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date: 18 January 2021

Abstract and Keywords

Principal-agent theory encapsulates a tradition of rational choice modeling in which some actor(s)—the principal(s)—uses whatever actions are available to provide incentives for some other actor(s)—the agent(s)—to make decisions that the principal most prefers. Because principal-agent theory focuses on the responsiveness of the agent’s decisions to the principal’s goals, and how this responsiveness is mediated by actions available to each actor as well as institutional settings in which they interact, it is a natural framework to study accountability in political institutions. This essay gives a basic overview of principal-agent theory and briefly reviews its application in two domains of political science: bureaucratic accountability to higher-level political actors, and electoral accountability of representatives to constituents. The essay emphasizes that principal-agent theory is in fact a highly flexible family of models, rather than an overarching set of assumptions and results.

Keywords: Principal, agent, contract theory, incentives, information rent, bureaucratic accountability, electoral accountability

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