Principal Agent Problem

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Principal Agent Problem
Principal supervisor or manager Agent one who
is supervised or managed Problem How does the
principal get the agent to do what the principal
wants? Asymmetric Information Agent often has
more information than the principle, a
circumstance which gives the agent an advantage.
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Problems of Bureaucracy

• Accountability
• Equity
• Responsiveness
• Efficiency
• Fiscal Integrity
• (not just honesty but solvency)