Constitutional Political Economy

, Volume 1, Issue 3, pp 21–47 | Cite as

Constitutional democracy and the theory of agency

  • Larry J. Merville
  • Dale K. Osborne

Abstract

A unanimously adopted democratic constitution is a contract between the people as principal and the government as agent. However, none of the incentive devices employed in private principal-agent contracting assure enforcement of a constitution. Under majority voting, candidates for the job of agent cannot win the job without promising tobreak the contract, and the agent cannot be re-elected unless he keeps that promise.

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Copyright information

© George Mason University 1990

Authors and Affiliations

  • Larry J. Merville
    • 1
  • Dale K. Osborne
    • 1
  1. 1.Department of Finance, School of ManagementThe University of Texas at DallasRichardsonUSA

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