Fiduciary Rationality and Public Policy: The Theory of Agency and Some Consequences
1973 Annual Meeting of the American Political Science Association, New Orleans, LA. In Proceedings of the American Political Science Association, 1973
45 Pages Posted: 11 Oct 2007 Last revised: 27 Aug 2015
Date Written: 1973
This paper introduces the theory of agency, identifies key concepts, relationships, and logics of agency. Norms of agency are identified and discussed, including the fiduciary norm. Problems of agency are identified and discussed. Applications of agency theory are made to regulation, the legislative representative, and diplomacy.
This 1973 paper was the first to identify many of the central concepts and logics associated with the theory of agency and was the first to make applications to social institutions. This paper and Stephen Ross's 1973 paper were the first to explicitly propose agency theory, and this paper was also the first to develop the approach in an extended way. This paper is posted in order to make it generally available to scholars interested in the theory of agency.
Keywords: theory of agency, principal, agent, agency costs, fiduciary norm, regulation, authority, transaction costs, reciprocity, policing costs
JEL Classification: D23, D63, D64, D73, D80, D82, D83, L50
Suggested Citation: Suggested Citation