be altered. The “Formality of
Rules” refers to the distinction between informal norms, which are not codified and lack
explicitly defined enforcement mechanisms, and formally codified political rules. “Motivation” indicates the likely relevant incentives underlying an entrepreneurial move, which
varies according to the rules being targeted; the motivations presented are meant to be typical and suggestive rather than exhaustive and definitive. We now discuss each species of
political entrepreneurship in turn.
4 Our multi-tiered framework parallels Williamson’s (2000) taxonomy of four levels of social analysis: cus-
toms and mores, formal institutions, contracting institutions, and resource allocation. Each level imposes
constraints on subsequent levels. Informal cultural traditions influence the nature of formal legal and political
rules, which in turn serve as a framework for contracting rules that solve particular governance problems
facing different sorts of enterprises. Our framework cross-applies this same logic. Pre-constitutional rules
are akin to cultural traditions, constitutions to the formal legal framework, and post-constitutional rules to
contracting institutions. However, we take no stance on the time scales he posits for different levels of rules.
Public Choice (2013) 154:21–37
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Fig. 2 Constitutions and higher tier entrepreneurship
Table 1 Species of political entrepreneurship
Level
Target of change
(species)
Formality
of rules
Motivation
Examples
Higher tier
(institutions)
Pre-constitutional
rules
Informal
Expressive
Culture, language
Constitutional
rules
Formal
Efficiency
Constitutional
amendments
Post-constitutional
rules
Both
Instrumental
Committee
system
Policy
–
Distributional
Taxing, spending,
regulation, repeal
Lower tier
(policies)
Pre-constitutional rules are comprised of informal institutions such as cultural norms
and language.5 Formal political rules, whether the result of bargains or coercive imposition, require some measure of the capacity for mutual understanding afforded by language.
Moreover, it is implausible that even the most despotic regimes could establish their rule
absent some commonly shared cultural norms. Even once constitutional rules are firmly
in place, they exert influence only through a medium of informal institutions. Their effectiveness is constrained by the existing medium of pre-constitutional norms and rules.6 By
changing that medium, institutional entrepreneurs change the effects of constitutional and
post-constitutional rules.
5 Language allows for the influence of both mental models and ideology, both of which exert influence on the
political process through speech (Martin 2010).
6 Boettke et al. (2008) discuss the importance of path dependence and culture, i.e., pre-constitutional rule
systems, for formal institutional change and development.
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However, there is rarely a direct and obvious link between a cultural norm and political
outcomes or even rules, especially when an entrepreneur is working to establish that norm.
There is also no clear mechanism by which individuals can steer cultural change. Consequently, the likely motivation for such changes is best categorized as “expressive.” Brennan
and Lomasky (1993: Ch. 3) define expressive actions as those that signify a preference for
some outcome but for which there is no clear causal connection between the action and
realization of that outcome. Indeed, the mechanisms at work in cultural transmission and
change are usually acts of communication and expression.7 Individuals express agreement
or affinity with various norms, values, mental models, and even modes of expression (e.g.,
rules of grammar), whether doing so effects any change or not.
By claiming that a clear causal connection between pre-constitutional entrepreneurship
and its intended outcomes does not exist, we are not claiming that there are no obvious
effects. Notably, agitating for some opinion may have the obvious and desired effect of
changing others’ minds regarding that opinion. But what is still missing is a mechanism
for translating that changed opinion into a policy outcome. For example, there is a distinction between an academic or public intellectual attempting to shift public opinion and a
political party strategist trying to bring policy into line with public opinion. The former is
institutional entrepreneurship targeting pre-constitutional rules while the latter is policy entrepreneurship. The academic continues to express his opinion regarding the best course of
policy regardless of whether it has any effect on political outcomes.
A change in underlying beliefs or values often plays a crucial part in bringing about formal constitutional amendment itself. The classic tale of “Bootleggers and Baptists” (Yandle
1983) exemplifies this process. Bootleggers desire prohibition because it eliminates their
competition; they have a concentrated interest. But concentrated interests are not enough.
Public legitimation in the form of an animus against alcohol consumption is also necessary. “Baptists” provide that, and operate for clearly expressive motives. The passage of
the Eighteenth Amendment to the United States Constitution, formally prohibiting alcohol
consumption, would have been unthinkable in the absence of the temperance movement.
Likewise, actual enforcement of prohibition broke down when it conflicted with daily practice. Both the passage and the manifest failure of prohibition highlight the conditioning of
constitutional rules by pre-constitutional institutions.
The next type of political entrepreneurship, formal constitutional change, is the most well
trodden territory in the analysis of political rule formation. While constitutional moments in
which whole systems of rules are torn down or erected are incredibly important, however,
they are a special enough case to merit scholarly special attention. Here we are more concerned with the ongoing evolution of political rules. Obviously, the target of a constitutional
entrepreneur is some subset of the formal rules of the political game, while the likely mechanism is constitutional amendment. We follow Buchanan and Tullock (1962) in assuming
that such changes happen under conditions similar to a veil of uncertainty, making it rational
to pursue efficient rules rather than distributional rents. In cases where such conditions fail
to obtain, institutional entrepreneurship is probably better analyzed as post-constitutional. It
is unlikely, however, that institutional changes at the margin happen under such uncertainty
with any frequency. We therefore focus on post-constitutional entrepreneurship as a more
important driver of the gradual evolution of political rules.
7 Coyne and Leeson (2009) discuss the role of media as a mechanism of institutional evolution. They identify
three different effects media have on institutions, a gradual effect, a punctuation effect, and a reinforcement
effect. All three effects can be thought of as functioning on the level of pre-constitutional rules because they
affect individuals’ mental models slowly and gradually in a process leading up to changing formal institutions.
Public Choice (2013) 154:21–37
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Post-constitutional entrepreneurship differs from constitutional entrepreneurship in two
important respects. First, the rules that it targets can be formal, informal, or some mix of
both.8 Informal rules especially highlight the added value of an entrepreneurial perspective
on rule changes, since such rules by definition are not the outcome of formal collective
decisions. Second, the “veil of uncertainty” does not obtain. For this reason, we have labeled
the likely motivation of post-constitutional entrepreneurs as “instrumental,” by which we
mean to indicate that post-constitutional rules changes are usually motivated by the pursuit
of some particular policy or bundle of policies.9
Post-constitutional entrepreneurship will usually—though not always—be a fallback option for policy entrepreneurs rather than a first line of attack. This is the case despite the fact
that by changing the rules a political entrepreneur might be able to push through a stream
of future policies rather than simply one. Necessary conditions for post-constitutional entrepreneurship include the ability to envision a winning coalition whose preferred policy is
blocked institutionally, as well as a post-constitutional rule that overrides, nullifies, or alters
the effects of existing rules to enable the policy’s adoption. These two conditions will deter
many potential institutional entrepreneurs, but a potential stream of future policies is still
very significant added benefit of innovating at the higher tier. Nonetheless, it is counterbalanced by several costs and constraints on benefits:10
1. Up-front costs of devising and implementing new rules. These are fixed costs that
would be spread over the stream of future policies, but they are both new and potentially
significant. There is no guarantee that the potential coalition supporting a policy perfectly
overlaps with the potential coalition favoring a change in the rules. Devising rules acceptable to other political agents with decision rights introduces a new layer of search costs.
In addition, implementing those ideas may involve spending political capital in the form
of favors or claims on votes.
2. Uncertainty about the full consequences of rules changes. Once rules are in place,
other policy entrepreneurs representing the interests of rival coalitions may seize upon
them. While we grant that an entrepreneur interested in pursuing rules changes can envisage the effects of those rules changes on some set of coalitions relevant to his own
success, it does not follow that he is aware of all possible coalitions that would benefit
from the rule. Those coalitions may be rival to his own either in what policies they prefer
or in terms of competing for a common pool of members. Given that coalitions can be
unstable through time, this can severely mitigate the benefits of rule changes.
3. Short-run costs of adopting new strategies to match the new rules. One example of
such a short-run cost is the loss in value of any human capital specific to the old rules.
This cost will be more pronounced the greater is the uncertainty associated with a rule
change (point 2).
8 Thus, even if one does not accept the “veil of uncertainty” approach to analyzing constitutional rules, there
remains an important distinction to be made. Even if one thinks that genuine constitutional rule formation is
empirically a tiny or even null set, most (or even all) rules changes could be analyzed as post-constitutional
while maintaining the analytic distinction.
9 In Buchanan’s framework, constitutional rules are obviously instrumental as well. But constitutional changes
under a veil of uncertainty are meant to secure economic (or exchange) efficiency, which is a property of the
system. Post-constitutional changes are meant to secure a form of technical efficiency of policy making which
effectively advances the interests of some particular agent or coalition.
10 This section draws on Ostrom’s (2005: 244-5) discussion of the circumstances under which resource users
in a common pool situation will attempt to alter the rules by which they access the resource.
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4. Limited terms. Many political entrepreneurs function as such by way of holding political
office, and such offices often carry with them requirements for re-election. Even bureaucrats may be ousted as different parties come into power. In the face of such turnover the
present value of a stream of future policies may be discounted heavily. This is important
for the example we develop below, since members of the U.S. House of Representatives
serve two-year terms. Concomitantly, we ought to expect those with more secure offices
(such as dictators) to be more prone to changing rules.
5. Opposition from entrenched interests. While the benefits of a stream of future policies
may be great, the losses to those on the other end of the rule change are likely to be
proportionate to those gains. The effort they would be willing to spend fighting the rule
change may thus substantially increase the cost of effecting the change. This is especially
true when the benefits created by existing rules are concentrated in a few hands.
In sum, a policy entrepreneur tends to become an institutional entrepreneur when his expected profit from pursuing an institutional change for some purpose exceeds his expected
profit from pursuing a policy change for that purpose. Since the expected cost of pursuing an institutional change is normally higher than for pursuing a policy change that could
achieve the same end, the expected benefit of introducing an institutional change must be
disproportionately large to render institutional entrepreneurship more profitable. Or, more
likely, policy entrepreneurship must be unavailable to the political entrepreneur as a means
of securing the desired end because it has already failed. Two further implications for postconstitutional rule changes follow from this analysis. First, these costs and constraints on
benefits are why we describe post-constitutional entrepreneurship as effecting marginal
changes in rules. Small, gradual changes require less up-front cost and carry far less uncertainty. Second, because the cost of post-constitutional rule changes tends to be high,
their specific character will be accidental to the preferred policies of effective political entrepreneurs and the particular historical circumstances in which they are pursued. We turn
to a concrete example of this process in the next section.
4 Post-constitutional entrepreneurship and congressional committees
Institutional entrepreneurship on the post-constitutional level targets rules that are nested
in given constitutional rules and are either formal or informal. The congressional committee system, as it has evolved over the last 200 years, is just such an array of rules. It is
based on both formal congressional rules as well as informal norms like seniority and deference. While the committee system is central to the legislative process today, its rules are
not carved in stone. In fact, the complex system of formal and informal norms surrounding
the committee system emerged from a first congress that did not have any standing committees with specific jurisdictions. Furthermore, the rules that governed committees in early
congressional history have changed dramatically over time. We argue that profit seeking
institutional entrepreneurs initiated most of these changes.
The committee system’s history illustrates several other features of our framework. First,
the actual rules changes pursued are usually instrumental to the pursuit of particular policies. Early moves to strengthen the Speaker’s position and grant standing committees billdrafting authority, for instance, spring from Henry Clay’s preferred policies and antagonistic relationship with President Monroe. Second, the committee system is a hybrid system
of formal and informal rules. Both matter in the determination of policy, and both are targets of entrepreneurial change. We use the development of the seniority principle and its
subsequent subversion by Speaker Cannon to illustrate this point. Third, and concomitantly,
Public Choice (2013) 154:21–37
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Table 2 Entrepreneurial origins of committee system features
Institutional feature
Origins
Standing committees
1809–1829: Clay Speakership establishes standing rather than special
committees
Committee jurisdictions (over
drafting legislation)
1809–1829: Clay Speakership establishes norm of committees drafting
legislation before it is brought before the whole House
1946: Congressional Reorganization Act reduces number of
committees with overlapping jurisdictions
Seniority
1829–1890: Informal seniority norm emerges after Clay Speakership
1890–1910: Seniority norm abrogated when the Speaker of the House
becomes chairman of the Rules Committee
1910: Speaker of the House loses chairmanship of Rules Committee,
restoring seniority system
Deference norm
1809–1829: Clay Speakership establishes a norm of deference to
committee decisions, which strengthens committee jurisdictions
1903–1911: Cannon Speakership solidifies deference norm
pursuing post-constitutional rule changes is unlikely to be a first choice strategy for political entrepreneurs. It is only when other attempts at securing favored policies are hindered
and when the benefits of a rule change exceed its costs that political entrepreneurs operate
on the higher tier. The entrepreneurial moves of both Speaker Henry Clay and Representative George Norris are presented as evidence for this characteristic of post-constitutional
entrepreneurship. The following discussion thus draws out these three features of our framework from the history of the committee system. The discussion as a whole reveals that various extant features of the committee system are in fact the result of a chain of idiosyncratic
historical policy debates.
Political exchange was difficult to sustain in the early years of congressional history. Congressional institutions did not yet provide the means for representatives to protect themselves
from ex-post defection on the part of their political trading partners, which made it very risky
to trade votes. Over time, congressional rules and norms evolved to restrict ex-post defection
from legislative exchange by restricting proposal power and the formulation of the content
of legislative exchange to the relevant committees. Shepsle and Weingast (1981; 1987) show
that a number of congressional institutions and rules exist that mitigate the instability of any
particular policy equilibrium, by restricting legislative choice. The rules they discuss in more
detail include a congressional rule that the status quo is voted on last, committee proposal
power, and the institution of the rules committee. These rules and institutions reduce the
number of alternatives that can command a majority of congressional votes, i.e., they reduce
the number of alternative proposals in the win set for the status quo. These specific rules
together with all the other formal and informal rules governing the committee system thus
enable congressional representatives to engage in the political exchange necessary to please
their constituents and gain special interest support (e.g., logrolling, favors to lobbyists, and
so on). Table 2 summarizes the origins of the most important institutional features of the
committee system.
One important example of a post-constitutional rule that facilitates political exchange is
the assignment of specific jurisdictions to each congressional committee. Jurisdictions provide a de facto property right over a certain issue area to a specific committee (Holcombe and
Parker 1991). Committees initiate the proposal process for issues that pertain to their respective jurisdictions and the committee chairman is in charge of scheduling required hearings.
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Standing committees with defined jurisdictions, as we know them today did not exist in the
First Congress. Instead, issues that were brought before congress usually were presented
to a Committee of the Whole. The Committee of the Whole is composed of all members
of the House of Representatives. Special committees investigated important issues further
and were in charge of drafting bills. Cooper (1970: 22ff.) suggests that early congressmen,
who considered themselves to be heirs to a “Jeffersonian tradition,” believed that legislation
should be shaped by the entire legislature. Special committees, therefore, did not begin the
process of drafting bills until after an issue had already found the support of a de facto majority of legislators in the Committee of the Whole. In the absence of rules that constrained
proposal power and jurisdictions, it was therefore much more difficult to obtain the required
majority for any legislative act.
Despite this initial commitment to majority rule and to the Committee of the Whole,
congressional institutions evolved quickly to facilitate legislative activity and political exchange by establishing a system of standing committees with defined jurisdictions. At many
points along the way, individual institutional entrepreneurs played crucial roles in influencing these rules changes. Henry Clay, a chief institutional entrepreneur in shaping the existing
committee system, for example, established committee jurisdictions almost singlehandedly.
Clay became Speaker of the House in 1811. While it is of course not possible to demonstrate
Clay’s personal motivations that led him to pursue particular changes conclusively, several
authors offer compelling accounts. Watson (1998) argues that Clay’s ideological commitment to a policy plan, which he called the ‘American System’, motivated much of his action
as Speaker of the House. This system “would raise tariffs, keep the price of public lands
high, and use the proceeds to plan and construct a national system of internal improvements” (1998: 21) A failed attempt at capturing the presidency in 1816 did not prevent Clay
from seizing the power required to bring about his desired changes. Instead of giving up,
Clay took careful steps to increase his power as Speaker. Much of his effort to augment his
direct control over a system of standing committees seems to have been an attempt to push
through his favored policies despite not being president. The rule changes he pursued were
therefore entirely instrumental. Clay pursued them only to bring about the enactment of his
favored policies. Clay’s determination to shape policy “nearly drove the President [Monroe]
to distraction” (Van Deusen 1937).
Many of the formal rules that govern the committee system today began as informal
norms. Henry Clay played a part in the emergence of many of them. Today, bills originate in
committee. Before 1811, it was still common practice to refer to the Committee of the Whole
the drafting of bills. As a first step in his effort to control policy, Clay made it common
practice for standing committees with specific jurisdictions to consider bills before the whole
House debated them. Since he also appointed the chair of each standing committee, he could
leverage significant influence over specific bills.
Cooper (1970) suggests that while Clay was Speaker, congressional norms changed to
facilitate deference to a growing number of standing committees. A system of deference
ensures that only committee members retain power in their designated legislative jurisdictions, by preventing other congressional representatives from bringing bills to the floor of
the House that have not received prior consideration by the responsible committee. The committee power, which Clay had established by defining specific jurisdictions, was solidified
by the deference norm. Cooper argues that Henry Clay supported this development directly
in an effort to fill the power vacuum that Jefferson’s departure from the presidency in 1809
had left.
The aggregation of power in the position of the Speaker continued over the 100-year
period after Clay’s departure from Congress: in addition to appointing committee chairs,
Public Choice (2013) 154:21–37
33
the Speaker quickly became associated with the powerful Committee on Rules. Eventually,
Speakership and chairmanship on the Rules Committee were unified in one powerful person.
Not all changes in congressional norms and rules benefited the Speaker directly, however.
Around the same time as the changes discussed above were brought about, the seniority
principle emerged as a criterion for selecting committee chairs. This alternative selection
criterion abrogated the power of the Speaker, by making the selection of committee chairs
rule-based rather than leaving it to his discretion. In addition, a system of seniority allows
committee chairmen to exert agenda-setting power within each committee (Weingast and
Marshall 1988).11 Despite the emergence of seniority as an informal governing principle for
the selection of committee chairs, some Speakers undermined the principle by appointing
junior members or even outsiders as committee chairmen.12
In an effort to return the power over the selection of committee chairmen to the Speaker,
Joseph G. Cannon, as Speaker of the 58th Congress, quickly removed “several recalcitrant
members from committee chairmanships.” In so doing, he “drew the reins of leadership
closer to himself by packing the key committees with his loyal supporters” (Hechler 1940:
30–31). As is apparent from this anecdote, much of the legislative power, which today rests
with the committees themselves, still rested with the Speaker of the House at the beginning
of the 20th century. In fact, the seniority principle, which is one of the pillars underlying the
committee system today, was not formalized as the central selection mechanism for committee chairs until after Cannon’s defeat in 1910. Cannon himself violated the informal rule
many times. George Galloway (1959) reports that between 1903 and 1909, when Cannon
was Speaker, the seniority rule for committee chair assignments was violated four times.13
Cannon’s enhanced authority ended during the 61st Congress in March 1910. A handful
of progressively minded members of the Republican majority, which have come to be known
as the “Insurgents,” rejected the concentration of power in the hands of the Speaker. The
Speaker had opposed their efforts on many occasions and had undermined their attempts to
draw the Republican platform into a more progressive direction. The Insurgents had made
a concerted effort to expose the Payne-Aldrich tariff bill of 1909 as a concealed attempt at
granting monopoly privilege and profit to a number of domestic industries. In their efforts
11 Committees and the seniority system that regulates membership on them have likewise been at the center
of congressional dominance models, which seek to explain where in the legislative process power is concentrated. Holcombe (1989) argues, for example, that seniority is a method of establishing property rights that
reduces the resources legislators must use to defend their positions in the legislature. See Mueller (2003) for
a further summary of the relevant literature.
12 Charles O. Jones ([1968]1987: 264) lists seven examples of violations of the seniority principle in commit-
tee assignments in the 61st Congress, between 1909 and 1911.
13 See Galloway (1959: 22), who writes that
In 1903 Representative Jesse Overstreet of Indiana, for example, became chairman of the Committee
on Post Offices and Post Roads and thereby won precedence over two members who had served
sixteen and thirty-two years, respectively. In 1905 Representative James A. Tawney of Minnesota
received appointment as chairman of Appropriations over two members who outranked him. Speaker
Cannon made both of these departures in order to promote his policies. In 1909 Representative James
R. Mann of Illinois advanced to the chairmanship of Interstate and Foreign Commerce out of his turn.
In 1915 Representative Claude Kitchin of North Carolina became chairman of Ways and Means over
Representative Dorsey W. Shackleford of Missouri, who stood next in line because the incumbent
of this post at that time was also the Democratic floor leader, a position for which Mr. Kitchin was
preferred. And in 1921 Representative Marting B. Madden of Illinois was elevated to the chairmanship
of Appropriations, of which he had only recently become a member, because the committeeman next
in line was considered too old to assume the heavy duties of launching the new budget system.
34
Public Choice (2013) 154:21–37
to change the bill before the final vote in the Senate on July 8, they faced violent opposition
from the drafting committee as well as the Speaker.
The Insurgents’ strategy represents a great example of the fact that political entrepreneurs
usually will attempt to change the rules only when other attempts at securing favored policies
are hindered. Because of the continued opposition they faced from the committee machinery, which was directed by Speaker Joe Cannon, they eventually refocused their efforts to
a higher level of institutional entrepreneurship. They now sought rule changes that would
diminish the Speaker’s power. The concerted activities of these Insurgents ended in 1910
when they finally introduced a rule change that separated the Speakership from the chairmanship on the Committee on Rules. The separation of these two positions diminished the
Speaker’s power to use procedural rules to hold up bills that were not to his liking.
The Insurgents had more or less unsuccessfully struggled since the beginning of the 61st
Congress in 1908 to bring about a rule change that would reduce the power of the Speaker,
but “Uncle” Joe Cannon had been successful at mobilizing enough support to hold on to his
joint position as Speaker of the House and chairman of the Rules Committee. The ultimate
blow to his power came almost by surprise and was the result of a resolution presented by
George Norris (Nebraska) on March 17, 1910.
Earlier in the same year, a Calendar Wednesday rule had been instituted to curb the
Speaker’s power. The rule allowed committees to call up bills of their choice each Wednesday without first being granted a place on the schedule by the Speaker. On March 16th,
which was a Calendar Wednesday, Mr. Edgar D. Crumpacker, a Republican representative
from Indiana who was otherwise not affiliated with the Insurgents, called for the consideration of a resolution regarding the 1910 census. Mr. Crumpacker had not previously presented
his resolution to the relevant committee. An argument ensued, therefore, over whether or not
the resolution was in order. Speaker Cannon sided with Crumpacker, insisting that legislation relating to the census involved a constitutional privilege and was therefore in order
whether it had been presented to the responsible committee or not. When a majority of the
House finally agreed that the Crumpacker resolution was in order on March 17, one of the
Insurgents, Representative George W. Norris from Nebraska, took the opportunity to present
another resolution that had not been placed before the responsible committee, which he had
been carrying in his pocket for a long time.14
Norris justified the presentation of his resolution with the argument that like the
Crumpacker resolution, his resolution relating to the rules of the House was also privileged
by the Constitution. The resolution he presented would increase the membership on the
Rules Committee to 15 (eight members from the majority party and seven members from the
minority). Furthermore, instead of having the Speaker as their chair, the committee members
would choose their chairman from amongst themselves. Norris’s proposal would effectively
remove the Speaker from the position of chair of the Rules Committee. The surprise of the
resolution’s introduction left Cannon without enough support and without enough time to
round up his troops. When the debate on the issue was cut short on March 19, 34 Insurgent
Republicans voted with 148 Democrats successfully to dethrone Cannon from his position
on the Rules Committee. Since then, the Speakership has been separated from the chairmanship of the Rules Committee. This entrepreneurial rule change returned power to the
chairmen of the committees of the House at the expense of the Speaker’s power. George W.
Norris, as a member of the Insurgents group, took a rare strategic opportunity to introduce
14 Norris remembers in his autobiographical sketch of the events leading up to the revolt against Cannon
certain that he had carried the resolution around for such a long time that “The paper upon which I had
written my resolution had become so tattered it scarcely hung together” (Norris 1945, p. 123).
Public Choice (2013) 154:21–37
35
a rule change, which benefited himself in the pursuit of his subjective policy preferences as
a progressive Republican. By dethroning Speaker Cannon, Norris weakened the power of
the party and the pressure of party discipline and instead increased the power of committees
within the legislative process.
In this as well as in all other steps in the evolution of the committee system that we have
described above, the rules of the political game were changed in response to the particular
purposes of political entrepreneurs who were otherwise unable to secure their favored policies. The extant rules accrued largely from various marginal adjustments to Congressional
procedures fought for by particular legislators rather than broad-based collective action.
Yet despite their idiosyncratic origins, they exert a powerful influence on the contemporary
American legislative process.
5 Conclusion
Our analysis suggests some tentative conclusions. These are meant to be suggestive of further applications of the framework we lay out above. First, entrepreneurial innovation of the
rules of the political game is a generally underappreciated phenomenon in both the study of
political entrepreneurship and the study of political institutions. Ignoring attempts to change
the rules on the margin neglects an important avenue by which political entrepreneurs seek
to accomplish their goals. For constitutional scholars, entrepreneurship offers another potential mechanism by which changes in the rules come about other than the result of exogenous shocks to the political system generating constitutional moments for collective action.
Changes to the rules also occur incrementally over time, so without some mechanism for
marginal mutations the likelihood of lock-in and path dependence may be overestimated.
Second, the possibility of pre- and especially post-constitutional entrepreneurship is relevant to the ability of formal constitutional rules to curtail opportunism and rent-seeking. The
limits of formal political rules are well-trodden territory, but the analysis of their limits often
focuses on the actual breakdown of the rules themselves rather than other rules undermining
their intended operation. This possibility is especially important for political principal-agent
models, in which formal electoral rules are often sufficient to curtail opportunistic or selfserving behavior. But even when electoral rules are followed exactly, if post-constitutional
rule-making facilitates opportunism then replacing elected officials may do little to curtail
it. The congressional committee system may be just such a set of rules.
Finally, our framework of constitutional, pre-constitutional, and post-constitutional rules
allows for a wide range of phenomena to be integrated into a constitutional political economy research program. For instance, rather than treating ideology or culture as a set of
preferences, they can be examined as pre-constitutional rules that help drive the outcomes
of the political process (Boettke 1996). This could potentially illuminate distinctive interaction effects attendant upon different mixtures of formal constitutional rules and informal
cultural norms. Vincent Ostrom (1997) offers the fullest attempt at this sort of analysis, arguing that understanding changes in language is critical to grasping ongoing institutional
changes in the contemporary United States. Our framework offers the possibility of helping
to advance that project in manageably discrete increments by breaking down the different
levels at which and kinds of strategies entrepreneurs might adopt to effect political change.
Acknowledgements We would like to thank Daniel J. Damico, Jeremy Horpedahl, and Michael D.
Thomas, the participants of the Political Economy Group at Utah State University, as well as two anonymous referees for helpful comments and suggestions.
36
Public Choice (2013) 154:21–37
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