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Public Choice Or Public Spirit: Toward a More Comprehensive Theory of Regulation

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Public Choice Or Public Spirit: Toward a More Comprehensive Theory of Regulation Western Michigan University ScholarWorks at WMU Dissertations Graduate College 4-1995 Public Choice or Public Spirit: Toward a More Comprehensive Theory of Regulation Gary R. Kitts Western Michigan University Follow this and additional works at: https://scholarworks.wmich.edu/dissertations Part of the Political Science Commons Recommended Citation Kitts, Gary R., "Public Choice or Public Spirit: Toward a More Comprehensive Theory of Regulation" (1995). Dissertations. 1748. https://scholarworks.wmich.edu/dissertations/1748 This Dissertation-Open Access is brought to you for free and open access by the Graduate College at ScholarWorks at WMU. It has been accepted for inclusion in Dissertations by an authorized administrator of ScholarWorks at WMU. For more information, please contact [email protected]. PUBLIC CHOICE OR PUBLIC SPIRIT: TOWARD A MORE COMPREHENSIVE THEORY OF REGULATION by Gary R. Kitts A Dissertation Submitted to the Faculty of The Graduate College in partial fulfillment of the requirements for the Degree of Doctor of Public Administration School of Public Affairs and Administration Western Michigan University Kalamazoo, Michigan April 1995 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. PUBLIC CHOICE OR PUBLIC SPIRIT: TOWARD A MORE COMPREHENSIVE THEORY OF REGULATION Gary R. Kitts, D.P.A. Western Michigan University, 1995 This study examines the decisions made by state public utility regulatory commissions from the perspectives of two primary theories of regulatory decision- making--the public choice and public spirit models. The public choice model posits that an agency’s decisions are responsive to the pressures placed upon the organization by competing external interest groups. The public spirit model postulates that an agency’s decisions reflect the relative values of those with authority or influence within the organization. The study hypothesizes that each is incomplete and proposes a process model based on variables derived from both theories. The research analyzed 240 utility rate case decisions issued by 12 state commissions over the 20-year period from 1974 through 1993. Each decision was analyzed to determine the issues in dispute, the positions taken on each issue by participating interest groups, and the commission’s decision on each issue. The logit form of the probability model was applied to develop a regression equation in which the probability of a specific commission decision on an issue was a function of specific external and internal factors. Statistically significant results were derived for the proportion of state product Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. derived from manufacturing, the backgrounds of commissioners, and the position adopted by the agency staff. The results suggest that both internal and external factors affect agency decision-making, but that internal factors predominate. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. UMI films the text directly from the original or copy submitted. Thus, some thesis and dissertation copies are in typewriter face, while others may be from any type of computer printer. The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleedthrough, substandard margins, and improper alignment can adversely affect reproduction. In the unlikely, event that the author did not send UMI a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyright material had to be removed, a note will indicate the deletion. Oversize materials (e.g., maps, drawings, charts) are reproduced by sectioning the original, beginning at the upper left-hand comer and continuing from left to right in equal sections with small overlaps. Each original is also photographed in one exposure and is included in reduced form at the back of the book. Photographs included in the original manuscript have been reproduced xerographically in this copy. Higher quality 6” x 9" black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. A Bell & Howell Information Company 300 North Zeeb Road. Ann Arbor. Ml 48106-1346 USA 313/761-4700 800/521-0600 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: 9531324 Copyright 1995 by Kitts, Gary All rights reserved. OMI Microform 9531324 Copyright 1995, by OMI Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. UMI 300 North Zeeb Road Ann Arbor, MI 48103 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Copyright by Gary R. Kitts 1995 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ACKNOWLEDGEMENTS I have always found it easier to start a major project than to finish. This one has been no different than the others in my life. Consequently, I should recognize those who assisted me in seeing it through to the end. First, of course, there are the members of my committee: Dr. Peter Kobrak, Dr. Donald Alexander, and Dr. Kathleen Reding. Without their guidance, I might still be lost in the wilderness with no clear idea of how to proceed. Second, I should thank my wife, Vicki, and my daughter, Melissa, for their patience and understanding. I have spent more hours away from home than a husband and daddy should. I should also thank in advance the new child on the way for reminding me that now is the time to finish. Finally, I wish to thank the many colleagues at work (including Esther, Bruce, Steve, and John) who were always ready to lend a listening ear and offer helpful suggestions. Gary R. Kitts Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. TABLE OF CONTENTS ACKNOWLEDGMENTS .............................................................................................ii LIST OF TABLES ............................ vi LIST OF FIGURES .............................................................................. viii CHAPTER I. INTRODUCTION................................................................................................... 1 II. THEORIES OF REGULATION ..........................................................................8 Public In te re s t................................................................................................ 9 Life Cycle Theory................................................................................. 13 Capture Theories ..................................................................................... 16 Public Choice ........................................................................................... 18 Public Spirit .................................................................................................21 The Five Models ........................................................................................ 24 III. EMPIRICAL STUDIES OF REGULATION................................................. 25 Electric U tilities...........................................................................................25 State Regulation of Other Public Utilities .............................................. 38 Federal Agencies ........................................................................................ 49 Transportation ..............................................................................................65 Other Public Policy A re a s.......................................................................... 67 Summary ...................................................................................................... 70 iii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Table of Contents-Continued CHAPTER IV. RESEARCH T H E M E S ......................................................................................71 Types of Studies........................................................................................... 71 Types of Variables ......................................................................................76 Summary ............................................... 88 V. RESEARCH DESIGN........................................................................................ 89 Definition of the Model ............................................................................. 92 Independent Variables ................................................................................92 External V ariables................................................................................92 Proxy Variables for Interest G ro u p................................................. s 95 Intervenor Variables............................................................................. 96 Commissioner Background Variables ........................................... 99 Staff Variables................................................................................ 103 Summary ...............................................................................................
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