Peter Conti-Brown, Wharton

Abstract: What prompts Congress to act? Theories abound about party politics, (over)reaction to crisis, enduring coalitions, and the “strange bedfellows” of electoral politics. This Article builds on these preexisting theories to argue that the legislative process—beginning, middle, and end—is in an important sense random, that coalitions that develop to advocate for specific legislative outcomes are temporary and include at their center administrative agencies, and that a primary driver of legislation is large and small exogenous shocks. These “punctuated coalitions”—a neologism we draw from evolutionary theory—require an external event, such as a scandal, a crisis, an election, or the appointment of this person over that person to key posts. But when these events occur, temporary coalitions and anti-coalitions coalesce around policy entrepreneurs to push for legislative outcomes that draw on preexisting intellectual currents, but also strongly reshape them. To demonstrate this theory, this Article surveys the sweep of financial legislation in the long 20th century, beginning with the Federal Reserve Act of 1913 and ending with Dodd-Frank Act of 2010. The Article argues that the study of legislation must in fact be the study of the intersection of intellectual and political history. By analyzing financial legislation through the prism of punctuated coalitions, we see not the logic of a grand cross-century design, but an organized reactions to randomness. The theory also tells us much about current debates about the institutional design of administrative agencies, the stickiness of legislative priorities, and the pitfalls of administrative adjudication. The theory also informs a more accurate view of legislative reform generally. Rather than awaiting a major crisis, financial reformers of all stripes should prepare their ideas for the exogenous shock, preferably with an institutional ally within the administrative state.