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Judicial Review as a Reputational Threat to Regulatory Agencies: Evidence from Spain and the United Kingdom

Governance
Institutions
Public Administration
Power
Luis Everdy Mejia
Hertie School of Governance
Luis Everdy Mejia
Hertie School of Governance

Abstract

Judicial review of administrative actions is considered among the most important ex post control mechanism to overcome the “accountability deficit” that results from delegation of regulatory powers to independent regulatory agencies (IRAs) (Geradin & Petit 2010; Maggeti 2010; Bovens 2007). It is also argued that judicial review operates as a “strategic” legal resource that firms might use against IRAs to shape favorable regulatory outcomes, pushing the regulatory policy-making into the sphere of “judicialization” of policy-making (Magill 2014; Hirschl 2011; Shapiro & Stone 2002). This paper proposes the theory of reputation-based regulation (Carpenter 2010) as an alternative explanation of the functional role of judicial review in regulatory policy-making. Iargue that, anticipating IRAs’ aversion to reputational damage, firms can appeal to judicial review not only as a mechanism to challenge seemingly unfair decisions, or as a strategy to influence specific regulatory outcomes, but also as a way to threat regulators’ organizational reputation, in an attempt to weaken its power and legitimacy. To test this claim, I conduct a supervised computer-assisted content analysis of 1,347 administrative judicial review appeal cases filed against 14 independent regulatory agencies from Spain and the United Kingdom between 2000 and 2016. The analysis classifies judicial review judgements under a logic of three types of threats to the organizational reputation of an IRA: threats against its gatekeeping power; against its conceptual power and against its directive power. I expect to achieve two goals: (a) to identify patterns of reputational threats that target specific administrative tasks of the selected IRAs and, (b) to understand under what conditions threats are more likely to be successful (i.e. overturning an IRA’s decision in courts of appeal). This approach intends to contribute with a better understanding of how firms influence IRAs’ behavior and how the political power of these agencies is configured.