The Transaction Costs of the Administrative Presidency: Evidence From a Trump-Era Clean Water Act Enforcement Reduction

Abstract

Over the last two decades, political polarization has gridlocked federal congressional capacity to meet environmental regulatory demands. As a result, presidential authority has expanded to overcome this legislative impediment leading to a new era of “administrative presidency.” In this new era, presidents have increasingly used their administrative authority to meet politically driven environmental goals. Yet, we still know little about how federal-level executive political actions impact the outcomes and operations of local regulatory environmental systems. This study fills this scholarly void by empirically testing the effect of a federal COVID-19 Clean Water Act (CWA) enforcement reduction on Safe Drinking Water Act (SDWA) implementation outcomes for local community water systems (CWSs) sourcing from surface waters (SWs). Using a framework grounded in transaction cost federalism, we argue that a politically motivated executive reduction in federal CWA enforcement is associated with poor local SDWA implementation outcomes. We test this assumption with a differences-in-differences econometric approach using data drawn from the federal Safe Drinking Water Information System database. Our findings suggest that the CWA enforcement reduction resulted in an over 50% increase in SDWA health violations by CWSs sourcing from SWs. The implications of this study extend to U.S. water policy and environmental federalism, highlighting the need for better coordination between the CWA and SDWA and the potential risks associated with relying on broadened executive actions to drive U.S. environmental policy. Further research is warranted to understand the consequences of administrative policy changes on U.S. environmental governance.