Advertisement

The Review of Austrian Economics

, Volume 22, Issue 2, pp 145–150 | Cite as

Elections as takeover bids: Some agonistics concerning good government

  • Richard E. Wagner
Article

Abstract

Agency theory has been widely applied to the governance of business corporations and to good advantage. The formal framework of agency theory pertains as well to polities, wherein citizens are the principals and politicians the agents. Where takeover efforts occur irregularly for corporations, they occur at regular intervals through elections for polities. Timothy Besley’s Principled Agents uses the agency theory to argue that electoral competition will generally select competent and public-spirited politicians. This claim follows from his formal framework, but that framework ignores some questionable and unsettled matters that challenge Besley’s relatively roseate view of the qualitative character of electoral selection.

Keywords

Agency theory Corporate control Takeover bids Elections Good government Economic calculation 

JEL Codes

D6 D7 H1 

References

  1. Berle, A. A., & Means, G. C. (1933). The modern corporation and private property. New York: Macmillan.Google Scholar
  2. Besley, T. (2006). Principled agents? The political economy of good government. Oxford: Oxford University Press.Google Scholar
  3. Cowen, T. (2005). Self-deception as the root of political failure. Public Choice, 124, 1981.CrossRefGoogle Scholar
  4. De Angelo, H. (1981). Competition and unanimity. American Economic Review, 71, 18–27.Google Scholar
  5. Fama, E. F. (1980). Agency problems and the theory of the firm. Journal of Political Economy, 88, 288–307.CrossRefGoogle Scholar
  6. Kuran, T. (1995). Private truths, public lies: The social consequences of preference falsification. Cambridge: Harvard University Press.Google Scholar
  7. Mankowski, L. (1983). Competition and unanimity revisited. American Economic Review, 73, 329–339.Google Scholar
  8. Meckling, W. H., & Jensen, M. C. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3, 305–360.CrossRefGoogle Scholar
  9. Pareto, V. (1935). The mind and society: A treatise on general sociology. New York: Harcourt Brace.Google Scholar
  10. Popper, K. R. (1962). Conjectures and refutations. New York: Basic Books.Google Scholar
  11. Wagner, R. E. (1986). The agent-principal relationship in the public sector. In K. Brunner (Ed.), The Growth of Government (pp. 37–53). Rochester: Center for Research in Government Policy and Business, University of Rochester.Google Scholar
  12. Wagner, R. E. (1988). Agency, economic calculation, and constitutional construction. In C. K. Rowley, R. D. Tollison, & G. Tullock (Eds.), The Political Economy of Rent Seeking (pp. 423–445). Boston: Kluwer.Google Scholar
  13. Wagner, R. E. (2007). Fiscal sociology and the theory of public finance. Cheltenham, UK: Edward Elgar.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Department of Economics, 3G4George Mason UniversityFairfaxUSA

Personalised recommendations