The Supreme Court’s decision in Loper Bright Enterprises v. Raimondo is often described as ending Chevron deference. That description is accurate, but incomplete. The more important question is what the Court expects to happen next.

Viewed through an institutional lens, Loper Bright functions as a penalty default rule. For four decades, Chevron reduced the cost of legislative ambiguity. Congress could enact broad statutory language while relying on agencies to resolve many of the most consequential policy questions. By shifting interpretive authority back to reviewing courts, Loper Bright increases the cost of statutory vagueness and places that cost where the Constitution originally located it: on Congress.

Whether this penalty default succeeds depends on how agencies, courts, and legislators respond.

The Court’s apparent theory is straightforward. If Congress can no longer rely on agencies to resolve major ambiguities with judicial deference, legislators will have stronger incentives to draft more precise statutes. In economic terms, the Court has altered the price of ambiguity. Of course, critics may view the decision less as an effort to alter legislative incentives and more as a direct effort to constrain administrative power.

The difficulty is that ambiguity may not simply reflect legislative laziness. Modern administrative statutes often address highly technical and rapidly changing environments. Terms such as “reasonable,” “appropriate,” “feasible,” or “necessary” frequently operate as instructions to expert agencies rather than as gaps awaiting judicial resolution. As many scholars have observed, Congress often lacks the information necessary to specify ex ante the precise regulatory responses that future conditions may require.

The practical question therefore is not whether ambiguity exists. It is whether the elimination of Chevron will induce Congress to supply more specificity. Put differently, the question is not whether ambiguity has costs. The question is which institution bears those costs—Congress, agencies, courts, or regulated parties.

Several early predictions seem warranted.

First, agencies are likely to invest more heavily in statutory analysis and litigation defense. Under Chevron, an agency could often prevail by demonstrating that its interpretation was reasonable. Post-Loper Bright, agencies must increasingly persuade courts that their interpretation is the best reading of the statute. Legal analysis will become a more valuable regulatory resource. Whether this comes at the expense of technical and scientific expertise remains an open question.

Second, agencies may rely more heavily on procedural formality. Detailed notice-and-comment records, extensive economic analysis, and careful explanations may become increasingly important as agencies seek to demonstrate that their interpretations are firmly grounded in statutory text, structure, and purpose.

Third, litigation itself may become a substitute regulatory instrument. Many policy disputes previously resolved within agencies are likely to migrate to the courts. The result may be less administrative discretion but more judicial involvement in regulatory policymaking.

Fourth, congressional adaptation is likely to be selective rather than comprehensive. In highly salient areas, Congress may provide more detailed statutory instructions. In less visible areas, however, existing political constraints—including polarization, thin legislative majorities, and the Senate filibuster—may make additional specificity difficult to achieve.

These predictions suggest that the success of the Court’s strategy depends on legislative capacity. If Congress responds by producing clearer statutory guidance, the penalty default may achieve its intended constitutional objective. If Congress lacks either the political consensus or institutional resources necessary to do so, the result may be greater uncertainty rather than greater accountability. It is also possible the Court will find it necessary to alter its doctrines depending on the consequences of these recent changes.

The emerging post-Chevron system therefore should not be evaluated solely by asking whether courts or agencies possess superior interpretive authority. The more important question is whether the institutions expected to absorb the costs of ambiguity are capable of doing so.

Loper Bright has ended the judicial subsidy for ambiguity. Whether Congress can absorb the resulting costs may determine the future shape of the American administrative state.   

John B. Meisel is Emeritus Professor of Economics at Southern Illinois University Edwardsville. His recent research examines delegation, administrative law, and constitutional governance through the lens of governance costs and institutional design.