Bank Supervision and the Limits of Political Influence over Bureaucracy.

This article presents the results of a study investigating the efficacy of political influence over bureaucracy in regard to banking in the United States. The relationship between elected officials and unelected bureaucrats is one of recurring interest to students of government. It is widely asserted that the first generation of public administration scholars believed that bureaucrats could and should be absolutely controlled by elected officials. Politicians made policy, and civil servants applied their neutral, nonpartisan expertise to carry out the wishes of their elected superiors in the most efficient manner possible. This politics/administration dichotomy, however, later gave way to decidedly less optimistic theories about the ability of elected officials to control the bureaucracy. According to this literature, bureaucrats enjoyed considerable, if not almost complete, independence from the "macropolitical" system. Three federal agencies oversee the safety and soundness of the nation's 12,500 commercial banks: the Federal Deposit Insurance Corp., the Federal Reserve, and the Office of the Comptroller of the Currency. INSET: Methodology.