Making Bureaucracies Think Distributively: Reforming the Administrative State with Action-Forcing Distributional Review

This Article proposes that agencies analyze the distributional impacts of major regulatory actions, subject to notice-and-comment procedures and judicial review. The proposal responds to the legitimacy crisis that the administrative state currently faces in a period of widening economic inequality. Other progressive reform proposals emphasize the need for democratization of agencies. But these reforms fail to address the two fundamental pitfalls of bureaucratic governance: the “knowledge problem”—epistemic limitations on centrally coordinated decision making—and the “incentives problem”—the challenge of aligning the incentives of administrative agents and their political principals. A successful administrative reform must address both problems. Looking to the environmental context, this Article proposes adapting the approach taken in the National Environmental Policy Act of 1969 (NEPA) to confront the contemporary administrative legitimacy crisis. It considers a hypothetical “Distributive Impacts Review Act,” explaining what the statutory scheme would look like and detailing how it would work. The Article concludes by reflecting on potential distributional review’s appeal both to the progressive egalitarians, and to champions of efficient government.