The Impact of Goal Ambiguity on Agency Rulemaking: A Case Study of the Securities and Exchange Commission’s Decision to Remove the U.s. Gaap Reconciliation Requirement for Non-u.s. Issuers
Open Access
- Author:
- Macausland, Mary
- Graduate Program:
- Public Administration
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- July 17, 2012
- Committee Members:
- Odd Jonas Stalebrink, Dissertation Advisor/Co-Advisor
Neil M Boyd, Committee Member
Jeremy Plant, Committee Member
Thomas Edward Buttross, Committee Member - Keywords:
- Rulemaking
Globalization
Securities and Exchange Comm.
International Financial Reporting Standards
U.S. GAAP Reconciliation - Abstract:
- Goal ambiguity and procedural accountability represent two of the most enduring challenges in public administration. These dual challenges are most apparent in federal agencies where Congress sometimes assigns multiple and conflicting goals to a single agency, and rulemaking is governed by the Administrative Procedure Act (APA) of 1946. The extant research provides support that goal ambiguity relates negatively to effectiveness, and that the effects of procedural accountability are circumscribed and even counterproductive given that the most important decisions in rulemaking are often made before the provisions of the APA go into effect. This study explores how goal ambiguity manifests itself throughout the rulemaking process, which includes several stages of rule development and provides for public comment prior to the issuance of a final rule. The context for the study was the Securities and Exchange Commission’s (SEC) 2007 decision to remove the U.S. GAAP (generally accepted accounting principles) reconciliation requirement for non-U.S. issuers. The SEC has multiple and conflicting goals (e.g., the protection of investors and the promotion of capital formation), which are not prioritized, thus providing considerable leeway in deciding which goal should take precedence over others at a given time. The research methodology for this study includes a longitudinal case study, and content analysis. The research examined the rulemaking process for this decision at two different points in time, including a release issued in the early stage of rule development and the formal rule proposal published in the Federal Register. Evidence was extracted from various sources, including the public record surrounding the decision, interviews, and through the literature on goal ambiguity and public notice and comment provisions in agency rulemaking. The overall conclusion from this study was that goal ambiguity was present at the SEC at the time of this decision and contributed to the rulemaking process being ineffective in providing a meaningful role for public participation. This finding challenges the normative view of agency rulemaking, which proposes that the APA democratizes the rulemaking process to ensure agency decisions are informed by affected interests and parties. The findings from this research suggest that goal ambiguity relates negatively to the normative view of agency rulemaking, and raises questions about whether conflicts about goals can be resolved in the public interest through the existing provisions of the APA.