Judicial Deference and the Credibility of Agency Commitments

Consider the following situation: In late 2004, towards the end of President George W. Bush\u27s first term, the National Highway Transportation Safety Administration ( NHTSA ), pursuant to its congressionally delegated authority, promulgates a rule that would relax inspection and testing regimes for automobile manufacturers- thereby saving those firms substantial amounts of money-if the manufacturers independently deployed cutting-edge vehicle safety technology. The research and development of this technology will require significant up-front expenditures, and automobile manufacturers must decide whether to invest the funds necessary to bring the technology to market. However, the cost-benefit analysis is not so straightforward. The predicament, as the automobile firms understand it, is that this regulatory regime may not last long enough to result in long-term cost savings. Several of the potential Democratic nominees for the 2004 presidential campaign oppose this regulation, and, if President Bush were to lose the election, the incoming administration would possess the unilateral authority to discard this new rule in favor of the previous status quo (or any other reasonable arrangement).1 In light of this uncertainty, automobile manufacturers rationally may decide to decline the offer implicit in NHTSA\u27s new rule and not invest in the costly (but socially productive) new technology, frustrating the agency\u27s regulatory aims