Political Oversight of the Ministerial Bureaucracy from the Perspective of Principal-Agent-Theory. Institutional Design, formal Models and laboratory-experimental Examination.

• Applicants: Professor Dr. Susumu Shikano; Professor Dr. Markus Tepe
• Subject Area: Political Science ; Empirical Social Research
• Term: from 2013 to 2017
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 238042112

The goal of this project is to formalize the impact of different institutional designs of the delegation relationship between politicians and ministerial bureaucrats based on the principal-agent theory and to examine the empirical validity of these models in series of laboratory experiments. Against these predictions, we consider individual motives and repeated interaction as potential sources for cooperative behavior in delegation situations.The relationship between political leaders and ministerial bureaucrats has been described as a delegation relationship characterized by information asymmetries. Principal-agent theory shifts the analytical focus from the effective implementation of public policies towards the efficient implementation of policies by establishing incentive-compatible institutional environments for self-interested bureaucrats. Crucial to the success of this realignment is the validity of the motivational assumptions made by principal-agent scholars. Contrary to the paradigm of rational self-interested actors, both, bureaucrats individual motivation and cooperative solutions of principal-agent constellations in the context of repeated interaction are discussed controversially in the current literature. This project focusses on the question of whether the principal-agent theory provides a reliable explanation for the behavior of political and bureaucratic leaders in delegation situations. How does the institutional design of the delegation relationship, individual motives and repeated interaction affect bureaucratic service delivery? To answer these questions, we will proceed in three steps. Building on previous work by Shikano & Tepe (2012), the general principal-agent framework is transferred and applied to the specifics of the delegation relationship between ministers and secretaries of state in three formal models (Variant 1: a single principal and ideological agents; Variant 2: a single agent and ideological principals; Variant 3: delegation chain with ideological principals). In the second step, these formal models are solved analytically assuming fully rational individuals. In the third step, the game theoretical predictions derived from these three models are tested in series of laboratory experiments on student subject pools.Empirical evidence, gained in other laboratory experiments, tends to challenge the assumption of fully rational individuals. In order to assess the extent to which differences between the game-theoretical prediction and the experimental results can be attributed to individual work motives and subject-pool-effects, we take a twofold approach. First, we measure the Public Service Motivation of our subjects after the experimental sessions. Second, the experimental sessions are conducted with civil servants from state ministries using a mobile computer laboratory.

• DFG Programme: Research Grants