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date: 28 June 2022

Abstract and Keywords

This chapter focuses on Terry Moe’s 1984 paper “The New Economics of Organization”, which offers an in-depth analysis of Congressional and presidential influence on the bureaucracy and suggests that these institutions, as well as their officeholders, have the incentive to influence bureaucratic policy. Moe urges scholars of public bureaucracy to emulate economists who study why firms exist in the marketplace. This chapter examines Moe’s main ideas on topics ranging from principal-agent theory to agency losses, the ability of political principals to effectively employ contract design to specify sanctions for bureaucratic agents, and how Congress and the Presidency go about trying to take advantage of bureaucratic manpower and expertise in order to meet their goals.

Keywords: Terry Moe, bureaucracy, firms, principal-agent theory, agency losses, political principals, contract design, sanctions, Congress, presidency

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