ABSTRACT
The rise of administrative law is often said to be the most striking legal development of the twentieth century. Administrative law is worth having only because one arm of government, the judiciary, faces incentives different from the other two. The core idea of government under law requires an independent institution willing to enforce that law against the administration—both the political and the bureaucratic administration—whenever the law is broken. The agency costs limited by administrative law come in two types: political and bureaucratic. In the legal system of a modern industrial democracy, the role of administrative law is to limit the agency costs that inevitably arise from three fundamental facts about government. The basic aim of administrative law is to induce administrators to produce the optimal level of services from the government by limiting agency cost. Many common-law jurisdictions have set up an administrative division of the ordinary court or designated one or more judges as the administrative law judges.
