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Organizational Structure and the Optimal Design of Policymaking Panels: Evidence from Consensus Group Commissions’ Revenue Forecasts in the American States

Authors


  • George A. Krause, Professor, Department of Political Science, University of Pittsburgh, 4442 Wesley W. Posvar Hall, 230 South Bouquet Street, Pittsburgh, PA 15260 (gkrause@pitt.edu). James W. Douglas, Professor, Department of Political Science and Public Administration, The University of North Carolina at Charlotte, Fretwell 440, 9201 University City Blvd., Charlotte, NC 28223 (jwdougla@uncc.edu).

  • An earlier version of this article was presented at the 2008 annual meeting of the American Political Science Association, Boston, MA, August 28–31, 2008. We greatly benefited from the helpful comments and suggestions of Despina Alexiadou, Sourav Bhattacharya, Dan Berkowitz, Kristin Kanthak, and the anonymous AJPS reviewers. We also thank Thomas Pluemper and Vera Troeger for making available their revised xtfevd STATA code to us. Any errors that remain are the sole responsibility of the authors. The Online Appendix document is available at the American Journal of Political Science website. All data and replication materials are available at Dataverse (http://dvn.iq.harvard.edu/dvn/dv/ajps).

Abstract

Increasing both the size and diversity of policymaking panels is widely thought to enhance the accuracy of collective policy decisions. This study advances the theoretical conditions in which improving collective accuracy necessitates an efficient trade-off between a panel's size and its level of organizational diversity. This substitution effect between these organizational characteristics is empirically supported with data on official general-fund revenue forecasts made by consensus group (CG) independent commissions in the American states. Evidence of an asymmetric substitution effect is also uncovered, whereby increasing organizational diversity in large CG commissions produces revenue forecasts that reduce collective accuracy by slightly more than three times as much compared to decreasing such diversity in small CG commissions. This study underscores the limits of organizational diversity as a mechanism for improving collective judgments when policymaking authority is diffuse among many panel members.

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