| This study investigates how regulatory policies have evolved over time and how institutional structures surrounding an administrative agency have imposed constraints in its regulatory policymaking. In so doing, this thesis highlights principal-agency interactions in the securities regulation performed by the Securities and Exchange Commission (SEC) since 1934.; Theoretically, this study challenges traditional studies of regulation, the capture theory in economics and the principal-agent model in political science, by identifying their explanatory limitations of the dyadic and static interactions among political and economic actors. Alternatively, this study relying on an institutional approach stresses that the dynamic and evolutionary processes can better portray regulatory policymaking under a broad, complicated institutional context involving multi-layered agents, principals, and the policy environment. Moreover, it argues that the influence of political principals is not constant, but can vary over time, depending on the institutional structures that constrict the range of their policy preferences. This institutional process partly accounts for the autonomy with which the agency carries out its regulatory function with less political interference.; Empirical findings of this study generally support these arguments. Controlling attempts of political principals through budget allocation had been less effective to cause significant changes in the SEC's regulatory behavior because of counterbalancing effects of interactions among political institutions. These institutional constraints made the SEC more autonomous, leading to a steady increase in its budget appropriations and enforcement activities in the long-run. In the legislative reform process involving the Financial Services Modernization Act (or the “Gramm-Leach-Bliley Act”) of 1999, this study shows that bicameral- and committee-induced institutional structures played a more significant role than static and dyadic conventional theories presume, reflecting the balanced equilibrium legislative reform process from conflict-of-interest adjustments.; This study suggests two major implications. First, the modus operandi of regulatory agencies should be understood as an aggregate of complex institutional structures that constrain behaviors of a variety of participants. Second, when regulation is shaped within an effective checks-and-balances system, the system can avoid protecting the narrow interests of the regulated industry and contribute to the public interest by protecting the interests of investors and the economy as a whole. |
