2. AIMS AND OBJECTIVES
Explain the nature of administrative agencies.
Define administrative agency and identify ways in which a
definition of agency affects the scope of the administrative
law.
Identify the reasons for creating administrative agencies.
Distinguish executive agencies from independent agencies.
Examine the mechanisms used to enforce a law by
administrative agencies particularly in Ethiopia.
Differentiate executive, legislative and judicial power of
agencies.
Reason out why administrative law is closely related to
administrative agencies
2
3. Introduction
Administrative law involves a challenge to the exercise of
power by the executive government.
For this reason, it is necessary to look at the composition and
powers of executive government, and at how they exercise
their powers when they take action or make decisions.
In practical terms executive government interferes in our lines
and their actions affect our lives in many ways. When we
venture on a certain business, we have to acquire a relevant
permit and license before commencing our business. Even
after we comply with such requirement, a government
inspector sent by the relevant agency enters into our premise
without court warrant and can conduct investigation.
3
4. Nature of agencies
There is hardly any function of modern government
that does not involve, in some way, an administrative
agency.
The 20th century has witnessed an unprecedented
proliferation of agencies with varying size, structure,
functions and powers charged with the task of day –
to- day governing.
Their existence and growth have been the typical
characteristics of the modern administrative state
(welfare state.)
4
5. Cont…
Administrative agencies have become a major
part of every system of government in the
world.
In Ethiopia, for instance, they are the primary
tools through which local, states and the
federal government performs regulatory
functions. The vast increase of agencies in
number and power has been observed by a
U.S.
5
6. The Meaning of Administrative
Agency
Defining an administrative agency is not an
easy task. Agencies come in a huge array of
sizes and shape.
Administrative agency- a government body
authorized to implement legislative directives
by developing more precise and technical rules
than possible in a legislative setting.
6
7. Cont…
Agencies may be defined as governmental entities,
although they affect the rights and duties of persons
are neither courts nor legislatures. For one thing it is
true that agencies are not located within the
legislative or judicial organ of the government.
Although they are within the executive branch, most
of them are not mainly accountable to the executive
branch. The term executive branch of government is
used either to refer to the president (e.g. in U.S.), or
the prime minister and the council of ministers (e.g.
Ethiopia). 7
8. Classification of Administrative
Agencies
Agencies are created with varying size, structure, functions
and powers. Some of them may be established with broader
powers; in charge of regulating a certain sector of the
economy. This is typically the case with ministries, which are
headed by a high-level government minister. Ministries not
only enforce a government program or policy, but they also
supervise and overview other lower agencies that are
accountable to them. Others are comparatively small in
structure and are charged with a very specific task of
implementing a certain portion of government policy or
programme.
8
9. Cont…
With the exception of few, almost all agencies
are under the direct control and supervision, in
their day to today implementation of
government task law, or policy assigned to
them by the enabling act. The remaining very
small agencies function independently outside
the direct control of the executive branch and
they are accountable to the legislature.
Agencies are classified or categorized based on
such mode of accountability. 9
10. Cont…
Accordingly, those agencies directly accountable to
the executive branch are known as executive
agencies, where those accountable to parliament are
called independent agencies. In Ethiopia, executive
agencies are usually accountable to a certain ministry,
or council of ministries, or the prime minister. Even
though the enabling act may subject an agency to the
control of another ministry, it has also to be noted
that they are ultimately accountable to either the
council of ministers, or to the prime minister.
10
11. Cont…
Independent agencies, are accountable to
parliament, i.e. to the house of people‘s
representatives. The establishment of these
agencies, even though they need the act of the
house of people‘s representatives for their
material and legal existence, their is
predetermined by the constitution. This
implies that their creation is not dependent on
the will of the parliament.
11
12. Cont…
Normally, the parliament retains exclusive
right to bring a certain executive agency into
existence, which includes the power to modify,
increase, or decrease the power and function
of that agency. By the same token it is up to
the parliament to terminate that agency.
However, this is not the case with independent
agencies. The constitution clearly imposes a
duty to establish independent agencies
indicated in the constitution. 12
13. Reasons for the Creation of
Agencies
Agencies are created and assigned specific tasks by
the legislature. They carry out the tasks making
decisions of various sorts and supervising the
procedure by which the decisions are carried out.
There are many reasons why administrative agencies
might be needed. Almost every governmental agency
has been created because of a recognized problem in
society, and from the belief that an agency may be
able to help in solving the problems. The following
are the main reasons for the creation of the
administrative agencies. 13
14. A) Providing Specificity
The legislative branch of government cannot legislate in
sufficient detail to cover all aspects of many problems. The
house of the people‘s representatives cannot possibly legislate
in minute detail and, as a consequence, it uses more and more
general language in stating its regulatory aims and purposes.
For instance, the house of people‘s representatives cannot
enact a tax law that covers every possible issue that might
arise. Therefore, it delegates to the council of ministers and
ministry of revenue the power to make rules and regulations
to fill in the gaps, and create the necessary detail to make tax
laws workable.
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15. B) Providing Protection
Many government agencies exist to protect the public,
especially from the business community.
Business has often failed to regulate itself, and the lack of self-
regulation has often been contrary to the public interest.
For instance, the Environmental Protection Agency is created
to regulate environmental pollution. In the absence of such
agency, business could not voluntarily refrain from polluting
the environment.
The same can be said with respect to quality of private higher
education and unjustified and unreasonable increase in the
price of essential goods.
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16. C) Providing Services
Many agencies are created simply out of necessity.
If we are to have roads, the Ethiopian Roads
Authority is necessary. Welfare programs require
government personnel to administer them. Social
security programs necessitate that there should be a
federal agency to determine eligibility and pay
benefits.
The Ethiopian Social Security Authority is established
to process pension payment and to determine
entitlement to such benefit.
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17. Structure and Organization Agency
The structure and internal organization of an administrative
agency may greatly vary depending on the government policy
and the programme it is expected to accomplish.
Some of them may have different departments enjoying a
substantial portion of power given to the agency by the
enabling act. Still there will be lower organs labeled usually as
sections with the specific tasks of the day-to-day governing.
Usually, the arrangement of the internal organization will take
so many factors into considerations, like budget implication.
However, the main objective of the form of structure is aimed
at ensuring efficiency and effectiveness in administration.
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18. Purpose of Administrative
Agencies
Administrative agencies are established by the
legislator to perform specific tasks assigned to
them by law. What they actually do is to
enforce a specific law.
They are usually charged with the day-to-day
details of governing. The agencies carry out
their tasks by making decisions of various sorts
and supervising the procedures by which the
decisions are carried out.
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19. Con…
The function of administrative agencies is closely
related to the reasons for their creation. A certain
administrative agency comes into existence when the
legislator creates an agency for either of those
reasons. The agency, by making use of its expertise
and giving close attention to detail and technical
matters, takes the necessary administrative action,
which may be legislative or judicial in order to
enforce the law.
Accordingly, the following may be summarized as
purposes of the administrative agencies. 19
20. A) Regulation
One of the key reasons for regulating economic
activities by the government is the inability of
business to regulate itself. When the government
decides to regulate a certain sector, it entrusts the
task to the administrative agencies. Agencies offer
several advantages over regulation through the
legislature and courts in the management of complex
and technical regulatory problems. Because they are
specialized bodies, they can consider technical details
more effectively than the legislature.
20
21. Cont…
When the government regulates business
its aim is to minimize the negative
impacts of a free economy.
In the absence of regulation, business
does not respond to concerns over the
environment and consumers.
Some of the justifications for regulation
include: 21
22. To control monopoly power
Agencies are often created to replace
competition with regulation. In this case the
agency may determine rate (e.g.
transportation, or electricity).
Sometimes the difference in bargaining power
may be a ground for regulation, avoiding
monopoly power of one party. Such instances
include regulation of banking, insurance and
labour relations.
22
23. To control excess profit
The agency regulates business to ensure
that business is not collecting excess
profit, which may endanger the laws of
free market and also may pose a danger
to consumers.
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24. To compensate for externalities
“Externalities” occasionally referred to as “spillovers” that
occur when the cost of producing something does not
reflect the true cost to society for producing the goods.
One example is manufacturing process that creates air
pollution for which society pays the clean up costs. A
business organization, unless otherwise it becomes sure
that there is also corresponding participation by other
companies, will not install costly pollution control
equipment. Doing so will drive up that company‘s costs
which makes it unable to compete with other companies
in producing the same product without equipment and
selling their products at a lower price.
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25. To compensate for inadequate
information
Compensating for inadequate information is a
justification for a great deal of legislation for
consumer protection.
Purchasers of food, for instance, cannot
analyze the nutritional content or the health
hazards of various food products so that there
has to be some organ that ensures these tests
are fulfilled.
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26. To compensate for unequal
bargaining of powers
Contracts between banks & customers,
insurers & the insured, employees &
employers are adhesive in their nature.
Either the consumer has to take it or
leave it. Hence, it becomes self-evident to
regulate and set minimum standards to
minimize the effect of unequal bargaining
of power.
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27. B) Government exactions
In addition to regulation, administrative
agencies may also engage in government
exactions.
Government exactions are the traditional
powers and responsibilities of agencies.
Such functions include collection of tax
and military conscription.
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28. C) Provision of goods and services
Nowadays, the government is in charge
of building and maintaining roads, high
ways and dams, the provision of police
force and other protective services.
Funding public education and the health
service may also be mentioned as
additional examples.
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29. Powers of Administrative Agencies
At federal and state levels, administrative agencies
gain whatever power they have by delegation-that is
to say, that they don‘t have inherent, constitutionally
mandated power to act. Rather, a, higher level of
government, normally the legislature, must delegate
some of its own power to the agency.
How much power is that? It depends. In order for an
agency to exist, it must first be created by the
enabling legislation. This statute is a device that sets
up the basic framework for the agency, and the set of
rules and limitations by which it must live. 29
30. Classification of Powers of
Administrative Agencies
Administrative agencies, in order to realize their
purpose efficiently and effectively, need wider power
and discretion. For this reason, they blend together
three powers of government: executive, legislative
and judicial powers. Even though in principle the later
two powers belong to the legislature and courts,
granting such powers has become a compulsive
necessity for an effective and efficient administration.
The following is a brief discussion of the nature of the
three powers of the administrative agencies.
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31. 1. Legislative (Rule Making) Power
Legislative power of administrative agencies,
usually known as rule- making power and more
formally delegated legislation, is the power of
agencies to enact binding rules through the power
delegated to them by the legislator. The complex
nature of the modern state is that such elected
representatives are not capable of passing laws to
govern every situation. Many of their lawmaking
powers, as well as the power to administer and
implement the laws, are therefore delegated to
administrative agencies. 31
32. 2. Judicial (Decision – Making)
Power
Efficient and effective administration also
requires that those entities in charge of
implementing the law be armored with judicial
power, to some extent, similar to the power of
the ordinary courts. Enforcement of law
demands imposition of sanction and taking
administrative measures and decisions. When
agencies exercise their judicial powers, they
are in effect applying the facts to the law just
like a court. 32
33. 3. Administrative Power
Administrative power is the residual power
that is neither legislative nor judicial. It is
concerned with the treatment of a particular
situation and is devoid of generality. It has no
procedural obligations of collecting evidence
and weighing argument. It is based on
subjective satisfaction where decision is based
on policy and expediency. It does not decide
on a right though it may affect a right.
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