I tried to avoid principal-agency theory in grad school despite the fact that UCSD at the time was one of the major sources of the application of it to political science. I dodged P-A for nearly twenty years, but then found it most useful for framing the NATO-Afghanistan book, as P-A is all about delegation and we have been asking questions about delegation.
But one drive to Ottawa has shaken my understanding of P-A. How so? Well, one of the key arguments focuses on oversight (P-A is more than just about oversight, as our book will illustrate)--that there are different kinds of oversight systems with the now classic metaphor of police patrols vs fire alarms. How do you oversee your agents or oversee your domain? You can send out police patrols to detect violations as they occur and also to deter them through presence. Or you can set up fire alarms and react when there is a problem. One is active and expensive, the other is passive, reactive and less expensive. You would never expect to see fire trucks driving the streets looking for a fire.
So far, so good. But on the way to Ottawa this very foggy morning, there was an ambulance sitting in the median, apparently waiting. Not waiting for a hole in traffic so that it could u-turn, but just waiting like a cop car for trouble to occur. Ambulances follow fire alarm-type rules--they wait somewhere until they are called and then come to the rescue. Or, they might be pre-stationed at a major event where there might be trouble. But they usually do not just drive around looking for trouble, do they?
Perhaps drivers from Quebec are so likely to cause major crashes that sending ambulances to the major pathways for these troublesome travelers is good prevention.
All I know is that it completely messed with my understanding of a key metaphor.
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