Why Government Fails So Often: And How It Can Do Better (47 page)

Judges of radically different political and social viewpoints can only reason together on the basis of a few relatively simple propositions that they can all agree govern, so that disputes can be narrowly focused on their application. The
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decision, warts and all, has accomplished this…. Were we to switch to a broader framework of what is good regulatory policy or which of thirty canons apply, our debates would be less focused, our work would be more complex, and our differences would more frequently prove irreconcilable. A simple decisional framework may be essential to collegial decisionmaking in a court of widely differing views.
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Delegitimation costs
. If the complex legal landscape contains many pitfalls for the governors, it is terra incognita for the governed. In a society that values negative liberty and “personal space,” the density of the legal system—the penetration of law into every corner of human life, or what has been called “hyperlexis”
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—is bound to be a source of deep resentment. When rules are indeterminate, their
precise meanings cannot be easily grasped, nor can their applications be readily predicted. Confusion and uncertainty follow. If the rules are technical, they will often be opaque to the common mind and to common sense, common experience, and even common morality. Intelligible only to experts, the law is likely to mystify and alienate lay citizens whose intelligence it often seem designed to mock. When this Delphic law also emerges from an institutional black box that is itself dense and difficult to comprehend, its legitimacy—the sense of “oughtness” that the lawmakers hope will attach to it—is diminished.

Complexity is not neutral in its effects; it advantages some groups and disadvantages others, a fact well understood by those who seek to influence the shape of the law. Once citizens begin to suspect that these advantages and disadvantages are distributed by design rather than randomly, they will come to view complexity in an altogether different, less tolerant light. Profound cynicism about and alienation from the legal system are likely to follow. Although public disgust may occasionally prompt what my colleague John Langbein calls a “legal implosion,” this is surely exceptional. More commonly, I suspect, the public suffers excessive complexity in silence, responds with informal simplifications, or simply fails to comply.

Tax law is the great example of this problem, especially because its complexity is widely (though not universally) believed to be unavoidable.
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Although tax law includes many simple bright-line rules and sharp, quantitative thresholds, the policy context of tax administration requires exceptionally dense, detailed, and technical rules elaborated through a differentiated system of agencies and tribunals. The government’s stakes in revenue collection are the highest; it is a matter of political and programmatic survival. Many taxpayers, especially the wealthiest ones who generate the most tax revenue, seek advice from highly trained, well-paid accountants, financial planners, and tax lawyers all intent upon one thing: minimizing their tax liability by interpreting the provisions as opportunistically as possible without going over the legal line. The only way the government can prevent them from gaming the system is to knit a fabric of rules that is so tight
and seamless as to leave no opening for strategic exploitation by taxpayers and their loophole-seeking minions. (Most taxpayers, of course, cannot afford such minions. The time-value cost of complying with federal tax laws in this mind-numbingly complex system has been estimated at $194 billion a year).
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Courts are aware of this special context and usually defer to the government’s interpretation of these legal materials except where it is clearly erroneous. In a number of other policy areas—immigration and international trade, for example—the government girds for battle by adopting a purposefully complex set of rules designed to defeat every argument or stratagem that a wily, determined, sophisticated, and probably better-paid antagonist might try to deploy.

Taxpayers bewildered by tax law’s complexity and uncertainty appear more likely to violate it. In turn, voluntary compliance, which is so critical to the tax law’s integrity, depends upon its intelligibility. “Erosion of taxpayer morale,” tax scholar James Eustice observed, “is not an unimportant side effect of all this confusion—if taxpayers think the whole system is unknowable, the temptation to use self-help to fashion their own private tax shelters becomes well-nigh irresistible.”
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According to Nina Olson, the longtime taxpayer advocate at the Internal Revenue Service, complexity is the system’s greatest problem.
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All of these weighty objections to legal complexity would not necessarily be decisive in any particular policy context. A simpler regime might be even worse. The trade-off, however, is inescapable.

AMBIGUITY

All language is ambiguous to some degree—that is, capable of multiple meanings, owing to the limits of any language, including one like English with its immense vocabulary. Legal language thrives on ambiguity. And therein lies a pervasive limit on law’s effectiveness in policy making.

First, the language of law is often abstract; the more abstract the idea being conveyed, the more the language conveying it will contain
ambiguities. The most important example of this in law is “reasonable” or “reasonableness,” which are used to define the requisite standard of behavior not only in negligence law but in countless other legal contexts. Similar ambiguities pervade law: fairness (as in “fair representation” in labor law), justice (as in “just compensation” in eminent domain), dueness (as in “due process of law”), equality (as in “equal pay for equal work”), good faith (as in fiduciary law), comparability and appropriateness (as in disability law), and countless vague standards. Ambiguous formulations like these are ordinarily left to juries, judges, or agencies to define more specifically and authoritatively, with little to guide them but intuition, common experience, or (in the case of agencies) familiarity with the problem. Absent such authoritative guidance, members of the public who wish to invoke or comply with the law are left to guess at its meaning.

Moreover, the politics that surrounds lawmaking (and contract writing, which is a form of private lawmaking) makes ambiguity an all-too-valuable tool for policy makers. With intense disputes over so many issues, and with the need for some prompt resolution of them, compromise is needed. Ambiguity is the trusted handmaiden of compromise, whether the disagreement occurs among legislators, administrators, judges, contract negotiators, parents, or other decision makers. Papering over differences is perhaps the most common and serviceable way to reach a decision on a principle
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while deferring—to other times and perhaps to other decision makers or modalities—the question of how that principle will be reified in its more specific applications. Incompletely specified constitutions, statutes, contracts, and other legal instruments are ubiquitous because their advantages (agreement now, while minimizing negotiation and prediction costs) exceed their disadvantages (parties are left hostage to future events).
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No general rule can prescribe an optimal level of ambiguity; it all depends on context, and determining that level is a skill that grows with experience.

But this compromise through ambiguity carries its own risks. First, democratic accountability suffers when Congress leaves the hard policy
trade-offs to unelected agency officials (and to judges who ultimately review the officials’ actions). Congress is all too eager to pass the buck while reserving the right to castigate the bureaucrats who fill in the policy blanks that it left open. The Supreme Court’s “nondelegation doctrine,” discussed in the next section, has not reduced Congress’s strong incentives to enact vague, open-ended, buck-passing laws. To be sure, these incentives do not always carry the day. Congress sometimes passes very detailed statutes, arguably too detailed to allow for flexible policy implementation at the agency level. The Dodd-Frank law on financial regulation is a recent example.

Second, compromise through ambiguity does not solve the problem of legal uncertainty so much as perpetuate it—and the political conflict that surrounds it. The Affordable Care Act, for example, nowhere defined “affordable,” yet much of the law’s impact depends on what it means. Predictably, this pivotal ambiguity has stirred up a political hornet’s nest, stalling and perhaps crippling implementation of the act’s main provisions.
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Legal ambiguity also reduces law’s effectiveness by increasing the power of the final interpreter. This is usually the court system. In part, the highly controversial method of constitutional interpretation known as originalism reflects uneasiness with the amount of discretion that such ambiguities confer on the courts. (As Justice Robert H. Jackson wryly noted in a concurring opinion, “We are not final because we are infallible, but we are infallible only because we are final.”
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On non-constitutional interpretations, however, Congress often gets the last word.
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) With the Supreme Court deeply divided on interpretive approaches, this judicial finality adds a kind of “meta-ambiguity” to the system—that is, ambiguity about the terms on which ambiguities will be (1) identified (judges often disagree about whether a text is indeed ambiguous), and (2) resolved (judges’ opinions often create new ambiguities, sometimes more than they dispel).

A related consequence of legal ambiguity is to breed litigation. Some plaintiffs hope that a lawsuit will resolve the ambiguity and thus establish their legal right. Others claim ambiguity in an opportunistic
effort to use litigation to delay compliance, bludgeon opponents into settlement, secure better terms through negotiation, or otherwise improve their bargaining power. But even litigation that might reduce legal ambiguity remains problematic, for reasons discussed below.

DISCRETION

The existence of legal ambiguity is only one reason why officials who apply the law in specific cases—that is, judges and agency personnel—claim discretion, here the discretion to interpret law and, to that extent, to make it. But even if legal texts were crystal clear, discretion would abound. Indeed, policy makers usually design it into the system—and for good reason.
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To paraphrase Samuel Johnson on a very different subject, discretion is the tribute that law pays to complexity. But even if discretion were not designed into a legal system—indeed, even if lawmakers sought to eliminate it entirely—a residuum would persist. This residual discretion is where law ultimately ends; it is law’s most implacable limit.

The most clairvoyant policy makers cannot anticipate all the kinds of cases that inevitably arise under any complex scheme. Even if they could anticipate the general, categorical character of such cases, they could not assess in advance how the contingent facts and features of the disputes that arise under these general categories should be applied to determine the outcome of a specific conflict.
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Moreover, discretion serves a straightforward functional purpose by enabling policy makers to allocate different tasks to subordinate institutions possessing disparate competencies, analytic processes, and sources of legitimacy. It is a kind of trust by policy makers in the common sense, as well as legal fidelity, of those who will exercise it.
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When a law precludes officials from exercising discretion in the administration of a complex adjudicative scheme, it practically guarantees failure: the outcomes of many specific cases dictated by such a law will be unjust and perverse. Public dissatisfaction with the
discretion-denying scheme will grow. And the needed discretion—like a strong stream blocked in one direction—will find its way back into the system in indirect, opaque, and policy-distorting ways.

A telling example is the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, whose approach to discretion has in some ways aggravated the knotty policy problem of illegal immigration. There, Congress severely restricted the immigration agency’s traditional authority to grant humanitarian relief to the undocumented on a case-by-case basis under generally defined discretionary standards, substituting mandatory detention and removal in almost all cases. This policy has had truly perverse results. More detentions than necessary impose huge human and fiscal costs. Long-resident aliens with no criminal records and strong family and community ties here that would have resulted in discretionary relief before 1996 are being deported to countries they hardly know. The agency is constantly attacked for its reflexive bureaucratic cruelty, often by the Congress that mandated its rigidity. Nor has the discretion vanished; it simply has flowed into more opaque, less accountable channels (e.g., decisions not to arrest in the first place).
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In the far more common policy situation where Congress does allow discretion, much of the political debate centers on the delegation’s precise terms: who will exercise it, its type and breadth, the procedures that must be followed, and the influence Congress may retain over the delegate’s decision, among other issues. Some commentators denounce such delegations as abdications of Congress’s constitutional lawmaking responsibilities.
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They seek to invalidate them by invoking the nondelegation doctrine, according to which the Supreme Court struck down the New Deal’s centerpiece, the National Industrial Recovery Act, on the ground that Congress had failed to specify a limiting principle on the president’s discretionary authority to implement the law as he saw fit.
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Although this doctrine has been largely moribund since it was announced in 1935, the Court sometimes uses it to interpret broad grants of authority more narrowly.