The canonical principal-agent problem involves a risk-neutral principal who must use incentives to motivate a risk-averse agent to take a costly, unobservable action that improves the principal’s payoff. The standard solution requires an inefficient shifting of risk to the agent. This...

In contrast to principal-agency theory, the possibility of the political control of the bureaucracy depends on bureaucratic structure. In this article, I argue that the functional decentralization of responsibility and authority for policy formulation and implementation involves a net loss of...

This study defines and compares three broad theories that seek to explain bureaucratic preferences. I first argue that each of these explanations is complex — that no single measurable attribute encapsulates the entire theory. Second, I argue that these explanations are non-nested...

Purpose – Political reorganizations like that of the national performance review in the USA fundamentally alter hierarchical relations within public agencies. This paper includes a set of formal exercises to examine two logical consequences of reinvention: the increased likelihood of...

We describe a simple mechanism for achieving two goals: (1) to encourage firms to take environmentally friendly action, and (2) to make environmental protection impervious to political change. We assert that there is wide evidence now that firms adopting an environmental management system (EMS)...