Journal of Law, Economics, and Organization Advance Access originally published online on November 2, 2005
Journal of Law, Economics, and Organization 2006 22(1):1-29; doi:10.1093/jleo/ewj011
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Political Control and the Power of the Agent
Stanford University
moe{at}hoover.stanford.edu
In the study of public bureaucracy, the relationship between political authorities and bureaucrats is commonly understood as one of principal and agent, and analysis centers on how the authorities can try to overcome the information asymmetry at the heart of this relationship—arising from the bureaucrats' expertise and other private information—to exercise a measure of control over their subordinates. In this standard view, information is the source of bureaucratic power. There is a second basis of bureaucratic power, however, that the literature overlooks. Precisely because the authorities are elected, bureaucrats can take political action—especially if organized by public sector unions—to influence who gets elected and what choices they make in office. This gives bureaucrats a political capacity to control their own controllers, putting the usual principal-agent relationship in a very different light. The purpose of this paper, then, is to make a case for the political power of the agent, and to argue for a reorientation of the current theory. In the empirical analysis, the argument is applied to the electoral behavior and impact of public school teachers and their unions—showing that they are quite active and influential in choosing the key authorities that are supposed to be governing them.