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Monday, November 8, 2010

Holy Principal-Agent Problems: Not Just About Shirking

This article shows that the challenge of hiring someone and giving them responsibility (delegation) is more than just about the agent not doing the job. The Drug Enforcement Agency sent an informant to Pakistan, and this guy eventually became involved in the Mumbai attacks.  This is more than just someone falling asleep while on duty.  It is reflects both the challenges of this kind of work--hiring questionable people to do your bidding--and the failures of the managers of the system to do their jobs.  The former is part of the nature of the enterprise--using flawed individuals is probably going to be necessary and certainly is inevitable.  But failing to engage in oversight to see when the agent is out of control is not the way the system is supposed to work. 

Bruce O. Riedel, a terrorism expert at the Brookings Institution and a former C.I.A. officer, said the Indians were right to ask, “ ‘Why weren’t alarms screaming?’
Officials of the D.E.A., which has a long history with Mr. Headley, declined to discuss their relationship with him. The C.I.A. and the F.B.I. said that Mr. Headley had never worked with them. Privately, the agencies point fingers at each other. 
 Never mind, that is how the system works--avoiding accountability by blaming others.

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