An Institutional Analysis of Legislative-Bureaucratic Relations: Does the Principal-Agent Framework Work?

Abstract

One of the most important and abiding issues in the field of public administration is about the relationships between the legislature and the bureaucracy. This issue has been examined by many scholars from a variety of perspectives. The principal-agent theory developed in the New Institutional Economics is one of the major approaches to the analysis of the legislative-bureaucratic relations. The main purpose of this paper is to examine this approach and determine whether this approach does adequately delineate the dynamics of the legislative-bureaucratic relations. Mainstream literatures on the legislative-bureaucratic relations, such as bureaucratic autonomy, congressional dominance, and politics of structure choice, are examined in terms of their compatibility with the principal-agent framework. Furthermore, an analysis focusing on the institutional dimension of the principal-agent framework is conducted in order to improve the applicability of the principal-agent framework in the study of the legislative-bureaucratic relations. Finally, based on the previous analysis, some implications about how to ameliorate the conflict between the principal and the agent are proposed.