Understanding the CAF Crisis: Principals and Agents All The Way Down

One of the central ironies of contemporary civil-military relations is that most modern militaries think one theoretical approach should be applied to them while they apply another to those below them.  Huh?  

The Huntingtonian approach to civ-mil says that professional militaries should be autonomous, that professional soldiers/sailors/aviators/etc can be trusted to do the right thing if trained right.  Militaries love this because it tells themselves that they are the sole experts on military stuff, that civilians should tell them where to fight and then leave it at that.

But military folks don't give that kind of autonomy to those below them.  No, they spend incredible amounts of effort thinking about leadership and management.  Consciously or not, they live principal-agency theory--the idea that any delegation will lead to the agent being given discretion/responsibility knowing more about what they are doing than the principal giving them that responsibility.  So, you need to be careful about which agents you select, how much discretion you give them, how you oversee them, and the incentives to reward good behavior and punish bad.

Why are the Canadian Armed Forces so messed up these days?  Let's take a look via those four pieces of the delegation process:

• Agent selection: who chooses the command staff of the CAF?  The Chief of the Defence Staff is chosen by the Prime Minister and Defence Minister, and then the CDS chooses the rest--the head of the army, navy, etc. This can be good--that a CDS can come in and eventually shape the leadership of the force so that they all push in the same direction.  However, it can also be that the CDS chooses his pals, those who have done him favors over the years, etc.  In this crisis, General Jon Vance picked a guy with a checkered record to be Chief of Personnel.   The unanswered question in all of this is why the hell did he do that?  And where was the Minister when the CDS did that?  It raises questions about old boy networks and the importance of connections.
  
• So, step one: fix agent selection.  This is more than just doing 360 reviews, which are helpful at getting junior folks who might be abused to report those leaders who kiss up and kick down.  Will such evals and other testing weigh at all compared to operational performance?  
• Also, of course, don't put folks who recently served in the military in the position to oversee the military.  That is, select the right Minister/Secretary of Defence.
  
• Discretion: how much discretion does the CDS get in picking the command staff?  How much discretion does the CDS get in reforming the CAF?  When Deputy Minister Jody Thomas appeared on our Battle Rhythm podcast last month, she indicated that Vance told her to stay out of the reform effort.  It seems to be the case that Vance had complete freedom to do what he wanted, and, yes, he chose mostly not to implement the Deschamps recommendations.  
• Step two: dump the Huntingtonian approach of giving the CDS so much discretion.  Tell him what he should be doing, whom he should be doing it with, and what is to be expected.  To be clear, this is not micromanagement as it is not a matter of some civilian in Ottawa using a 7000km screwdriver to operate something happening in Kandahar at seven levels lower in the chain of command but it is management--telling the person immediately below you what their job is and then making sure they do it. 
• When researching the Canadian mission in Afghanistan, when I interviewed each commander (including Vance), they all referred to the letter of intent they received from the CDS--that defined their "left and right arcs of fire"--what they could and could not do and what they should aim for.  These letters defined their discretion.  
  
• Discretion should be related to trust--the more you trust an agent, the more discretion you can give.  The less you trust an agent, the less discretion they should have.  The delegation contract is not fixed--it can change as one learns via oversight how things are going.
  
• Oversight: how do you know that the underling is doing what they are supposed to be doing?  Who is responsible for overseeing the agent?  The Minister is the person responsible for overseeing the CDS--there is no one above the CDS besides the Minister and the Prime Minister.  The Minister can use all kinds of other agents to help oversee the CDS--the ombudsman, the Deputy Minister, etc--but the responsibility for keeping informed of what the CDS is doing--whether they are staying within the intent of the Minister--is the Minister's.  
• Step three: stop saying that looking into what the CDS is doing is politicizing anything.  When the ombudsman wants to give you info, take it.  Have your various agents report back about what the other agents are doing so that one has good situational awareness. In my question to the Minister last week, I basically asked--are you going to change how you oversee this to process.  He still seemed to be taking a very passive approach.
• The stylized metaphor for oversight is contrasting fire alarms versus police patrols (h/t to the recently departed Mat McCubbins)--do you set up a passive system where you respond only when the alarm gets pulled?  Oh, and in most fire alarm systems, the media is the one pulling the alarm--is that a desirable way to oversee the CDS?  To respond only when things hit the fan?  Or do you set up a police patrol system where you or your other agents regularly look around for trouble and via their presence--the likelihood of getting caught--discourages unwanted behavior?  So, step three is really about setting up a system of oversight that does not rely on Mercedes Stephenson, Amanda Connolly, and the rest of the media but either uses the agents one has or develop new oversight agents--an Inspector-General?
  
• Incentives: Oversight is not enough--it must be known that good behavior will be rewarded and bad behavior will be punished.  What gets one promoted? What gets one's discretion reduced?  What gets one's career ended early or shunted off to someplace less desirable?  What were the conditions that the Minister told the CDS would get him additional years?  Or that would end his term?  Given the prominence of the personnel file (again, it was moved to the front of the Defence review document even though such a review really should start with threats), you would think that not implementing the Deschamps report would be punished.  That the CDS would be sent off to retirement since he did not fulfill a key part of his mandate.
• Step four: make clear that there will be consequences for not doing what is expected.  This is really important for sending signals to the rest of the force--that the highest in the chain of command will be help accountable--that they will pay a price when they screw up.  
• Incentives are not all or nothing--it is not just about firing, although in this case...  One can also visibly reduce an agent's portfolio or discretion.  Increased oversight is seen as punishment, so do that to send a signal and to impose a cost.

There is obviously much more going on.  This framework only addresses a piece of the puzzle, but it is a key piece.  I can't help but think of Bill Belicheck's mantra right now--do your job.  What is your job?  Well, if you are Minister of National Defence, it is managing the CDS--choosing the right person, shaping their discretion, overseeing what they do with their discretion, and providing sticks and carrots.  If you are the CDS, it means managing the generals and admirals under you who then manage those colonels and captains below them and on and on. 

Principal-Agent Theory and the Trump Administration: No Principals, Heaps of Agency

This tweet got me thinking, and since I am at an airport, I have plenty of time to ponder:

Mechanisms for controlling bureaucratic agents

Kaufman 1960: organizational culture
McCubbins & Schwartz 1984: police patrols and fire alarms
McNollGast 1987: administrative law
Giuliani & Parnas 2019: stalkers

— Ken Schultz (@KSchultz3580) January 15, 2020

A caveat before I begin: I desperately avoided P-A theory in grad school as it was all the rage among the Americanists in my grad program (McCubbins saw himself as, well, either the Emperor or Darth something and I didn't disagree).  Alas, I succumbed when working with David Auerswald on the NATO and Afghanistan book because it was entirely about delegation.  Since then, well, I see P-A everywhere, including the movies.  Plus I assign it in my civ-mil class as a better way to think of civilian control of the military (thanks to Debbi Avant and Peter Feaver).

Once again, the core idea is that whenever a principal (a boss) hires an agent, the agent knows more about what the agent is doing than the principal does.  This information asymmetry means that the agent can do more or less than what the principal desires (tis called shirking either way).  One manages the P-A problem by selection agents carefully, granting more or less discretion depending on trust and risk, overseeing through a variety of strategies (police patrols, fire alarms, community policing), and incentives/sanctions.

How does this apply to the Trump Administration?  Well, of course, the first assumption is that the principal wants to control the agent. Not really sure this is the case here since Trump likes chaos among his advisers and playing them off against each other in the dumbest possible imitation of FDR.   The problem here for any agent of Trump is that one cannot tell what Trump is going to do since he has no principles---yep,  a principle-less principal. One core aspect of being an uncertainty engine is that Trump has no coherent, consistent preferences or values except ego gratification, greed, misogyny, and white supremacy.  His short-attention span, his refusal to read or to do any of the real work of a Presidency means that the agents are both confused and confusing.  While this gives Trump some plausible deniability ("I am too stupid or ignorant to know what I am doing and what my agents are doing"), it does mean control is problematic.

One way to handle the P-A problem is to pick highly qualified, like-minded agents who are loyal.   Hmmm, it seems that Trump's circle of trust is very narrow and not based on quality. Picking folks like Dershowitz and Guiliani suggests that tis far more about fealty than anything else.  While these guys seem quite loyal, Trump's abuse of them and their inherent tendencies suggests that they will turn on him just as quickly as Trump turns on them.  See all of the folks exiting the administration, with Scaramucci being a, um, model.  I keep referring the bottom of the barrel being thoroughly scraped, and the folks Trump/Giuliani used to get Ukraine to throw dirt at Biden exemplify this quite well.  The stream of text messages screams this scene from the Wire (NSFW):


To be fair to Trump, he didn't just hire bunglers.  He also hired the worst possible people, some of whom are way too competent in doing bad stuff. Bill Barr comes to mind.  Stephen Miller as well.  So, among the barrel of awful, there are some who are really good at doing harm, at engaging in arson.

Ok, the agent selection of this administration is, um, problematic but perhaps works for Trump.  What about discretion?  Does Trump grant wide discretion or does he give specific orders with narrowly defined "arcs of fire"?  Um, damned if I know.. but I would guess that Trump does not give well-defined instructions.

Oversight?  Definitely fire alarm.  That is, he relies on pitting his staff against each other and on watching the competitive leaking on Fox.  These are not the most reliable fire alarms as each agent competes to be the favored one at the expense of others.  Not all competition is healthy or productive.  So, stories get planted to make the other agents look bad, and Trump does not possess the information or the energy or the critical mind to assess the competing claims.  Again, the idea of oversight is to get information to overcome the asymmetry problem, and that requires inquisitiveness and critical thinking.  Ooops.

Incentives? Ah, here's the primary way that Trump controls his agents.  As long as one is in the administration, one has carte blanche to earn money at the expense of the taxpayer.  Corruption is not a bug in this administration but a feature.  As long as you serve Trump loyally (or Trump perceives as such), you can extract rents in a variety of ways.  This administration will go down as the most corrupt ever because Trump, the projection machine that he is, thinks that the only real motivation that gets people to do stuff is personal monetary interest.  Machiavelli might have warned that Trump is merely renting support and loyalty rather than buying it, but since Trump has a short attention span, I don't think he cares about that distinction. 

The problem with this tool is that Trump does not have a sophisticated system of controlling the graft--it is really access or no access, in or out.  Which means it is not very good for controlling the agents.  

Together, all this means that the people in the Trump administration are mostly out of control.  This does not mean that Trump is not responsible for what they do.  It means he is very responsible for creating this climate.  He owns all of it, even as he denies responsibility for anything that is reality-based. 

If we survive, the next couple of generations of political scientists are going to puzzle through the debris to determine the dynamics that shaped US domestic and foreign policy in the Age of Trump.  I think a common starting point for these folks will have to be realizing that there is not only no strategy (which requires information and some effort to understand the adversary's preferenes), but there is also little control.  The agents are amok as their boss ruthlessly avoids having information about what they are doing and is quick to throw them under the bus.  So, the key is to get as much cash as possible, commit as much arson as one can before one gets tossed.  And then write a book to make more money and see if one can find a fellowship at Harvard.

Trump is a Crappy Principal

Some epic threads by Naunihal Singh reacting to the anonymous op-ed in the NYT and how people call it a coup.  Naunihal said (a) not a coup;

Thread: Why I do not consider what Woodward is describing in the White House a coup. There has been neither an attempt to change executive nor regime. Quite the opposite in fact. @SeanDEhrlich @sgadarian @dadakim @texasinafrica (1/n)

— Naunihal Singh (@naunihalpublic) September 6, 2018

(b) members of the government not doing what the boss says is pretty normal, raising Princpal-Agency theory:

ADDENDUM: I hadn't realized I had an audience beyond a few political scientists. It may be useful to explain what a principal-agent problem is. It's the problem of delegation. You want somebody else to act on your behalf but they don't always want the same things you want. (1/n)

— Naunihal Singh (@naunihalpublic) September 6, 2018

The funny thing for me is that I spent my time at UCSD and beyond trying desperately to avoid P-A theory since it was hegemonic among the Americanists (those who study American politics) and was infecting the other subfields.  I rebel against such stuff.  But 20 years later, when I was curious about why countries behaved differently in Afghanistan, I fell into the trap that is P-A. 

How do you make sure that those who are below you in the chain of command do what you want?  Tis classic question in all areas, like how do I get my research assistants to find what I want, how do I get my teaching assistants to handle the class as I want, etc.

In the Dave and Steve NATO book, we build on Feaver and Avant and other civ-mil people who use P-A theory, and focus on four key issues when one is trying to hire someone to do a job, knowing that the person or agency hired will know more about what they do than the one doing the hiring:
1) Principals should hire agents who think like them and have similar preferences, so that they do what the principal wnats
2) Principals should delegate as much discretion to the agent as required but not more than that (twin perils of micromanagement and loose agents)
3) Principals need to figure out how to provide oversight so that the agents know that they might/will get caught if they do not do what they are supposed to do.
4) Principals need to provide incentives--rewards and punishment depending on whether the agents do what they are supposed to or not.

Which gets to Trump as a lousy principal:
1) Did Trump pick people who shares his values/beliefs/views?  Well, if pure opportunism is the key characteristic, then getting people just like Trump is pretty dangerous to him.
2) Trump is lazy and incurious, so he gives everyone else responsibility without providing much in the way of clear instructions
3) Trump oversees by watching Fox.  Sure, he sets up his people as rivals so that they report on each other, but that is a reckless and unreliable form of oversight.
4) Trump doesn't keep his promises, famously so, so the incentives thing is hard to work out. People may or may not be punished or rewarded.  So, they may just tend to rake what they can while they can since this whole thing may fall apart at any moment.

So, lots of Trump's underlings don't do what he wants because he is a crappy principal. It does not make it a coup, but it does make it all very, very problematic.

Anyhow, an evening of edification thanks to Naunihal.

Trump as the Political Scientist Full Employment Machine

Ok, Trump may or may not challenge all existing wisdom that we have in political science (I tend to think our theories explain much of the Trump phenomenon quite well).  But what we do know is that he is creating a lot of work for future political scientists.  Lots of research agendas are being born every day, like: are tweets policies? Do distractions work whether intentional or not?  How does a country manage to make its allies fear abandonment and entrapment at the same time?

For me, the "fun" item this morning is this notion that Trump and Kelly have agreed to a truce.

BREAKING: The @WSJ is reporting that White House Chief of Staff John Kelly is “safe” in his position after reaching a truce with President Trump.https://t.co/2kiZ8dUatJ

— Paul Szoldra (@PaulSzoldra) March 16, 2018

 The only possible response to this is Whuck?!!  As in WTF?!!!  It directly challenges the core notions of principal-agent relations (remember, I didn't start out on that theoretical track but succumbed to it thanks to a NATO book on delegation).  While we may forget, Trump is the principal--the boss--who has hired an agent--John Kelly--to do his bidding.  John Kelly's job as Chief of Staff is to manage Trump's time, information flow, and activities so that Trump can be successful.  Kelly is not a peer of or equal to Trump--he is a subordinate.  In principal-agency theory, the agent can often have conflicting incentives or interests so that they do not want to work hard or they want to do the job the way they see fit (both are called shirking).  So, much of the trick in P-A theory for the principals is figuring out ways to vary the discretion the agent has, design systems of oversight, and the provide rewards for good behavior and penalties for bad.

Perhaps a truce could be considered one of the means by which the principal makes sure the agent is behaving appropriately?   Ordinarily, no way.  Because in a normal p-a relationship, the agent can't threaten the boss.  What does it mean to have a truce?  That both sides will stop firing on the other, right?  Well, how does a subordinate get away with saying that I'll stop attacking you if you stop attacking me?  There should be no real latitude there.

Of course, the challenge is this: Trump is a truly shitty principal.  The evidence: normal principals do not fire, compel to resign, or lose dozens of operatives in the course of a year.  Principals ordinarily do not want to waste time and effort with the churn of replacing personnel.  What happens when principals lose their agents?  They have to find new ones, and if one picks the most suitable ones first, then one loses something when replacing generation after generation of agents--the quality of the individuals may go down, the distance between the preferences of the agent and of the principal may widen, etc.

Trump is a lousy principal because not because he delegates lots of discretion to his agents.  He is lousy in part because he revises the delegation contract all the time--giving responsibility to a person and then overriding them capriciously.  His form of oversight is rivalry: encouraging the various agents to compete with each other.  This would be fine if Trump was as smart as FDR.... but he is not.  So, instead of getting conflicting advice and then deciding which path is best, Trump requires his people to compete to suck up to him and undercut each other, which they do, leading to all kinds of communications breakdowns, policy failures, and public displays of incompetence.  Finally, Trump's main form of incentive (other than allowing his people to steal from the American people) is to humiliate them.  Not sure that works for long.  So, bad delegation, bad oversight, bad incentives.

Which ultimately means that one of his agents threatens him, leading to a truce.  This means that political scientists using principal-agency theory in the future will need focus less on why agents might shirk and more on why principals might screw up their relationships with their agents.

In short, lots of presentations start with "here's this puzzle," and Trump is providing ample puzzles for the next generation.  Good luck, kids.

I So Want a Crisis in Civil-Military Relations

I write much about how it is important for the military to follow the civilians with the civilians having the right to be wrong.  Today?  Not so much.  I don't expect the military to contradict Trump directly on banning transgender people.  I am not going to bet on Mattis doing anything.

What do I hope for?  Principal-agency theory.  Huh?  There are lots of questions about this policy that was announced in a tweet.  The big one is this: who will be going through the personnel of the US armed forces to kick out the transgender soldiers, sailors, marines, air force folks (have not yet found a non-gendered substitute for airman)? When orders come on down from on high, how will implementation play out?  P-A theory starts with the idea that the agents (the folks lower down on the chain of command) have more information than the principals (el Presidente for Life Trump).  So, they can choose to be enthusiastic and follow the orders and then some, doing too much (consider the ICE folks).  Or they can choose to shirk and do less:  "Oops, found no transgender here!"

While the new "policy" is awful, it is not clear what will happen.  My best guess is that enforcement will be uneven.  The Marines will probably be enthused in general because, well, they have been the most regressive branch of the services.   Special Operations?  Probably will ignore this rule as they tend to ignore many rules, and there has been at least one transgender special operator who came out in the last year.  The more folks know people who are x, the more accepting they are (I think).  Will there be much oversight over this new policy?  Will Congress make sure that the discrimination machine is in high gear?  Probably not as they are too busy trying and failing to pass legislation. Will the Office of the Secretary of Defense spend much time monitoring this?  Still understaffed and overwhelmed.  So, yeah, officers can shirk.  Will they?  I have no idea.

And yes, the impact is beyond the military, as Trump gives yet more license to those who hate and fear to bully those who are vulnerable.  He did it last night with his speech about immigrant "animals" and he did it this morning with his tweets.  Trump continues to surprise me with how thoroughly awful he is--my imagination can't keep up with him.

Yes, this is another day where Trump's awfulness makes me have to try to figure out which conflicting values I want to fight for and which to compromise: tolerance/acceptance/freedom for LGBTQ or good civil-military relations?  Kind of like the feeling one gets when saying Sessions should stay for the rule of law.  I guess I can compromise my focus on civil-military relations since that is headed into the toilet anyway, as Trump's speech to the sailors last week indicated.  Oh and his constant reference to "his generals."

No matter what Trump does, he finds a way to destroy institutions and norms. 

Rooted for Shirking, Wrong Again

I had a good conversation yesterday at the ISA with a former student as we argued a basic point--does it matter to the individual Customs Border Protection agent whether Congress is not engaged in oversight.  This conversation reminded me how often I am wrong.... alas.

I argued  last month that one hope in the Trump era is that the various agencies would shirk--would do less than what Trump wanted, would perhaps undermine his policies by implementing them in ways that Trump/President Bannon didn't intend.  It turns out that it probably depends on the agencies and the agents more than I speculated.

My original post was about the CIA, which had been attacked by Trump and might just have heaps of people who see Trump as a threat to the US.  What we can learn from the immigration fiascoes is that the ICE/CBP people might have attitudes,  dispositions, preferences that either align well with Trump or are more enthusiastic. 

When the first immigration ban came down, it was a mess, which gave agents more discretion to do more or less.  That they could interpret the guidance that was poorly developed however they wanted. And what did they do?  They did more: during that hectic weekend and since, they have prevented not just Muslims from the seven key countries from entering the US, but despite agreements between Trump and Trudeau and Trump and the UK, the CBP and associates have kept out Canadian and British Muslims.

How does this make sense in a principal-agent framework?  That these folks have two principals (President and Congress). The first has pretty much told them via his speeches and tweets that he would not mind if these agents exceed their authority.   The second, Congress, has shown no interest in investigating what went wrong.  I argued with my student that Congress could matter if one could imagine that it would do oversight--hold hearings about what happened, call to testify individual officials up and down the chain of command in DHS, and maybe even move money around to punish those offices that transgressed.  OK, STOP LAUGHING--it could happen.  Ok, hardly likely, especially with key Congress people making it clear that there will be no oversight over the Trump admin--just ask Jason Chaffetz, head of the House Oversight Committee.

The argument with my student was whether the folks on the ground care about Congressional oversight.  I think so--based on my experience hanging out with the officers in the Pentagon, but I could be wrong.  Right now, it does not matter, since the GOP have no intention of overseeing anything.

The larger point is that shirking can mean agents do more or less, so in this time of less oversight, the question is really about agents and their dispositions.   Which means agent selection and self-selection matter a great deal.  And that probably is bad news with many agencies populated by people who might actually have some enthusiasm for Trump's agenda, such as the FBI, ATF, ICE, and other law enforcement.  It may be that the foreign policy types--CIA, State, US military (sort of)--might be opposed to Trump's bad ideas, but, alas, it looks like the forces of repression may just be very enthusiastic.  Not good at all.

Woot! Leaks! Am I a hypocite?

I am thrilled about the leaks spilling out of the Trump administration about ties to Russia and all that.  But I consider Snowden to be a spy, and was not a fan of Chelsea Manning.  Am I a hypocrite?  Hells yeah, but not over this.

How so, Steve?  The big difference between what Snowden and Manning and these leaks?  Volume mostly.  What I minded about Snowden and Manning was the indiscriminate theft and release of information.  What I like about the latest leaks? It is selective--the leaks focus on particular policies/stances/conversations that are important for national security.  That Flynn had way too much contact with the Russian ambassador. That other members of the Trump team have had way too much contact with Russia.  That DHS was proposing to have the National Guard round up illegal immigrants.  These are specific things that the public had a need to know, not whole catalogs of stuff that had been sucked up and pushed out into the internet. 

Is this a distinction without a difference?  I don't think so.  To be clear, I do think that Obama's team spent too much time focused on leaks, that they should not have pursued reporters for their reporting of leaks.  Every democratic government leaks, and the iron law of leaks is that the more you seek to block leaks, the more leaks you are likely to have.  For a similar dynamic, see Princess/Senator/General Organa classic line, with English accent for emphasis. 

But overall, I find leaks not to be as problematic as floods.  Democracies actually need leaks form government to reveal things when the government is not behaving ethically, legally, wisely (the last one is the tricky one).  We do need secrecy for a variety of reasons, and, yes, we do need to spy on friend and adversaries.  International relations is not so civilized that we don't reach each other's mail.  So, am I a hypocrite?  Not on this.  But call me out on my other stuff.

The Inevitability of Principal-Agent Theory

My resistance seems to have dominated my destiny.  When I was in high school, my worst class was French, and it was not even close.  So, of course, I end up in Quebec for ten years.  In grad school, I avoided the Americanist classes and especially those taught by a particular one.*  As a result, I did not drink deeply from the dominant thinking in that department at the time--principal-agent theory.  I dodged it for more than a decade, but when it came time to study how and why countries controlled their troops in puzzling ways in Afghanistan, it was the obvious way to frame the project.  And now I can't stop seeing it everywhere, from the Avengers to Breaking Bad to Star Wars, yes, contemporary politics (not to mention the new project).

* Experts on this stuff might cringe at how I approach P-A precisely because my training on this is so incomplete. All my career I have wondered into literatures that are outside my area of expertise.  Oops.

The basic idea is this: anytime someone (the principal) hires another person (the agent) and gives them some responsibility, the agent will know more about that responsibility than the principal.  The agent is simply closer to the matter at hand and focused on it, while the principal delegated responsibility precisely because they did not want to be doing all the work to make sure the particular work was being carried out.  There is inherently slippage between what the principal knows and what the agent knows WITHOUT presuming that the agent has different beliefs about the task or is deliberately acting against the principal's wishes.

Agents may simply not a perfect understanding of the intent of the principal.  As a professor hiring research and teaching assistants, I have often given lousy instructions which then leads to either the assistants asking for more information about what they are supposed to do or they try to figure it out.  I suck at delegation.

Why am I thinking about this now?  Besides the daily work on the comparative legislatures project (how/why do legislatures engage in oversight over their armed forces in varying ways) and the big grant project where P-A is the theoretical glue, I think we are headed towards peak Principal-Agent dynamics in the years ahead in the US.

For less conflictual P-A relations, principals ought to pick agents whose views of the problem and of the solutions are highly congruent.  Given Trump's uncertainty and conflicting views, this is going to be mighty hard for those he selects--the White House staff and the top political appointees.  The gap is likely to be far wider with the civil servants in the bureaucracy because Trump is the least conventional thinker (thinker?) they have ever experienced.  The latest example--using a spot that is meaningful to the members of the CIA as a bully pullpit to rail against the media.

The second step in the principal-agent relationship is to establish how much discretion is to be delegated.  Trump has indicate that he would delegate a great deal, except for when it comes to a few key issues.  More delegation is inherently neither good nor bad, but more does open up more room for more slippage.

So, the key would be the third step: oversight.  Figure out ways to keep an eye on the subordinates so that they know they are being watched, and, thus, less likely to use their authority in ways that are undesired.  The problem is that this requires .... expertise.  The more one knows about the stuff, the more one can detect shirking (deviations from intent).  Outside of DoD with Mattis and a few other spots, few of Trump's appointees have any familiarity with government and some have an appalling lack of expertise on the issue at hand (Carson is the extreme example).

The Trump folks have focused on the fourth part of P-A management--incentives.  They are essentially threatening to fire people who deviate.  All those requests for lists of names of people who have taken stances the Trumpsters don't like are efforts at intimidation.  Threats may deter some agents, but are likely to antagonize others.

By generating hostility with the agents, such as criticizing the CIA and their work and by putting lousy stewards in place and by being an uncertainty engine, Trump is going to encourage shirking on a massive scale.  Shirking, to be clear, is when the agents do not do as intended.  They can do more and they can do less and they can do differently.  They can shirk because their standard operating procedures tell them to do stuff that is not what principal wants, they can shirt because they think they have a clearer idea of what they should do, they can shirt because they think that the policy from on high is misguided.  They can give less information back to the principals.  They can selectively implement complex laws and procedures.  And, yes, they can leak.  They can share with the media tales of the principals' bad leadership, they can share stories of how the new policies are likely to hurt Americans and risk wars.  And on and on.

So, for the US media, the fire alarm in this model--the folks who point a spotlight at bad government policy and yell about it until the Congressfolk and voters pay attention, are in for some fun days ahead.

And cracking down on leakers rarely leads to good things (Watergate, some of Obama's troubles).  As always:

Practicing Kremlinology at Trump Tower

That Trump was Russia's favorite candidate and that Russia tried to put its thumb on the scale is not a surprise.  Perhaps the biggest surprise lately has been the general pattern of Trump's appointments:

Trump cabinet picks:
EPA against science
AG against justice
Ed against public education
Hud against fair housing
HHS against healthcare

— Ari Berman (@AriBerman) December 7, 2016

And now a labor secretary against labor https://t.co/JOs0XkZfCH

— Ari Berman (@AriBerman) December 8, 2016

The only appointments that don't seem to be aimed at burning down their agencies are the various generals, which, as I have argued, provides some small comfort.  Do these choices indicate that Trump has a master plan to sow chaos? That he is a fierce libertarian who wants to remove government from society?  No, probably not.  There was little indication during the campaign that Trump is that hostile to most of what Washington, DC does.

So, what can we make of this?  For those who want to focus on Trump's meetings, it shows that meetings matter very little for reading Trump's intentions.  Meet with Gore and then pick Pruitt for EPA?  Pretty sure this does not mean a serious pursuit of climate change targets.  For those who want to emphasize Ivanka Trump as a key influencer, again the EPA decision is revealing as her apparent priority is climate change and her father chooses a guy who considers the EPA to be essentially his mortal enemy.

Who in the Trump inner circle wants to burn down the US government and create chaos?

Ignorant Critic or Informed Overseer?

The joy of blogging is that one can come up with whatever title one wants.  An agony of academic publishing is that one cannot do the same for articles published in academic journals.  However, getting published is the thing, so I am mighty pleased that the first piece of the Phil/Dave/Steve project on legislatures and oversight over the armed forces of the world's democracies is now published: "Public critic or secretive monitor: party objectives and legislative oversight of the military in Canada."  The big question, of course, is how did a paper on Canada get into West European Politics?  The answer: tis part of a special issue on executive-legislative relations and foreign/defence policy.

* Dave has a separate piece in the special issue.

Our entire SSHRC-funded project started with me being puzzled, driven by my growing up in the US: what do you mean, the defence committees of the Canadian Parliament do not have security clearances?  That they cannot see the secret stuff and ask generals/admirals about operations?  If the legislators don't have access to classified info, then how can they hold the executive to account?  Information is EVERYTHING in principal-agency theory--that information asymmetries mean that agents can do more or less than what the principals desire.  Usually, principals try to figure out ways to overcome the asymmetry, but in Canada, not so much.  So, the paper ponders why parliamentarians would prefer to be a public critic (ignorant critic) rather than secretive monitor (informed overseer).

The answer focuses on how institutions and party politics focus parliamentarians not in good governance but on point-scoring.  We use the Afghanistan detainee controversy to figure out this puzzle, ultimately realizing that politicians doing oversight behind closed doors get little political advantage while shouting in parliament, with or without good info, is viewed as better for the next election.

Why is this relevant today? Well, first, this puzzle has led to grants and fellowships and, thus, my trip to Japan to see how it works over there.  Short answer: I don't know yet as I still have more interviews to conduct.  Second, the Liberals came into power seeking to create some oversight over the secret stuff, giving some parliamentarians some access to the secrets.  However, this new body does not really fix the problem that we identify (our comparative project aims to understand not just the attitudes towards oversight but the effects of different forms, so perhaps Canada is not so problematic).  Why not?  First, as Phil has written elsewhere, it is not a parliamentary committee--the real principal for this new committee is not the Canadian Parliament but the Prime Minister who can restrict access to information quite easily.  Second, the focus of the entire discussion has been on surveillance/intel and not on military operations.  This body is not going to be overseeing the Canadian Armed Forces, so the only elected officials in Canada that have any clue about what secret stuff the CAF is doing are the Prime Minister and Defence Minister.

For me, that is problematic.  Why?  If war is too important to be left to the generals, as Clemenceau said amid the increasing piles of bodies coming home in World War I, then democratic oversight of the military is too important to be left to the executive. Why?  Because Presidents/Prime Ministers/Ministers and Secretaries of Defence have incentives to hide mistakes (Abu Ghraib anyone?) and also might be tempted to use the military secretly in ways that are either unlawful or unwise.

Living in Canada made me realize that not every country has multiple Armed Services Committees who are tasked by the greater legislative body to oversee the deployment of the armed forces.  Indeed, it may be that the US is very exceptional.  Yes, other countries have legislatures that can and do vote about whether to deploy or not, but the question for us is: what next?  Do these bodies follow through and see that their intent, their limitations, their caveats are adhered to?  Not so sure, so the work continues. 

Who Guards the Guardians? Not the UN

Every time I think I am out, they pull me back in.  No, not leading the mafia.  Principal-agent theory.  Yep, and I blame Stan Lee.  How so?  I saw the new Captain America: Civil Wars movie... explanation below the break:

Thinking about Deaning

I have had only limited interactions with Deans in my career.  I have met them when interviewing for jobs, I have tended to see their impact via the interpretations espoused by my various Chairs, and I have bumped in them at various events.  So, I cannot speak with great certainty about what a Dean is supposed to do.

But I have been thinking about that as I ponder the UBC story, as a key and somewhat underplayed element has been the role of the middle level management folks, the Deans, in pressuring the professor.  Lots of attention on the guy at the top and the professor getting pressed after blogging about stuff, but the Deans?  Not so much, not yet.

And this raises the question: are Deans supposed to thoughtlessly transmit the dictats of the higher ups?  Are they just transformers in the sense of electricity: to step up the input and intensify as the flow of criticism passes through them to those under them?

Because I have read too much Principal-Agency Theory, and co-authored a book on discretion on the Afghanistan battlefield, I tend to think that management folks have discretion and competing interests.  Yes, the bosses at the top have heaps of power, but the managers in the middle must take seriously not just the bosses but also the interests of those below them.  After all, if they lose credibility and legitimacy with those "under their command," then they lose the ability to lead and will eventually face crises that may lead to their replacement. 

So, it seems to be that Deans probably have some discretion about how to interpret the messages from on high, and that this discretion can vary over time, among institutions and within institutions.  Besides the variance in actual discretion, the question then focuses on how profs use that discretion. 

My favorite case of this is from my old employer: Texas Tech.  When the Chancellor wanted to put a disgraced Bush official on the faculty, the Dean of the Law School said hell no.  When the Chancellor then asked the Dean of the Faculty of Arts and Sciences, a person who thought receivership was such a cool idea that she swapped the chairs of two departments that were not terribly dysfunctional.  This Dean said, sure and twice on Sundays!  So, TTU got a bit of a black eye on the media for paying a Bush failure to teach Political Science.  Two deans behaved differently, partly because of relative power and prestige and partly out of inclination.

Coming back to UBC, Berdahl details how she was "pulled aside by our newly-appointed Associate Dean of Equity and Diversity during a conversation I was enjoying with colleagues."  Yep, the Dean responsible for Equity and Diversity saw that his/her job was to undermine both by pressuring faculty.  Can any UBC prof consider this Associate Dean to have any legitimacy after selling out his or her mission due to pressure from the Board?  I would think not.

So, as UBC goes forward, I hope the attention does not focus solely on the very top as things are broken in the middle as well.

Blog Posts as First Drafts

I wrote about proxies yesterday as principal-agent problems.  Today, I gutted the theory and had it published at The Globe and Mail.  So far, the fans of Russia are commenting more than other folks, not a surprise.  That they are forgetting that Putin has taken credit for organizing the separatists is only a mild surprise.  Oy.

Principal-Agenct Theory Exemplified

The metaphor of principal and agent is one that I dodged during and after grad school, but caught up to me when I was working with a friend on the NATO and Afghanistan book.  Why?  Because we realized the question really was about delegation--and that is what P-A all about.

The basics are this: whenever someone (the principal) hires someone else (the agent) to do something, the agent ends up knowing more about the details of the matter than the principal, including how the agent is behaving as it is doing the work (or not doing the work).  So, principals need to figure out how to get the results they want--by hiring people with similar outlooks, by managing discretion, by oversight and by providing incentives.  See the Dave and Steve book for how it is applied to NATO and applied to the civil-military dynamics within the countries operating in Afghanistan.

P-A is relevant today because of the events in Ukraine.  We don't know much about what happened although some are foolish enough to speculate. But what we do know is this: Russia has organized, facilitated, equipped, and staffed the separatist movements in Ukraine.  They may not be entirely of Russia's creation and they are not entirely staffed by Russia, but it is clear that Russia's politicians have seen these separatists as their agents--their employees--to do their bidding. 

Russia wanted to destablize Ukraine, and viola, these folks turn out, armed and equipped.  So, the questions then, from a P-A perspective are:

• What were the orders, the guidance, given to the separatists?  What was their job?  Were they given authority to shoot down planes?  Was that something permitted or at least not forbidden by Russia?
• What were the separatists' rules of engagement?  
• Were the folks back in Russia aware of the separatists' capabilities?  
• What kinds of leverage does Russia have over the separtists?  Can they reward good behavior and punish bad behavior?  
• Does Russia have agents on the ground operating within the separatists' organizations?  

The P-A problem is particularly problematic whenever a country relies on proxies rather than their own military.  If one is relying on one's own military, you can promote/demote/fire poorly behaving agents.  You can more easily control the assets they have, expanding or shrinking their authority and their capability.  But with proxies such as rebel groups?  Even ones which have members of your own military within them?  Not so easy.

Yet the lessons of the 2000s is that counter-terrorism and counter-insurgency is best done by locals.  Which means outsiders are stuck with the P-A problems of relying on proxies.  Hamid Karzai, for example. 

Why am I blathering about this today? Someone asked me about the implications of today's events in Ukraine for Syria. Given that Russia has a fair amount of leverage over the separatists and yet still get an awful outcome, one can only imagine how little control the US would have over the Syrian rebels that the US might arm.  So, yeah, don't expect any MANPADs (anti-aircraft weapons carried by individuals) to be sent to Syrian rebels anytime soon.

Breaking Principal, Agent Bad

With only one episode left of Breaking Bad, it is time to ask one of the most fundamental questions: is Walt a worse principal than he is an agent?  That is, he is bad at both, but where does he really fall short: as the one issuing the orders or the one taking them? 

In principal-agent theory, both sides can do stuff to screw things up.  Sure, it might be in the nature of agents to shirk or be opportunistic if not properly managed, but it is up to the principal to hire the right people, give just the right amount of discretion, engage in sufficient oversight and provide incentives. 

Walt has played both roles, as he was most clearly subordinate to Bogdan, the school district, Gus and even perhaps Tuco.  On the other hand, he also was a principal, serving as the boss of Jesse at various times as well as Badger and Skinny Pete.  And, of course, Todd and his friends/relatives.

So, let's ponder Walt as agent and then as principal.  As an agent, Walt constantly tried to evade oversight especially as he sought to do both more and less than his principal, especially Gus, wanted him to do.  This behavior ranged from  contacting Gus or trying to get another agent, Jesse, to work against Gus.  And, of course, the latter meant getting Jesse to kill Gale and then try to kill Gus.  Ultimately, Walt kills Gus, which makes him a really insubordinate agent, right?  He just couldn't stick to making meth, taking the money, and staying out of trouble.  Walt also violated the rules of the first employer we saw in the series--the high school.  He used its equipment to make meth and then, well, got creepy with his boss, so he got fired.  Anyhow, it is very clear that Walt epitomized the worst case scenario for the agent dangers of opportunism and shirking.

But Mr. White was not that swell at being a principal either.  In making his meth empire, he picked Jesse to be his primary agent, which was a mixed outcome given Jesse's addiction (to drugs) and distractions (his ladies).  Plus Jesse turned out to be the drug dealer with a heart of gold or something, so he didn't always want to do what Walt ordered.  More problematic were subsequent hires: Badger (who tried to sell meth to a cop) and Todd, who exceeded his discretion by shooting a kid.  Yes, over-enthusiasm can be a problem.  Oh, and Walt decided to hire Nazis to work for him, and they apparently do not take no for an answer.  Smooth move.  Sure, Walt hired Saul, who turned out to be an extraordinary agent, providing sage advice (even if Walt tended not to listen to Saul), doing what needed to be done, and ultimately sacrificing his own thriving practice.  Otherwise, Walt was not so good at agent selection. 
Walt also was bad at providing incentives to his agents.  Sure, he paid well, but he also constantly berated Jesse, making him feel inadequate.  Jesse would have been a fair more responsible and responsive agent had Walt treated him better, but that would have required way more patience and empathy than Walt was capable of.   At least Walt did not try to kill his agents unless he really, really had to.

So is Walt as Principal > or < than Walt as Agent?  Well, given that Walt as agent killed his boss and destroyed his agent's meth empire, I would have to go with Walt as agent < Walt as principal.  But he made it close.  Walt as bad human being made him bad in either capacity, of course.


Who was the best agent?  Mike, of course.  He followed orders and stayed within his boss's intent when granted the discretion to make decisions.  Gus didn't have to engage in intrusive oversight over Mike's behavior.  No, he had to use Mike to monitor Walt--this was expensive as Mike could have been used to deal with other problems, so the opportunity cost here was pretty significant. 

Who was the best principal?  Gus, of course.  He tried to be careful in hiring, reluctant about hiring Walt given his inherent unreliability, but hired Mike and others who were very good at staying within their lanes.  He tried to develop alternative agents (Gale, Jesse) so that he would not have to rely on an unreliable agent.  He used Mike as well as technology to oversee Walt--the camera in the lab to name the most obvious one. Gus provided excellent pay as an incentive, but also demonstrated with a box cutter how he would punish bad behavior. 

Is this too much over-thinking?  Of course, but it could be worse--I didn't even apply chapter two of Dave and Steve's new book  to the collective principal in the first part of the last season--the Mike-Jesse-Walt troika. 

Dark Side Nostalgia

Wired went from a fun post about the Battle of Hoth to a great conversation among people I follow on twitter.  Behold, the power of a fully armed and operational community of IR scholar-geeks.  My own attempt at this stuff earlier this week pales in comparison to the sharpness of these posts.

In grad school, we often joked that principal-agency theory was the real dark side.  My friends who specialized in American politics (or even took American as their second subfield) found themselves inevitably drawn into the dark side, using, deploying, applying P-A theory.  By focusing on IR and Comparative, I avoided the dark side during my time there.

But alas, my fall was inevitable.  As soon as I began to co-author with one of the disciples (David Auerswald), I was tainted.  As a result, the new book on NATO and Afghanistan, with the final draft to be sent to Princeton University Press tomorrow for processing, contains delegation, discretion, oversight.  These are of the dark side.  I have become so infected that I pondered at length the P-A dynamics of the Avengers.  As a result of the betrayal of my former self, I cannot help but think of P-A relations when it comes to Darth Vader, the Emperor, Luke and all the rest.  The series of pieces in the uber-geek symposium reek of the dark side.  They ponder who was monitoring whom, they implicitly indicate that there was agency slack, hidden information and hidden action aplenty.

It is true as say, that once you step into the dark, forever it will dominate your destiny.  If only I could figure out that force lightning....

Sit On It and Rotate

In the course of researching NATO and Afghanistan, I was surprised to see so much variation in how long any contingent stayed on the ground, as some countries would rotate their troops out after four months, others six, and only the US troops would have a year in country.  Why is this important?  Because Afghanistan was/is a particularly challenging place to operate, that COIN is all about development relationships, and having very short-term focus is a bad idea.

Commanders would want to be able to show that they made a mark in a very short time frame, which means a temptation to opt for the visible but not the sustainable.

I got to thinking about this issue this morning thanks to the end of General Allen's tour in Afghanistan, and folks on twitter (https://twitter.com/#!/joshuafoust/) pointing out that none of the last four American Generals did an entire tour.  McKiernan was replaced by McChrystal because McK was not seen as being as COIN-focused/skilled.  McC got fired for his Rolling Stone fiasco.  Petraeus got shifted to head CIA (I spent part of this morning arguing with Josh about whether this was a promotion or just a slick political move--I tend to think of it as the former, Josh not so much).  Now, Allen is being promoted to head US forces in Europe--EUCOM and ... head of NATO's miltary as SACEUR.  Perhaps one is most likely to get promoted if one facilitates cutting back rather than ramping up?

This all points to a larger issue--even if each general served their full tour in Afghanistan, the job seemed to have a one year term in practice even if formally it was supposed to be two years (still perhaps too short?).  While it is an exhausting job, generals in previous wars served longer than one year.  The turnover meant a new strategy and a new style every year, which made it hard to have cumulative progress.

Allen, for instance, had a different interpretation of transition than Petraeus.  When Petraeus started the transition process in Afghanistan, the idea was to turn over the most fit parts of Afghanistan to Afghan control.  For Allen, perhaps because the clock has been sped up, advocates turning over the more problematic places to the Afghans earlier so that the Afghans will have back up as they work through it.  If those spots were transitioned later, the Afghans might be facing challenges with  little outside support.

The length of tours is not something that will probably get much attention at the Chicago Summit or in the future, but the constant spin cycle of modern military deployments obviously does not facilitate efficiency, efficacy, effectiveness or any other relevant e-word.  It would be nice if NATO tries to develop more compatible schedules, but NATO has other, bigger fish to fry so don't expect any progress on this.

And, yes, Happy Days inspired the title to this post: