When is Delegation Abdication?: How Citizens Use Institutions to Help Delegation Succeed

Abstract

Modern democracy requires delegation. One common problem with delegation is that principals and agents often have conflicting interests. A second common problem is that principals lack information about their agents. Many scholars conclude that these problems cause delegation to become abdication. We reject this conclusion and introduce a theory of delegation that supports a different conclusion. The theory clarifies when interest conflicts and information problems do (and do not) turn delegation into abdication. We conclude by arguing that remedies for common delegation problems can be embedded in the design of electoral, legislative, and bureaucratic institutions. The culmination of our efforts is a simple, but general, statement about when citizens and legislators can (and cannot) control their agents.

Keywords: delegation, abdication, principal-agent problem, information problems

JEL Classification: D82, D73, D72