The governor's dilemma : competence versus control in indirect governance

No governor has sufficient capabilities to govern single-handedly; all governors rely on agents, and thus become principals. The "governor's dilemma" results from the tradeoff between agent competence and principal control. Competent agents are difficult to control because their policy contributions give them leverage over the principal; principal control impedes agent competence by constraining the development and exercise of agent capabilities. If a principal emphasizes control, it limits agent competence and risks policy failure; if it emphasizes competence, it provides opportunistic agents freedom to maneuver and risks control failure. This competence-control tradeoff applies in all governance domains: democratic or autocratic, domestic or international, public or private. We extend principal-agent theory by identifying four modes of indirect governance based on ex ante and ex post control relations: delegation, trusteeship, cooptation and orchestration. We then theorize the principal's choice among these modes as it seeks to balance competence and control. Finally, we analyze how the competence-control tradeoff contributes to dynamic instability within and across the modes of indirect governance.