Is no News Bad News? Information Transmission and the Role of "Early Warning" in the Principal-Agent Model

By applying the rational choice principal–agent model, this article examines the European Union member states’ principal control of the European External Action Service (eeas) agent. More specifically, the article applies mechanisms of agency monitoring, control and sanctions that are inherent in the principal–agent model to analyse the establishment and functioning of the eeas. These mechanisms aim to ensure the eeas’s compliance with its mandate, thereby curtailing its ability to pursue own objectives that are independent from the principal. The findings reveal that the eeas is tightly controlled by the eu member states. Moreover the European Commission has tools to exercise horizontal checks vis-à-vis the eeas. The application of the principal–agent model to control the eeas is not without its limits. The model falls short of conceptualizing the role of the European Parliament, which remains an outlier to this model.

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Initiator or Intermediary? A Case Study on Network Relation of Environmental Regulatory Capture in China

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph17249152 ◽

2020 ◽

Vol 17 (24) ◽

pp. 9152

Author(s):

Yu Tu ◽

Benhong Peng ◽

Ehsan Elahi ◽

Weiku Wu

Keyword(s):

Environmental Protection ◽

Principal Agent ◽

Regulatory Capture ◽

Agent Model ◽

Structural Hole ◽

Principal Agent Model ◽

Transmission Structure ◽

Illegal Acts

Behind the environmental regulatory capture (ERC) lies a complex network of interactions and interests. Identifying the roles of stakeholders in the ERC network and their behavioral motives can illuminate the mechanism of ERC incidents, and provide policy recommendations for reducing other types of regulatory capture. Drawing on the regulatory capture and principal-agent theories, this study develops a triple-layer principal-agent model of environmental regulation practices in China. We further conduct a social network analysis (SNA) on the ERC case in the Environmental Protection Bureau (EPB) of Bobai County, Guangxi Province, China to illustrate the hidden interactions and interest transmission structure among stakeholders in ERC. The results show that the ERC presents obvious characteristics of concealment and complexity, and individual capture often evolves into collective capture. Different stakeholders are in different positions and play different roles in the network. The environmental regulatory authority, the commissioned regulatory agency, and the agency of enterprises form the core power circle of the ERC network, in which the first two play the role of intermediary and the latter acts as an initiator. They together occupy the structural hole position and dominate the evolution of the ERC network. Peripheral structure stakeholders play the role of “bridge” and profit from the expanding ERC network. It is recommended that the principle of decentralization and the balance of power must be taken into consideration. Quantitative analysis methods such as SNA should be applied to clarify accountability when punishing responsible persons. More subjects are also encouraged to participate in environmental regulations and report illegal acts actively. Finally, a blacklist system should be established in the field of environmental protection for regulating the professional and social morality of all parties.

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Paying Respect

The Journal of Economic Perspectives ◽

10.1257/jep.21.4.135 ◽

2007 ◽

Vol 21 (4) ◽

pp. 135-149 ◽

Cited By ~ 116

Author(s):

Tore Ellingsen ◽

Magnus Johannesson

Keyword(s):

Economic Theory ◽

Financial Incentives ◽

Principal Agent ◽

Agent Model ◽

Strong Case ◽

Monetary Rewards ◽

Principal Agent Model

Why do people work? Economic theory generally, and the principal–agent model specifically, emphasize the role of material incentives. But many academics, for example, work diligently year after year for a nearly fixed real salary, continuing to work hard as they approach retirement, although financial incentives are usually absent. We will argue that while economists have been right to focus on incentives, they have been wrong to focus so exclusively on material incentives. While workers appreciate monetary rewards, they also get utility from what (they believe that) others think about them. We lay out a body of evidence that, taken as a whole, makes a strong case that respect matters in the workplace, above and beyond material rewards. We discuss evidence that workers respond to attention, symbolic rewards, and trust—and even that material incentives in some cases lead to less effort. Finally, we argue that many of these observations can be captured in a standard principal–agent model, once the principals and the agents are assumed to care about respect or esteem as well as money.

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