The theory of agency
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In conclusion, we have developed a model of policing in the context of agency relations and managerial discretion. The model had three stages: 1) diversion of resources to policing or other uses; 2) implementation of policing mechanism; and 3) agent's reaction to policing. We then applied the model to the case of regulatory behavior. We argued in part that public interest groups are constrained (and perhaps in some cases may elect) to police the manifestations of agent fidelity in the regulatory agencies rather than adherence to public interest criteria. This has possibly paradoxical consequences in that return to public interest criteria may thereby be reduced.
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