On Principal-Agent Problems, Rogue Agencies and Systemic Government Failure: A Case Study

Otterson, James (2024): On Principal-Agent Problems, Rogue Agencies and Systemic Government Failure: A Case Study.

Abstract

Using the concept of global democratic retreat as a background, this article analyses the particular case of abuses committed by intelligence agents working for the US Department of Commerce (DOC) over a 16-year period. Given the complexity of the case, we approach it from different vantage points. Starting with the institutional context, we argue that the issues covered could only occur alongside systemic government failures. We then focus on the agents and argue that they were motivated by white supremacist values and that well-known incentive structures would have deterred them. Finally, we consider the agents’ actions and conclude that they were totalitarian in nature. Overall, this article contributes to the understanding of the idiosyncratic aspects of US democratic retreat, which helps with preventing the spread of similar undemocratic modes of operation to other parts of government and highlights issues that need to be addressed to support resilient democratic institutions.

• Item Type: MPRA Paper
• Language: English
• Keywords: Authoritarianism; corruption; asymmetric information (moral hazard, principal agent); government structure; public sector performance.
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design; H - Public Economics > H1 - Structure and Scope of Government > H11 - Structure, Scope, and Performance of Government; H - Public Economics > H8 - Miscellaneous Issues > H83 - Public Administration ; Public Sector Accounting and Audits

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