Principal-agent theory in complex operations

Abstract

Originally developed for identifying costs of coordination between labor and management in economics, principal-agent theory challenged traditional explanations for friction in political relations, especially in a democracy, between elected officials and the permanent bureaucracy. Not without controversy, the approach recasts democratic civil–military relations, featuring as agent a unique, military ‘bureaucrat’ refining goals of the state, a role normally assigned to the principal. At the same time, principal-agent applications reached international institutions as a collective actor in their own right. Drawing from civil–military relations and international institutions, this article poses still greater expansion for principal-agent dynamics. Principal-agent theory offers significant promise in complex international operations mixing inter-state, state, sub-state, and nongovernmental organizations because it clearly delineates culturally bounded normative arguments from resource-based logics; it also suggests moves such as building flexible membership institutions ahead of time to improve cooperation among international actors during the next crisis.