The common determinants of legislative and regulatory complexity

Abstract Legislative and regulatory reforms often contain various forms of complexity—multiple contingencies, exemptions, and the like. Complexity may be desirable if the benefits of additional contingencies are higher than the increased administrative costs. Both benefits and costs are better understood by a reform drafter than by the other players involved in the reform process. This asymmetric information on the costs and benefits of complexity and the potential misalignment between the drafter and other players create incentives for inefficiently complex policies. We show that reform drafters use complexity to pander to persuade their political principals to adopt reforms. Nevertheless, institutional systems where reform drafters are overseen by political principals do not always lead to greater complexity compared to systems without overseers.