Abstract: Rising political polarization heightens concerns about politicization of regulatory agencies, prompting a reassessment of the trade-off between accountability and independence. Perceived out-group partisan oversight can erode trust in regulation and impact key markets like food and medicine—a dynamic we investigate empirically. First, we demonstrate the salience of the president-regulatory agency link in US media using TV transcript data. Second, in a pre-registered field experiment with 5,566 individuals, we test the channel using a case where both the Trump and Biden EPAs endorsed antibiotic spraying on citrus crops. This enabled us to randomize the partisanship of the administration, holding the scientific arguments constant. Out-group administration reduces support for spraying by 26%, lowers trust in the EPA’s evaluation, and raises donations to an opposing NGO by 15%. We find no effect on willingness to pay for citrus products on average, measured in an obfuscated follow-up. However, we document significant differences in effects for habitual and occasional consumers. Taken together, there is a cost to increasing executive dependence of agencies—it reduces out-party supporters’ trust and influences economic behavior, though distrust may not lower demand.

Abstract: This paper studies how central governments can deter secessionist movements by changing the decision structure of independence votes. Secession clauses — which promise to allow secession whenever a region likes — deter secession by making the decision to remain day-to-day rather than once-and-for-all as is the case under a single vote. Surprisingly, the optimal decision structure from the government’s perspective follows an alternating pattern: provide a once-and-for-all vote when the region’s desire to secede is high or low, provide a clause when the desire is intermediate, and costly waiting in between. Greater pro-independence conflict, government instability, and uncertainty about the future benefits of secession can all contribute to the introduction of a secession clause. The impact of secession clauses on stability of a union is ambiguous: allowing clauses (c.f. prohibiting them) increases the probability that secession eventually occurs, but can still improve the stability of the union in the sense of the union being longer-lived. The analysis highlights the surprising potential of secession clauses as deterrents.