Delegating to Enemies
Jacob E. Gersen
Harvard Law School
March 7, 2012
Columbia Law Review, Forthcoming
Harvard Public Law Working Paper No. 12-11
An axiom of institutional design is known as the ally principle: all else equal, voters, legislators or other principals will rationally delegate more authority to agents who share their preferences (“allies”). The ally principle is a conventional starting point for large literatures on principal-agent relationships in economics, political science, and law. In public law, theories of delegation – from legislatures to internal committees, from legislatures to agencies and the executive, or from higher courts to lower courts – universally assume the ally principle.
Yet history and institutional practice reveal many cases in which the ally principle not only fails to hold, but actually gets things backwards. We identify an enemy principle: in certain cases principals rationally delegate, not to allies, but to enemies or potential enemies — agents who do not share the principal’s preferences or whose preferences are uncertain at the time of the delegation. Our aim is to describe these cases of delegating to enemies, to explain the mechanisms on which they rest, and to offer an account of the conditions under which principals do best by following the enemy principle and reversing the ally principle. Such an account is a necessary first step towards a fully general and comprehensive theory of delegation, one that includes both the ally principle and the enemy principle as special cases.
Number of Pages in PDF File: 36
Date posted: March 7, 2012 ; Last revised: April 13, 2012