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Appreciation of the power and limits of the principal-agent model gained by understanding its relationship with public choice theory, transaction cost analysis and property rights theory.

Public choice theory

Public choice theory argues that public servants often act in their own self-interest and may work against the public interest in order to protect or inflate their budgets and resources. This theory highlights a principal-agent problem whereby political principals are at an information disadvantage and face potential moral hazard in overseeing the activities of bureaucratic agents (Moe, 1984; Gains and John, 2007). Proponents of public choice theory

Public choice linked to capture where “… an agency whose existence is inextricably linked to the continuation of existing policy is likely to be biased in favour of existing policy – that is, the agency is ‘captured’ (Treasury 1987: 75) –recommended solutions to public choice include minimising the role of the state, reducing public monopolies, contracting out and organisational separation of roles to overcome such capture.

A premium has been placed on getting better return on public sector resources – New Public Management (UK) and reinventing government (US) –

Applied where in the PS

A range of models and reforms have been implemented around the globe in response to agency theory. Purchaser-provider separation (Aulich, 2002; Steffens et.al 1998; Street 1994), compulsory competitive tendering (Aulich, 1999), decentralisation of fiscal relationships (Tommasi and Weinschelbaum, 2007) and performance contracts and performance-based budgeting (Ferris and Graddy, 1996) are all synonymous with potential principal-agent problems.

Who is the principal

who is the principal? Only in countries with democratically elected governments is it true that the principal is the citizenry and the elected government the principal.

Lane looks upon politics as a succession of principal-agent games, starting with the electoral contract, i.e. of voting in a new national assembly and government in order to end up in the setting up of implementation agencies working under a contract with government. Thus, politics is basically contracting, which raises the issues of consideration and quid pro quo, which issues tend to be resolved differently in democracies on the one hand and authoritarian regimes on the other hand. Yet, all politics involves contractual opacity and the serious risk of a mismatch between pr本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。