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PRINCIPAL - AGENT THEORY (2) answer(s).
 
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ID:   107610


Principal–agent theory and the World Trade Organization: complex agency and 'missing delegation' / Elsig, Manfred   Journal Article
Elsig, Manfred Journal Article
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Publication 2011.
Summary/Abstract This article analyses the World Trade Organization within a principal-agent framework. The concept of complex agent is introduced to focus on the variety of actors that comprise an international organization. Special attention is paid to the relationship between contracting parties' representatives and the Secretariat. In the empirical part, the article analyses the role of the Secretariat in assisting negotiations and presents evidence of declining influence. It is shown how principal-agent theory can contribute to addressing this puzzle of 'missing delegation'. The article concludes with a cautionary note as to the 'location' of international organizations' emerging pathologies and calls for additional research to address the relationship between material and social sources to explain behaviour of the key actors within the complex agency.
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2
ID:   113952


Unilateral influence on international bureaucrats: an international delegation problem / Urpelainen, Johannes   Journal Article
Urpelainen, Johannes Journal Article
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Publication 2012.
Summary/Abstract The conventional wisdom emphasizes agency slack or bias as the central problem of international delegation. I show that the possibility of a unilateral influence contest is equally problematic. States can exert unilateral influence on autonomous international bureaucrats, either through rewards or through punishments, to pursue their particular interests. A costly contest results, so some states could refuse to delegate because they expect others to be too influential. The analysis has four counterintuitive empirical implications. First, international agreements often favor institutionally weak states that are disadvantaged in the unilateral influence contest. Second, states could limit the autonomy of an international organization even if this prompts bad policies. Third, a state can sometimes profitably exchange distributional concessions for autonomy. Finally, constraints on unilateral influence are possible only if a disadvantaged state can credibly commit to compensating an advantaged state for it. A central broader contribution of the analysis is to show how power politics influences the rational design of international institutions.
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