This paper derives an Equivalence Principle between organizational forms of supervisory and productive activities. We consider an organization with an agent privately informed on his productivity and a risk averse supervisor getting signals on the agent's type. In a centralized organization, the...

Regulatory independence from political control enlarges the collusive opportunities between regulators and interest groups. This is costly for current politicians because deterring capture becomes harder. However, independence also constrains future governments. Whenever future and current...